Question marks hang over the second half of 2022 as inflation pressures and the impact of international events start to bite here in Australia. Treasurer Jim Chalmers warned that inflation will be ‘significantly higher’ than expected this year, while Reserve Bank governor Philip Lowe predicted that inflation would hit a 32-year high of 7 per cent ‘sooner rather than later’. It was no surprise that nervous vendors withdrew from auctions in record numbers before the last weekend of June, as interest from prospective buyers waned.
June saw a weakening of the housing market, particularly in Sydney and Melbourne, which are more sensitive to interest rate fluctuations. But even in Adelaide, one of the more buoyant markets of late, the pace of growth is slowing. Homeowners wanting to sell now fear they’ve ‘missed the boat’, while prospective buyers play the waiting game as housing affordability and rising interest rates become the primary concern.
Confidence in the construction sector also continues to decline due to the wave of construction firm collapses. New figures show that the cost of building and renovating has increased significantly over the last two months due to supply chain and labour shortages.
On top of that, commercial property owners have also been hit with faltering rent collections in May as rising costs and interest rate increases impact tenants’ ability to pay.
Download and read the full Market Essentials – July 2022 Report.