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21 Aug 2023 - Australian Secure Capital Fund - Market Update July

By: Australian Secure Capital Fund

Australian Secure Capital Fund - Market Update July

Australian Secure Capital Fund

August 2023

In a positive sign for Australian property prices, the RBA has elected to keep the cash rate on hold for the second consecutive month, suggesting that interest rates may have peaked, or at a minimum, are close to peaking.

The CoreLogic Home Value Index shows that property values experienced growth across all capital cities except for Canberra (-0.1%) for the month of July, with Brisbane and Adelaide performing strongest with 1.4% monthly growth. Perth (1%), Sydney (0.9%) Melbourne (0.3%) and Darwin (0.3%) also received strong monthly growth.

These strong monthly results have lead to all capital cities now recording positive growth for the quarter. The regions have not performed as strongly, with only regional South Australia (1.1%) and Queensland (0.7%, primarily driven by strong growth on the Gold Coast) recording growth for the month, with Victoria (-0.4%), Western Australia (-0.3%) and Tasmania (-0.1%) experiencing a reduction in value.

In a sign of slowly increasing supply, Auction numbers for the last weekend of July were above those of the same weekend last year, with 1,961 auctions taking place, up from 1,913 in 2022. This was predominantly due to strong auction numbers in Melbourne (846, up from 809) and Sydney (760, up from 624), however Brisbane (174), Adelaide (113), Canberra (53) and Perth (14) were not far off last year's results.

Despite the number of auctions increasing, clearance rates remain strong, suggesting buyers and sellers are "on the same page" in regards to property price expectations. Adelaide (82.8%) leads the way, followed by Sydney (72.4%), Canberra (70.6%), Melbourne (69.9%) Brisbane (58.3%), contributing to a weighted average clearance rate of 70.2% for the weekend, well above the 54% result of the previous year.

Clearance Rates & Auctions 17th June - 23rd of July 2023

Property Values as at 1st of August 2023

Median Dwelling Values as at 1st of August 2023

Quick Insights

Way High Westpac

According to Westpac's latest forecast, Sydney house prices are expected to rise as much as 10% this year, propelled by surging migration, a tight rental market and scant housing supply.

Sydney prices are anticipated to gain another 6% in 2024, and 4% in 2025. Perth is expected to achieve the second strongest growth, with an 8% gain this year, followed by Brisbane with 6% and Melbourne prices at 4%, said Westpac senior economist Matthew Hassan.

Source: Australian Financial Review

The Harborside Home

David Waterhouse, the estranged member of the famous racing clan, has sold his iconic harborside home Villa Biscaya for about $28 million.

Designed by prominent architect Alan Edgecliff Stafford in 1929, the three-bedroom home features a grand stone staircase flanked by wrought-iron balustrades.

The sale comes just three years after the former art dealer and options trader paid $10.25 million, almost tripling the purchase price.

Source: Australian Financial Review

Author: Filippo Sciacca, Director - Investor Relations, Asset Management and Compliance

Funds operated by this manager:

ASCF High Yield Fund, ASCF Premium Capital FundASCF Select Income Fund

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