How Long Are Properties Taking to Sell? A Snapshot of Australia’s Property Market
Reading Time: 5 minutesThe time it takes to sell a property is a key indicator of the health of the real estate market. According to the latest data from CoreLogic, properties listed for sale across Australia during the July quarter took a median of 33 days to sell. This figure varies significantly depending on the location, with properties in the combined capitals selling faster (28 days) compared to those in the combined regions (44 days). Days on Market: A Measure of Market Strength Days on market (DOM) is an essential metric in real estate, reflecting the level of buyer competition and the pace of price growth. Generally, the fewer days a property spends on the market, the more competitive the market is, and the stronger the upward pressure on prices. Fastest-Selling Markets The Perth property market is currently experiencing a boom, which is evident in the astonishingly low median DOM of just 10 days. This rapid turnaround time indicates a hot market with strong buyer demand and quick sales. Brisbane and Adelaide are also enjoying robust property markets, with median DOM of 20 days and 28 days, respectively. These cities have been seeing consistent price growth, further fueled by the competitive buying environment. Slower Markets in Major Cities In contrast, the property markets in Sydney, Melbourne, and Canberra are showing signs of cooling, with properties taking longer to sell. Sydney’s median DOM is 34 days, Melbourne’s is 39 days, and Canberra’s is 49 days. The extended time on market in these cities suggests a more balanced market with less urgency among buyers. Markets Facing Challenges The slowest markets in Australia right now are Darwin and Hobart, where properties are taking the longest to sell. In Darwin, the median DOM is 50.5 days, while in Hobart, it’s 54.5 days. Both cities are currently experiencing price declines, which is likely contributing to the extended selling periods. Conclusion: The number of days a property spends on the market is a telling indicator of the real estate landscape. In cities like Perth, Brisbane, and Adelaide, properties are selling quickly, driven by strong buyer demand and rising prices. Conversely, markets in Sydney, Melbourne, and Canberra are seeing slower sales, reflecting more balanced conditions. Darwin and Hobart, where prices are falling, are facing the longest selling periods. Understanding the dynamics of days on market can provide valuable insights for both buyers and sellers as they navigate the current property market.
Wages Growth Slows for Third Consecutive Quarter: Implications for RBA Decisions
Reading Time: 4 minutesAustralia’s wage growth has continued to decelerate, with the latest data from the Australian Bureau of Statistics revealing a 0.8% increase in the June quarter. This marks the third consecutive quarter of declining wage growth, following increases of 1.3% in the September 2023 quarter, 1.0% in the December quarter, and 0.9% in the March quarter. The Connection Between Wages and Inflation Wages growth is a crucial economic indicator closely monitored by the Reserve Bank of Australia (RBA) as it plays a significant role in inflation dynamics. Lower wages growth generally correlates with lower inflation, which is a critical factor in the RBA’s decisions regarding the cash rate. The RBA’s primary goal is to return inflation to its target range of 2-3%, and wage trends are a key determinant in this effort. In its recent Statement on Monetary Policy, the RBA acknowledged that while wages growth has likely passed its peak, it remains elevated compared to the trend growth rate of productivity. “In Australia, there is still more demand for goods and services than the economy can sustainably supply, causing inflation to be persistent. Conditions in the labour market are easing but still tight, and wages growth remains high even though productivity growth is weak,” the RBA noted. What This Means for Interest Rates As the RBA reviews economic data to determine its next move on the cash rate, the slowing pace of wage growth will likely be a significant consideration. If wages growth continues to decelerate, it could ease inflationary pressures, potentially leading the RBA to lower the cash rate in the future. However, the RBA has also emphasised that wages growth, even at current levels, may still be unsustainable without corresponding productivity gains. This suggests that the RBA might remain cautious in its approach, potentially opting to keep interest rates higher for longer to ensure inflation is firmly under control. Conclusion: The slowdown in wages growth is a double-edged sword for the Australian economy. On one hand, it could help in curbing inflation, bringing it closer to the RBA’s target range. On the other hand, the persistence of high wages growth relative to productivity levels indicates that inflationary pressures may linger, complicating the RBA’s path to lower interest rates. As the RBA continues to navigate these challenges, the interplay between wages, inflation, and interest rates will remain a focal point in the months ahead.