McGrath says rising interest rates will normalize housing market
There is “positive growth in all markets”, with Brisbane taking the lead.
“Agents are staying there, more stock is coming back, and stock is continuing to be absorbed relatively quickly,” Law said.
“Brisbane is exceptional at the moment because he started later, as he tends to do.
“Sydney and Melbourne are back to mid to high single digits [growth] figures as opposed to the 20% or more recorded in the previous 12 months.
He said that was a good thing.
“We didn’t want and couldn’t afford a double-digit increase in those markets because it’s dependent on affordability,” Law said.
“We went up in the elevator, but you want to go down the escalator, and that’s what we do.
“I think the market is gradually heading towards sustainable growth. And provided sustainable growth is higher than inflation, which in itself is a concern, I think you have a healthy market.
There is no reason to think prices will pull back, he said.
“I don’t see a decrease in the average selling price, I don’t see what could be causing it,” Law said.
“We have very, very low unemployment and there will be interest rate hikes, but not to the point of stopping activity in the market, I think that will normalize it.”
McGrath’s net income was $6.9 million for the period, $1.2 million lower than the prior corresponding period, which was inflated by abnormal normal items including the sale of its Parramatta office and JobKeeper payments to staff.
It pays a one-time special dividend to shareholders of 1.5¢ per share in addition to an interim dividend of 1¢ per share.
Mr. Law also announced a $2.5 million share buyback program beginning March 28 that will last for one year.