In tonight’s show we catch up on Edwin’s predictions – does NOSTRADAMUS walk among us? We look at the massive rise in Council Tax, and also the rise in listings, but only in some places.
And given the upcoming election we examine some of the early promises being made in the quasi campaign, despite the gap between the promised 1.2 million well sited homes over 5 years and what is happening on the ground.
Edwin also highlights an important issue for a prospective property purchaser – get your paper work in order!
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Today’s post is brought to you by Ribbon Property Consultants.
The news outlets are full of more property news, with some spruiking that the hope of a rate cut in February has spurred people into action after the holidays, with a focus on Melbourne property prices rebounding.
So, let’s look at the data and see what is happening. Actually, the January update on prices from PropTrack showing that nationally prices fell just 0.1% in January, to a median value of $796,000.
Clearance rates are another metric in focus, but as I have discussed before they are also full of holes. Specifically, Preliminary clearance rates generally fall as the results of more auctions are collected. Domain reported a 66.6% national clearance but a year ago it was at 60.6%. CoreLogic preliminary data showed that the combined capitals returned a clearance rate of 65%.
As for wants ahead, well of course no one really knows. Which is why I run scenarios, which will be updated shortly. This week we had predictions from KPMG. As discussed in the AFR, KPMG chief economist Brendan Rynne said Melbourne’s house prices are tipped to climb 3.5 per cent this year, rebounding for the first time since last February, and slightly outpacing Sydney, fuelled by improved housing affordability after five years of sluggish growth, while Sydney’s housing values are expected to increase by 3.3 per cent, which is also higher than the 2.5 per cent gain last year.
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Many are calling for a RBA cash rate cut in February, but as we look at the overall data indicators, its a line ball call, and stripping away the political pressure and overdone economic commentary, the case is not as strong as you might think. Indeed, the latest RBA Credit Aggregates were pretty strong, and inflation expectations are less well anchored than some seen to believe.
I agree the February meeting is a “live” meeting, but don’t over estimate the probability of a cut.
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Digital Finance Analytics (DFA) Blog
Is The RBA Really All In For A Rate Cut In February?
Many are calling for a RBA cash rate cut in February, but as we look at the overall data indicators, its a line ball call, and stripping away the political pressure and overdone economic commentary, the case is not as strong as you might think. Indeed, the latest RBA Credit Aggregates were pretty strong, and inflation expectations are less well anchored than some seen to believe.
I agree the February meeting is a “live” meeting, but don’t over estimate the probability of a cut.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
Australia has been a global outlier in the current easing cycle as most developed world central banks, including the Federal Reserve, have already cut substantially. The Fed is due to announce the outcome of its meeting later today and is expected to stand pat. The RBA, in tackling inflation through 2022-23, opted for a lower peak rate than global counterparts. It worried about the capacity of heavily-geared households to cope with significantly higher mortgage repayments.
But we got a softer-than-expected annual underlying inflation figure of 3.2 per cent for the 3 months to December from the ABS today, and the journos are out in force saying a rate cut from the RBA is February is all but certain now, which of course would be welcomed by households who are mortgaged to the hilt, and music to the ears of politicians ahead of the election. Not so good for savers mind you.
The annual trimmed mean gauge of consumer prices, which shaves off volatile items, rose 3.2% in the three months through December, compared with an expected 3.3% gain and on a quarterly basis, core consumer prices rose 0.5% versus a forecast 0.6%.
Economists at Westpac, Royal Bank of Canada, TD Securities and AMP all brought forward their calls for the first Reserve Bank cut to February. Goldman Sachs which was already predicting February and May rate reductions, now sees an easing in April as well.
But not so fast, because whilst the number landed in a place to make next month’s Reserve Bank of Australia board meeting a cliffhanger, there is still a case to do nothing. And whilst the market has gone all with an 80 to 90 per cent chance of a cut, there is also a reasonable case to hold steady and await more information on the economy. So perhaps it’s more like 50-50.
But given the breadth and depth of government cost of living support, with energy bills credits, rent assistance, 50¢ public transport in Queensland and a revision to a previously mismeasured childcare subsidy even the trimmed mean has been distorted by the huge breadth of government subsidies in the December quarter.
Contrary to common perception, subsidies can affect underlying inflation and could accelerate the RBA cutting interest rates, even if the grounds for doing so may be dubious. Chalmers and Treasury may have outmanoeuvred the RBA. Hence, the lingering doubts about a rate cut relate to whether the RBA board feels confident enough about disinflation based on a sole quarterly number.
So, the key question is, will the politically driven handouts which have been spayed about the place liberally, and sufficient to mask inflation even in the trimmed numbers drive the RBA to cut, in which case politics ahead of the election will have won, at the expense of tax payers, who know the true inflation costs are still way higher than numerwanged. And then of course we have the impact of the lower exchange rate to content with ahead, which could also be inflationary. So a 50 50 call for February, but perhaps politics have won, for now.
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Go to the Walk The World Universe at https://walktheworld.com.au/
This is an edit of a live discussion with founder of bRight Agent, Aaron Scott, and our Property Insider Edwin Almeida, as we examine the current property market, and how picking the right Real Estate Agent can make a BIG difference.
Find & Compare Local Agents, and SAVE MONEY with bRight Agent! https://brightagent.com/
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
DFA Live Q&A Replay: Let's Play The Property Game By New Rules...
This week we examine the post holiday ramp up ahead of “Super Saturday” in a couple of weeks. The press coverage has been all about listings rising, but is that the whole picture.
We also look at the risks of purchasing the wrong property and the problem of home insurance, with more properties likely to be uninsurable.
And Edwin has some tips on how to same money on insurance for homes.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts
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.
Something a bit weird is happening in property markets across Australia.
Normally as we head into the peak autumn selling season momentum and prices tend to step up. But so far sellers are racing to beat the competition into a falling market already padded by properties that failed to sell in spring last year and this has pushed up the volume of residential listings in parts of Sydney and Melbourne more than 50 per cent on last year according to CoreLogic data. And now its spreading to Brisbane and Perth too.
“Brisbane looks to me like a really soggy market and I wouldn’t be surprised if house prices go negative in the next couple of months,” said AMP chief economist Shane Oliver. Brisbane could be the next capital to enter a downturn after Sydney. “It’s often the case that once the momentum turns negative, you go further negative for a while, so when prices are falling, history tells us that can go on for a little bit. I think momentum is starting to work against Brisbane, and it is now weakening at a similar pace as Sydney was six months ago.”
So for now, perhaps Brisbane is the one to watch…
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.
Digital Finance Analytics (DFA) Blog
Is Brisbane The Next City To See The Home Price Fall Shoe Drop?
Something a bit weird is happening in property markets across Australia.
Normally as we head into the peak autumn selling season momentum and prices tend to step up. But so far sellers are racing to beat the competition into a falling market already padded by properties that failed to sell in spring last year and this has pushed up the volume of residential listings in parts of Sydney and Melbourne more than 50 per cent on last year according to CoreLogic data. And now its spreading to Brisbane and Perth too.
“Brisbane looks to me like a really soggy market and I wouldn’t be surprised if house prices go negative in the next couple of months,” said AMP chief economist Shane Oliver. Brisbane could be the next capital to enter a downturn after Sydney. “It’s often the case that once the momentum turns negative, you go further negative for a while, so when prices are falling, history tells us that can go on for a little bit. I think momentum is starting to work against Brisbane, and it is now weakening at a similar pace as Sydney was six months ago.”
So for now, perhaps Brisbane is the one to watch…
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.
We are crossing the ditch to New Zealand today to look at the latest home price data from the REINZ, and the latest inflation data from the RBNZ.
The New Zealand property market experienced a relatively quiet month in December 2024. Actually, sales increased by 1.8% nationwide compared to December 2023, rising from 5,420 to 5,518 but the median price for New Zealand decreased slightly by 0.6% to $775,000 year-on-year. Month-on-month, the national median price fell 1.8% from $789,000. Auckland prices were down 4.3% over the past year, and Wellington was down 5.4%.
National inventory levels have risen, increasing by 18.5% year-on-year to 29,478. However, inventory levels have decreased by 13.3% compared to the previous month, down from 33,984. Nationally, the days to sell rose 6 days year on year to 42 days.
The latest data from the RBNZ showed inflation slowed, though locally grown inflation was still sticky. Ahead, we can expect further rate cuts this year, as inflation tracks in line the RBNZ expectation, though external factors like exchange rates are in play, increasing uncertainty.
Whether the RBNZ will need to push the OCR below circa 3.25% neutral levels or have the OCR move higher remains to be seen, with monetary policy settings for 2025 and beyond highly conditional on the (still-uncertain) economic outlook.
This uncertainty flows back directly into the property market, and despite the lower rates ahead, the broader uncertainties and financial pressures many households are feeling will continue to hold the property market in a zone of uncertainty, especially given weaker demand as migration rates continue to ease. There is no easy upside breakout in property prices here.