Sydney's median house price tops $1.6 million

The cost of living just keeps going up, house prices have broken more records, and most of us are getting too complacent about saving. Here are five things you may have missed this week. 

Home prices hit new record high

Home prices have hit another record, with the combined capital house and unit prices experiencing another quarter of growth - a fifth consecutive rise for houses and a fourth for units.

Domain's latest House Price Report March Quarter 2024 reveals that while the pace of price growth has slowed compared with the previous quarter, home price records continue to be broken and further increases are expected. Median house prices in Sydney, Brisbane, Adelaide and Perth are at another record high, while Brisbane, Adelaide and Perth have record-high unit prices.

For the first time, Sydney's median house prices exceeded $1.6 million and Adelaide's rose to more than $900,000. Perth's unit prices ($425,638) soared to a record high, surpassing the previous peak set a decade ago.

Although price growth led to these new records, house price growth was slower during the March quarter compared with the previous quarter in Sydney, Melbourne, Brisbane, Adelaide, Perth, and Darwin. For units, Melbourne and Adelaide experienced slower quarterly growth.

"The slowdown in growth observed during the March quarter is due to an increased supply of homes for sale across the combined capitals, with more properties now available in Sydney, Melbourne, Hobart and Canberra," says Domain's chief of research and economics, Dr Nicola Powell.

"However, a reduction in the cash rate could shift this trend, potentially increasing housing turnover."

Perth and Brisbane have experienced a long-term decrease in the number of properties for sale, which has contributed to significant price growth in these cities, Powell added.

CPI jumps 1%

The Consumer Price Index (CPI) rose 1.0% in the March 2024 quarter, higher than the 0.6% rise in the December 2023 quarter, according to the latest data from the Australian Bureau of Statistics (ABS).

Annually, the CPI rose 3.6% to the March 2024 quarter - still a way off the Reserve Bank of Australia's (RBA) target of 2-3% by the end of 2025.

"While prices continued to rise for most goods and services, annual CPI inflation was down from 4.1% last quarter and has fallen from the peak of 7.8% in December 2022," says Michelle Marquardt, ABS head of prices statistics.

The biggest contributors to the March quarter rise were education (+5.9%, the strongest quarterly rise since 2012), health (+2.8%), housing (+0.7%), and food and non-alcoholic beverages (+0.9%). In light of this, it's widely anticipated that the RBA will keep the cash rate on hold when it meets again on May 6-7.

UniSuper invested in Macquarie green fund

UniSuper has committed up to US$400 million to the Macquarie Green Energy and Climate Opportunities Fund (MGECO), investing in the global energy transition and climate opportunities.

MGECO is an open-ended fund that that aims to provide diversified exposure to the global renewable sector with a growing pipeline of opportunities across geographies, technologies, power markets, renewable resources and asset lifecycle stages.

UniSuper hopes to achieve net zero in its investment portfolio by 2050 and to contribute to Australia's goal to achieve a 43% reduction in emissions by 2030.

With this in mind, MGECO targets a portfolio likely to be resilient across the economic cycle. The portfolio is expected to include six seed investments across Australia, Asia, US and Europe. These businesses will provide initial access to approximately 100 underlying projects across onshore and offshore wind, solar, storage and carbon-related projects.

The investments include Aula Energy, an onshore renewable energy business that plans to develop, build and operate utility-scale wind, solar and integrated battery projects across the Australian and New Zealand markets.

Aussies are paying the lazy tax on savings accounts

Complacency can be costly when it comes to savings accounts, with the majority of Aussies sticking with their current bank despite being able to grow their savings more elsewhere.

A whopping 69% of Aussies have never switched savings accounts, according to Mozo's latest report SOS: Save Our Savings.

Those who do switch are typically doing so to have all their accounts in one place, rather than chasing a higher interest rate. But switching could earn them an interest rate that's 1-2% higher, especially if they look beyond the big four banks.

"Bendigo, Macquarie, Bank of Queensland and AMP are a few of the challenger banks that can help savers get a better return on their hard-earned cash," says Mozo's Rachel Wastell.

The report also found that 75% of Australians don't have enough savings to cover the recommended three months of expenses ($15K), and that the most popular savings goals are holidays and emergency funds.

Relief for renters 

Annual rental price growth in March dropped below 10% for the first time in two years despite the continued shortage of rental stock, according to the PropTrack Rental Report March 2024.

The report found that advertised rents increased by 9.1%, or $50 per week, over the year to March 2024, while strong demand saw new and total rental listings on realestate.com.au down 13.7% and 11.3% year-on-year, respectively, to be at their lowest levels for March since 2010.

Properties were leased quickly in the March 2024 quarter, with the median rental listing duration on realestate.com.au holding steady at 18 days, unchanged from 2023 but below the March five year average of 23 days.

The national rental vacancy rate dropped to 1.1% in March 2024, down from the previous quarter (1.2%) and March 2023 (1.3%).

Rapid rental price growth has pushed more people towards home ownership, with the value of lending to owner-occupier first home buyers increasing by 20.7% over the year to February 2024, its largest annual rise since July 2021.

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