MILDURA’S housing prices will remain steady as market interest decreases following Tuesday’s interest rate rise announcement, says Ray White Mildura managing director and sales agent Damian Portaro.
The Reserve Bank of Australia this week increased the cash rate by 50 basis points to 0.85 per cent as part of a push to curb inflation.
This follows the May increase to 0.35 per cent.
Mr Portaro said he thought the increase would lead to the stabilisation of the market in Mildura, not a decrease in prices, as many buyers hoped, due to local housing demand.
“Prices will just stabilise and go back to more average numbers and average buyers coming through,” he said.
“We still have pressure on our rental vacancies. We are still well under 1 per cent vacancy rate, so there are not enough houses for people to live in.
“So that will keep an upwards pressure on prices, while there is some downwards pressure from interest rates.”
Mr Portaro said the interest in local properties slowed after the RBA’s May rate increase, but over the past week had begun to increase again.
“Last week we actually had increased numbers at our open house and we had some serious interest in properties like we had in the past,” he said.
“One open house had nearly 20 groups through, which were numbers that we were receiving probably six months ago, and because of that we have had a few properties sell immediately above range.
“(May’s increase) didn’t deter people too much they got over it and they came back on the weekend in great numbers only to have them probably scared off again because of the big rise now.”
Mr Portaro said he wasn’t sure what the immediate impact of Tuesday’s rise on local buyer numbers would be.
“It will be interesting to see what happens this week, everyone is talking about it but the impact we won’t know just yet.
“It could take the market a month to find its feet again or a few weeks to adjust but we won’t know that until this weekend is up and the next few weeks.”
CoreLogic research analyst Kaytlin Ezzy said metropolitan areas had noticed growth slow over the past few months.
“The slowdown in growth had been more prominent in the larger, more expensive capitals of Sydney and Melbourne, with Sydney recording negative growth for the past four months, while Melbourne recorded monthly declines in four of the past six months,” she said.
“The May rate announcement put further downwards pressure on these markets, with Melbourne dwelling values falling 0.8 per cent over the month of May.”
Ms Ezzy said across regional Victoria dwelling values were increasing.
“Dwelling values are still rising, up 0.4 per cent over the month, however the pace of growth has slowed after recording a peak rate of growth in March 2020 (2.6 per cent),” she said.
“Similar trends have been seen across Mildura, which saw dwelling values rise 0.4 per cent over the three months to May, down for a recent peak quarterly rate of 5.2 per cent over the three months to December 2021.”
However, Ms Ezzy said as interest rates normalised over the next 12 to 18 months, it was expected that growth across the Mildura dwelling market would ease in line with the broader national trends.
