Market Essentials - February 2023

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Market Essentials - February 2023

After the RBA’s most aggressive tightening cycle in over 30 years, top experts surveyed by The Australian Financial Review predict only two further rate hikes in 2023 as the RBA pauses to evaluate the effects of the fixed-rate mortgage cliff.

According to CoreLogic’s records dating back to 1980, Australia has experienced the worst property downturn in history, with the average dwelling price dropping by 8.4% between April 2022 and Jan 2023.

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Market Essentials - December 2022

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Market Essentials - December 2022

This month Super funds announced plans to invest $41 billion in properties over the next 10 years in line with the government’s housing accord. According to the Industry Super Australia report though, one of their biggest roadblocks will be insufficient large-scale developments to invest in.

Beta Shares modelling shows mortgage affordability at its lowest since 1990, with an average mortgage repayment to income ratio of 42.8%. The low employment rate is keeping mortgage arrears at bay, but further rate hikes may bring these to a tipping point.

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Market Essentials - November 2022

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Market Essentials - November 2022

The RBA increased the cash rate by a further 25 basis points this month, bringing it up to 2.85%. Current rates are still considered modest by economists in light of the highest inflation on record in three decades.

The new Federal government has delivered its first budget this month with a plan to build 1 million new homes over the next 5-years. The plan provides for 30,000 social and affordable rental homes.

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Market Essentials - October 2022

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Market Essentials - October 2022

Australia’s house prices continue to fall, driven by reduced lending capacity and rising interest rates, which currently linger between 4% and 5%. According to Capital Economics Marcel Thieliant, this trend is set to continue as central bank looks to cool inflation.

This month the Reserve Bank raised interest rates by another 25 basis points to bring the cash rate to 2.6%, contributing to a further drop in confidence amongst buyers.

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Market Essentials - September 2022

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Market Essentials - September 2022

This months interest rate rise of 0.5 per cent marked the RBA’s fifth consecutive rate rise, taking the cash rate to 2.35 per cent for September.

This takes the cash rate to its highest level since December 2014 and prompts questions of how long rate rises will continue. To date, this is the fastest interest rates have risen in 28 years as the RBA tries to curb inflation.

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Market Essentials - August 2022

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Market Essentials - August 2022

The RBA increased interest rates again this week as inflation rose to 6.1 per cent; the fastest pace in more than two decades. Meanwhile, Treasurer, Jim Chalmers, has warned us to ‘brace for pain to escape recession’ later this year.

Despite the gloomy economic forecast, there were mixed messages in the property market last month, with auction clearance rates falling below 60 per cent for the seventh straight week but prestige properties going gangbusters.

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