This is an edited version of a live discussion about the current state of the markets with Head of Investments for Walk The World Funds and Nucleus Wealth, Damien Klassen.
From the We-chat chatters to the latest numbers and market commentary, we pick apart the property market. And Edwin lets us into more secrets of the Auctioneer.
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Another outing, thanks to Cookie, looking at recent property price reductions, and cross correlating these with data from my core market models. It is clear that property prices are on the turn in the last hold-out state now, and we know that mortgage stress is higher in the Northern half of the Apple Isle.
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Australian households are among the most indebted in the world and the interest rate increases by the Reserve Bank will generate a big potential problem” for many people and the wider economy.
We have a big potential problem courtesy of the way we have run our housing system, for not just the last decade but for the last at least three decades.
Our housing system is only weakly governed by real housing policy objectives, that is, ensuring everyone can own or rent a decent affordable home. Instead, it is governed by objectives of wealth creation, and sometimes by concerns about financial system stability.”
Macro-economic issues like the rising cost of living, inflation and economic pressures are influencing trends in first-party fraud, with almost one in five (19 per cent) Australians believing it’s okay to tell a “white lie” and report having less debt than they actually have in a financial service or loan application.
The implications for financial stability as rates rise are potentially significant!
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Another episode, thanks to research from Cookie, as we look at price reductions from the portals across Far North Queensland. Despite the massive spruiking we see a number of properties hanging around, and price reductions to match.
This not a scientific piece of analysis, and we do not know the story of single properties, but the trends are pretty clear. And we use data from our core market models to highlight the drivers.
The latest edition of our finance and property news digest with a distinctively Australian flavour.
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Join me for a live discussion about the current state of the markets with Tony Locatro, Perth based Investment Manager with Alto Capital. We will pick apart the latest movements and consider the implications for wealth protection and growth. Tony specialises in the small cap sector.
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.
My Monday chat with Edwin, which covers the latest numbers of property listings in Sydney, and our discussion is packed with insights about the market, and potential future trajectory.
Go to the Walk The World Universe at https://walktheworld.com.au/
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.
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.
More research on property price reductions, thanks to Cookie. This time we look at trends in Canberra where incomes are above average, but financial pressures are rising.
Go to the Walk The World Universe at https://walktheworld.com.au/
