The Australian share market retreated in August, with the All-Ordinaries index falling 1.4% for the month, and closing at 7,517.8 points. The Australian Dollar fell by 3.5% in the month against the United States dollar, with 1 Australian Dollar currently buying 64.8 United States cents.
Global share markets were weaker across the board in August, with the United States Dow Jones Index falling 2.4%, the London FTSE falling 3.4%, the Hong Kong Hang Seng Index falling 8.5% and the Japan Nikkei 225 falling by 1.7% for the month.
The Reserve Bank of Australia (RBA) Board kept the official Cash Rate on hold at 4.10% per annum in August. The RBA Board meets again next week, with expectations that rates will remain on hold following the Australian Bureau of Statistics (ABS) release late in the month noting that the monthly Consumer Price Index recorded a rise of just 4.90% in the 12 months to July 2023, down from 5.40% in June.
Interestingly, for the 3 months to August, the property market turned around from falling values to an increase in value of 2.5% nationwide (with Sydney leading the way with a 1.2% increase in the CoreLogic Home Value Index for the year to 31 August).
The table below shows the current state of play with property values over the past year.
As we enter spring, and potentially more housing stock becomes available, it will be interesting to see if the recent trend of a recovery in home values continues. A change in the RBA Governor this month, along with falling inflation and increased migration, may ensure that the momentum continues.
They key to any recovery will be ensuring that mortgage stress doesn’t increase to a point whereby there are significant financially stressed sellers in the market.
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This article is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation, and investment objectives.