Mat Tiller's Market Update

 RBA holds rates at 4.35% in a unanimous decision

 The market is slowing, not stalling. Buyers are more cautious, investors are taking a wait-and-see approach and momentum has softened, but vendors who meet the market are still getting their property sold.

The Reserve Bank of Australia has left rates unchanged, but borrowing costs remain high and cost-of-living pressures continue to weigh on household budgets.

We're seeing that translate into slower market conditions and more cautious buyer behaviour.

According to Cotality Australia, national dwelling values were flat in May, with Sydney and Melbourne leading softer conditions while Perth and Brisbane continue to record growth, albeit at a slower pace.

Across the LJ Hooker network, buyers are taking longer to make decisions, reassessing what they can afford and becoming more selective about the properties they pursue. The urgency that characterised much of the post-pandemic upswing has eased.
That said, sales are still happening.

Well-presented properties that are priced in line with current market conditions continue to attract interest and achieve good results. The biggest challenge for some vendors is adjusting expectations to a more balanced market environment.

Investor activity has also pulled back as higher borrowing costs and proposed tax changes weigh on confidence. However, tight rental markets, low vacancy rates and rising rents continue to support the longer-term investment case for residential property.

The bigger picture remains largely unchanged. Population growth continues to add demand, rental markets remain tight and housing supply remains constrained.

📊 Looking ahead: The proposed tax changes are unlikely to deliver additional housing supply in the short term and may keep some investors on the sidelines while the market adjusts. With rental demand remaining strong and supply still constrained, affordability pressures are unlikely to ease anytime soon.

Mathew Tiller is the Head of Research, Economics & Business Intelligence for the LJ Hooker Group