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26 Sep 2023 - Australian Secure Capital Fund - Market Update

By: Australian Secure Capital Fund

Australian Secure Capital Fund - Market Update

Australian Secure Capital Fund

September 2023

The RBA has elected to maintain the current cash rate for the third month in a row, with economists predicting we are at the top of the interest rate cycle. This is a positive sign for Australian property prices, as consumer confidence begins to increase.

The CoreLogic Home Value Index for the month of August is extremely positive, with all capital cities excluding Tasmania recording growth. Brisbane has led the way, with a 1.5% increase for the month, followed by Sydney and Adelaide, both recording a 1.1% increase. Perth, Darwin, Melbourne and Canberra also recording monthly growth of 0.9%, 0.8%, 0.5% and 0.3% respectively. Tasmania was the only capital city which did not experience growth for the month, falling just 0.1%.

Whilst the capital city data was favourable, the regions experienced mixed results, with only regional South Australia, Queensland and Western Australia experiencing growth with 0.9%, 0.8% and 0.1% respectively. Regional Victoria fell the furthest, with a 0.6% reduction, along with New South Wales recording a 0.2% fall. The other regions remained stable.

In a positive sign, property prices have continued to increase despite supply also increasing. The number of auctions taking place continues to increase, with 2,291 auctions taking place on the first weekend of September, up from 1,823 on the same weekend in 2022.

Further bolstering the apparent strength of the Australian property market is that clearance rates also remain high, with a 71.2% clearance rate for the combined capital cities, up from 59.4% from last year. Melbourne and Sydney held the most auctions with 991 and 933 respectively, with Brisbane (159), Adelaide (103) and Canberra (95) well behind. Further behind was Perth and Tasmania recording just 8 and 2 auctions for the weekend.

Adelaide recorded the highest clearance rate of 82.8%, followed by Sydney (73.8%), Melbourne (69.3%) and Brisbane (66.7%) all performing above last years results. Canberra was the only market in which the clearance rate dropped, with 63.6% for the weekend, down from 67.7% last year.

Economists now predict we are at the end of the rate hike cycle and that demand should also increase as consumer sentiment rises on the back of interest rate stability, and the expectation that rates may begin to fall in mid to late 2024.

Clearance Rates & AuctionsWeek of the 3rd of September 2023

Property Values as at 31st of August 2023


Median Dwelling Values
as at 31st of August 2023

Quick Insights

Bouncing Back

The national housing market valuation has now bounced back to $10 trillion with the increase in stock, some unexpected price recoveries and the RBA's decision to hold rates.

"It's pretty astounding to see the total housing value hit $10 trillion in just 14 months, which reflects the resilience of the market despite a cost-of living crisis, low consumer sentiment levels and four increases in the cash rate so far this year amid the fastest rate hiking cycle on record" said Eliza Owen, CoreLogic head of research.

Source: Australian Financial Review

Yes! In My Backyard!

An astonishing and impossible new alliance has formed in NSW comprising NSW universities, two Labor-backed unions, and the state's peak business lobbying association.

The group is called Housing Now!, and it aims to pressure the government to pursue more housing developments in often forgotten and undervalued areas such as along train lines.

They also aim to loosen some of the council-level restrictions around zoning and wait times for development applications.

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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