RBA Announces Further Cash-Rate Increase – What’s Next?
Weekly Real Estate Market Update with Leigh Martinuzzi MPG
It was a Gold Trip on the racetrack Tuesday yet for the RBA it meant a further 0.25% cash rate increase which will be passed on by all major banks. The cash rate now sits at 2.85%, which likely means that interest rate repayments will fall between 5.5 to 6.5% and more for fixed and investment loans. And the cost of goods is still climbing, with further fuel and energy price increases expected. Australia’s consumer price index has increased from 6.1% to 7.3% in the last year, which, is the highest rate of growth in 32 years, and therefore we can expect more rate rises to come. This is causing a continued decline in property prices across Australia, with every city and regional area, except regional SA, reporting value decreases. In October, property prices fell -1.2% nationally. However, things seem to be easing.
Last week with the federal budget being announced, we noticed less market activity, however, this is pretty standard behaviour around budget time. Part of the announcement was the target to build 1 million new homes over five years from 2024. This has been critiqued as poorly ambitious because in the five years up to 2022, just under 1 million homes have been built, and demand is expected to rise, the target may still leave us with a shortfall in housing. I actually think the government needs to start planning for more affordable housing options as many would-be first-home buyers will be priced out of the housing market as prices keep escalating.
Last week in our southern states, auction clearance rates had improved, and prices seem to be levelling out, at least in the southern states. I expect we will still see more price corrections here on the Sunshine Coast in the months ahead before we start to see prices plateau.
Locally, there have been many more properties being listed for sale. This will no doubt make it more competitive for sellers who will need to consider offers they receive carefully, as buyers now have more to choose from. The good news is that we still have buyers and buyers who are happy to make offers on homes they like. The challenge now is to find a happy balance between buyers’ and sellers’ expectations. For sellers that means any serious offers that are somewhat close to the mark, shouldn’t be too heavily negotiated as you may just lose your best buyer. And the risk right now is that the market still may drop further. On the contrary, for buyers, and I’ve seen it before, the market can take a turn in the positive direction just as quickly as it started to decline. And, I for one, am not convinced by some of the headlines that continue to warn us of a massive property crash of 10-20%. If anything, now is a great time to buy. Without the heat of increased buyer competition, fair prices can be achieved for both buyers and sellers.
“Sometimes the silence can be like thunder.”
AUCTION CLEARANCE RATES – WEEK ENDING 21ST OF AUGUST 2022
- Queensland – 33% (301/1161)
- NSW – 54% (1016/1477)
- Victoria – 58% (642/1124)
- ACT – 58% (146/101)
- South Australia – 59% (144/310)
- Tasmania – 25% (4/155)
- Western Australia – 32% (22/661)
- Northern Territory – 80% (5/28)
*(Auctions/Private Sales)
REVIEW(s) OF THE WEEK
Happy Seller
Leigh came in and told us the value of the property and was sold the following week for the asking price!!! Very happy with the outcome… Would recommend Leigh any day of the week. – Seller
Leigh is friendly & made the process very easy.
I found Leigh’s information booklet helpful during the selling process. He goes over & beyond with service, communication & support. – Seller
