Surge in new home demand drives Brisbane market revival ahead of possible rate hikes
Home builder Tamawood has reported a big surge in demand from the public that hasn’t been seen since before the Covid pandemic.
Australia's economy has grown, slowly, for the seventh consecutive quarter. (AAP Image/Darren England)
As mortgage holders wait for tomorrow’s interest rates decision from the Reserve Bank, Tamawood said it had experienced an increase in deposits and appointments during May.
Appointment numbers had jumped 200 per cent compared with the corresponding period in 2022 and fees received from customers over the past three months jumped 34 per cent.
Shares in Tamawood jumped 7 per cent on the news.
Tamawood did not reveal why the interest had peaked but it followed findings by CoreLogic that Brisbane’s real estate sector had been revived in May with house prices jumping 1.4 per cent. CoreLogic said the fear of missing out seemed to have returned to the market.
Increased immigration has also been a factor.
The industry has also said that people who were facing rental shortages were moving more quickly into buying homes.
The broader building sector has been struggling in the past year because of spiralling prices and supply chain issues. About 15 major construction companies on the east coast have collapsed and there have been warnings about the looming drop off in housing supply.
Tamawood said its board was optimistic that its second half profit result would be an improvement on the first half.
QIC was maintaining its belief that the RBA won’t increase rates tomorrow. The Commonwealth Bank, ANZ and Westpac also believe the RBA will pause but the bond markets have shown a higher chance of a rate increase.
But QIC said the RBA had been driven by data and since its last increase that data had shown a softening economy.
“On that basis, we expect the RBA will pause on Tuesday,” QIC said in an economic update report.
“But down the track, mostly likely in August following the June quarter CPI release the revised RBA economic forecasts, we will likely see another rate hike taking the cash rate to 4.1 per cent, which is where we think would see the RBA done and dusted.”
However, other economists now think interest rates will go higher over the year with Deutsche Bank lifting its terminal rate, which is the high point in this cycle, to 4.6 per cent.
Deutsche is tipping three more increases this year, including one tomorrow.
