The unrelenting ladder!

While the RBA kept rates on hold this week for the 10th consecutive month, there were inevitably those that were disappointed.

Higher interest rates have affected those in, and those wanting to enter, the property market. Borrowing capacity is restrained amid increasing economic pressures and inflationary conditions, limiting affordability and thus house prices.

Well, that’s what you would have thought!

The reality is that while the rate of price growth for dwellings has slowed, there is still growth. In fact, the number of Australian suburbs with a median house or unit value in the million-dollar club reached a new record high in August. In Sydney, as expected, there was the highest net rise in million-dollar markets over the year with +46.

There are currently 448 house and 107 unit markets in Sydney that have a current median value of $1 million dollars or higher, making up 78.3% of house markets and 34.1% of unit suburbs analysed. Sydney's million-dollar club saw a net change of 46 markets over the year, with 23 markets re-entering the seven-figure club (after falling out during the recent rate tightening cycle) and 25 suburbs joining the club for the first time. Only two suburbs in the North Sydney and Hornsby regions (North Willoughby and Warrawee) saw their median unit value fall below the $1 million mark over the year.

Economists from major banks like ANZ and CBA predict that rates may have peaked, with potential rate cuts expected by late 2024 or early 2025. The anticipated reduction could provide relief to borrowers and support economic growth which could see a resurgence in property prices.​

While some may have been disappointed by the latest cash rate decision by our central bank, the takeaway for others will be optimism that the next move will be a downward one. The only question is “when?”.