February Saw a Slowing Down in Price Declines of Homes in Australia, Suggesting the Potential End to the Recent Downturn- CoreLogic

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Home prices in Australia experienced a slight increase in February, primarily powered by the end of Sydney’s year-long losing streak. 

Financial analysts cautioned that it is too soon to believe this marks an overall reversal since interest rates are predicted to keep growing.

CoreLogic recently reported that housing prices declined a minimal 0.1 per cent in February, gradually recovering from the 1.0 per cent dip in January. It was the gentlest drop since May 2020, when RBA started raising interest rates, showing our real estate agents’ resilience.

Even though prices had recovered somewhat, they were still 7.9 per cent lower than in the same period the year before.

Sydney’s property prices witnessed a 0.3 per cent upsurge in February because the top-end market grew by 0.7 per cent. With Hobart being an exception, capitals across Australia saw values drop half a per cent below over the month.

CoreLogic’s research director Tim Lawless stated that the housing values have stabilised throughout the month due to reduced inventory levels and rising auction clearance rates.

Considering the RBA’s move to a more hawkish stance at the February board meeting, along with an expectation for a weaker economic performance and a loosening in labour markets, there is a good chance this reprieve in the housing downturn could be short-lived,” said Lawless

In Melbourne, COVID price gains have been entirely negated, while Sydney prices remain 7.7 per cent higher than in March 2020 – a testament to resilient market performance despite all odds.

The PropTrack data demonstrated that in February, home prices saw a 0.2 per cent increase from the prior month – except for Hobart, which recorded a drop. Each major city across Australia reported rising housing costs during this period.

The Reserve Bank of Australia has raised rates by a significant 325 basis points to reach a tremendous 10-year peak of 3.35 per cent to restrain runaway inflation.

The Reserve Bank of Australia (RBA) recently took a hawkish stance that shocked many in the market, suggesting two additional rate increases with the potential for rates to reach 4.35 per cent. Investors are now placing bets on further hikes from this peak level.

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