Wilson Weekly 28: A Deep Dive into Economic and Housing Market Trends

Introduction
As we wrap up the third month of the year, it’s essential to take a step back and assess the economic landscape,
focusing on the key trends impacting the housing market. This article, inspired by the insights from the Wilson Weekly
28 podcast, will provide a comprehensive analysis of the current economic status, housing market dynamics, and
projected future trends. The aim is to equip both homeowners and potential investors with critical knowledge to make
informed decisions.

Economic Overview: March in Review
Time Flies
Economically speaking, every month has its unique highlights. The year is already moving swiftly, with March now
behind us, and April springing forward. This swift passage of time is a constant reminder of the ever-evolving economic
landscape, with each month adding a new chapter to the economic story of 2022.

Highlights of the Month
March’s most significant highlight was the continued rise in house prices in most market areas, particularly in
Melbourne and Sydney. These markets have demonstrated consistency in their performance, with Sydney reporting its
second consecutive month of growth in house prices.

The Housing Market: An Upward Trajectory
The Big Two: Melbourne and Sydney
Melbourne and Sydney, often referred to as “the big two” due to their population size, continue their growth trajectory.
The recent recovery of Melbourne’s housing market, after a severe and lengthy lockdown, has been quite impressive.
The city is experiencing one of the strongest rebounds globally.

Timing the Market
With prices growing and still below their levels a year ago, potential buyers are starting to feel the pressure not to miss
out. However, those attempting to time the market might have missed the bottom, especially in Sydney.

Interest Rates and the Economy
The Role of the Reserve Bank
The Reserve Bank faces the considerable challenge of managing interest rates in a way that consolidates the revival of
housing markets. The key to this lies in the interest rate decisions made each month.

Interest Rate Decisions
The Reserve Bank’s decision for April will be particularly noteworthy. Predictions suggest another rise in interest rates,
which, despite some speculation to the contrary, has not stalled the housing markets.

Inflation and its Impact
Inflation Trends
While inflation has fallen, it’s essential to consider whether this decline would have happened regardless of higher
interest rates. Inflation impacts are now starting to appear in higher services costs, as employers attempt to cover
increased wages with higher prices.

The Impact on the Housing Market
Higher inflation and interest rates haven’t dampened the housing market. Instead, they have fuelled a strong economy
that continues to support growth in house prices.

Rental Market Trends
The Impact of Rising Rents
Rents have been increasing significantly, with March witnessing a considerable surge. This surge in rents, particularly
for units, is a cause for concern for tenants, while being a welcome trend for landlords and investors.

Policy Responses to Rising Rents
Rising rents have triggered discussions about potential policy responses, including rent control measures. However,
these proposals often overlook the complexities of the rental market and the potential for unintended consequences.

Auction Market Trends
Auction Results
Auction market results provide useful insights into housing market trends. Despite rising listings, Melbourne and
Sydney’s clearance rates are at their highest levels in a year, indicating an encouraging outlook for sellers.

The Impact of High Auction Numbers
High auction numbers can put pressure on clearance rates. However, the robust results in recent auctions suggest that
the market can absorb these higher volumes without significantly impacting clearance rates.

Conclusion
As we move into April, it’s crucial to keep an eye on key economic and housing market trends. From the consistent
growth in house prices to the impact of interest rates and inflation on the economy, these factors shape the landscape
for homeowners and potential investors. Understanding these trends and making informed decisions can help navigate
the complexities of the market, making the most of the opportunities it presents.

Note: This article is based on the insights from the Wilson Weekly 28 podcast and provides an analysis of the key
economic and housing market trends discussed. The views expressed are those of the author and do not necessarily
reflect those of the podcast hosts.