Property Market – Page 26 – Digital Finance Analytics (DFA) Blog

Has The RBA Greenlit Home Price Falls?

The logic I hear all the time is the RBA won’t let home prices fall too far because of the financial stability risk consequences. But that view might be plain wrong.

First the RBA has lifted rates by 2.25 percentage points since May, and markets expect the cash rate to reach 3.3 per cent by the end of the year, before peaking at 3.9 per cent in April next year. RBA governor Philip Lowe said last week there was a “narrow path to a soft landing” for the Australian economy, which would be difficult to stay on if global economic conditions deteriorated.

And reflect on this. Within a 24-hour period this week, there will be 16 central bank decisions including the US, UK, Japan, Switzerland, Norway and Taiwan. Cumulatively, we could see over 500 bps in rate hikes across the globe this week.

In addition, Westpac came out yesterday with a revised forecast for the RBA Cash Rate, saying “We now expect the Reserve Bank Board to raise the cash rate by 50 basis points in October for a terminal rate of 3.6% by February (revised up from 3.35%)”.

It seems the RBA is giving the green light to home price falls. Because if prices fall you would need a smaller mortgage (even if the interest rates were higher). Let that sink in. Those who are arguing the RBA won’t be prepared to let home prices fall very far, take note!

Go to the Walk The World Universe at https://walktheworld.com.au/ Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

The RBA’s Interest Rate Debacle…

Whilst the rate of interest rates rises is likely to ease ahead, eventually, as the RBA’s Jonathan Kearns, Head of Domestic Markets said today in a speech titled Interest Rates and the Property Market that there are important connections between property prices and interest.

https://www.rba.gov.au/speeches/2022/sp-so-2022-09-19.html

He said interest rates both affect, and are influenced by the economic effects from, both residential and commercial property prices. We can be confident about some aspects of the impact of interest rates on property prices, but there is considerable uncertainty about other aspects.

Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing alongside you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

A Queensland Operation Antispruik..

More examples of property price falls across southeast Queensland, thanks to research by Cookie, following our recent live show on property trends in Brisbane. This is not a scientific selected sample; they merely represent some of the falls being show on the property portals. The Gold Coast seems particulally prone.

Go to the Walk The World Universe at https://walktheworld.com.au/

New Zealand Home Prices Continue To Slide

The REINZ has released their report for August 2022 today, and it’s a story of continued weakness across the housing market in New Zealand, which is unsurprising given the significant cash rate hikes imposed by the Reserve Bank there.

So today we will look at the data, and also highlight how the story is still being spun by the industry to try and turn a profoundly negative story positive. Well good luck with that, as the OCR is lifted higher still.

They report that across New Zealand, median prices for residential property (excluding sections) decreased 5.9% annually, from $850,000 in August 2021 to $800,000 in August 2022. Month-on-month, this represents a 1.2% decrease from $810,000 in July. The seasonally adjusted figures show a 2.1% decrease in the median price as we moved from July to August, suggesting weaker performance than expected.

The median residential property price for New Zealand excluding Auckland remained unchanged compared to last year at $700,000. There was a month-on-month decrease of 2.8% from $720,000. A better way to report that, is all gains from the past year have now been extinguished on average.

Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

It’s Edwins Monday Evening Property Rant!

The latest from our property insider, Edwin Almeida, as we look at the latest coverage of property, numbers, and trends.

https://www.ribbonproperty.com.au/

Go to the Walk The World Universe at https://walktheworld.com.au/

A Taxing Time For Queensland Investors…

Queensland has been a state where property investors have traditionally made better returns on a net and gross basis, from investment property in the state, compared with those in New South Wales and Victoria.

To recap, gross investment returns is the ratio of current property market value compared with the current rental paid, assuming the property is fully let. The Net Investment return is a more real-world measure, which takes account of actual vacancy rates, cost of mortgage, maintenance, and management of the property. In our surveys, many property investors have no feel for their true net returns, clinging to the prospect of eternal capital gains.

Those in Victoria are worst placed, which explains the very strong interstate investment in Queensland, one reason why prices and rents had shot up in the past couple of years. But there is something afoot in Queensland, which could change this picture, possibly significantly.

Indeed, those following the AFR will have noted its fever pitch campaign against an Australian-first move whereby landholders will have to voluntarily disclose their interstate holdings in other states before being taxed for their Queensland holdings. These land tax changes were first announced in the 2021-22 budget update on 16 December 2021. Queensland Treasury has said the tax change will raise only $20 million a year from 2023-24 and impact about 10,000 landholders, most of whom who live interstate.

Investors are irate with the changes, saying they will drive investors out of Queensland as well as push up rents and that they felt like they were being taxed twice in two different states.

A spokesman for Mr Dick acknowledged this week the tax change would affect some Queensland investors.

So now Queensland owners are now working out how they will be stung by the tax.

Go to the Walk The World Universe at https://walktheworld.com.au/