What Needs to be Aligned for Interest Rates to Drop Sooner?
In This Week’s How's The Market | Edition 92
What Needs to be Aligned for Interest Rates to Drop Sooner?
The Lakehouse: Redefining Luxury Living
Breaking Records: Median Home Value Reaches $800K in Australia
What Needs to be Aligned for Interest Rates to Drop Sooner?
The governor of Australia has stated that public spending remains a significant challenge for the Reserve Bank of Australia as it determines its interest rate cut timeline.
Michele Bullock suggested that while it's challenging to predict a timeline for rate cuts due to variable error bands, controlling consumption could be more manageable.
Ms Bullock confirmed the bank's readiness to respond if public spending falls faster than forecasted, in response to interest rate cuts.
Black Friday and Cyber Monday sales are expected to boost consumption at the end of the year, along with the annual spike in December spending.
She emphasized the need for confidence in the direction of a 2-3% increase, stating that confidence is not required to be present.
The governor stated that the bank is firmly defending her argument that Australia remains in a distinctive position.
The tighter labor market is causing a continued distinction between Australia and other nations, according to her warning.
Ms Bullock explained that while implementing a similar policy approach, the time to adjust domestic monetary policy settings may vary among peer central banks.
The RBA monetary policy committee is set to make its final decision on interest rates for 2024, with economists predicting the first cash rate cut in May.
What The Agents Are Saying
The desperation around clearing the remaining listings is definitely in the air around my recent weeks conversations with agents.
Just this week I have seen multiple properties with vendors that have already bought and are settling on their new property in the new year and have had their current home pass in at auction.
Now in a desperate position, these agents are pushing for offers, even below asking just to get a deal over the line.
One thing that I have heard multiple times this week in these conversations with agents is that their vendors are now just hoping to get back what they paid for the property 2, 3 or 4 years ago in hotter markets.
I have always said that December is a great time for buying, but I think in today's market, buyers have a huge amount of leverage with a large advantage.
The Wow Factor!
2 McGaffins Road, West Wodonga, Vic 3690
An extraordinary home, "The Lakehouse" showcases a harmonious blend of European-inspired design and unrivaled executive luxury living in a setting of refined elegance and expansive natural beauty.
The home's grandeur is evident in its elegant formal lounge and dining areas, making it an ideal space for entertaining family and friends.
The home boasts stunning grounds, an ornamental lake, and peaceful outdoor living areas surrounded by established English trees.
Explore the Pinnacle of Lakeside Elegance!
Price Guide: $2,750,000 - $2,850,000
In The Media
Breaking Records: Median Home Value Reaches $800K in Australia
The average home price has hit $800,000 for the first time in history, despite buyers being spoiled for choice thanks to a surge in new listings during spring.
REA Group's senior economist, Eleanor Creagh, reported a 0.15% increase in national home prices in November, bringing them 5.53% higher than the previous year.
Hobart and Adelaide experienced the strongest growth in capital cities last month, with Brisbane and Canberra also experiencing a 0.28 per cent increase.
Melbourne's capital value dropped to fifth in November, while Adelaide's dwelling value surpassed it, following Brisbane's earlier rise.
Given the rise in listings in the capital cities, the regional markets outperformed the capital cities, with prices in regional areas rising 0.26 per cent over the month compared to a tenth of a per cent in the capitals.
Ms. Creagh stated that a softening in growth and an increase in stock for sale have provided buyers with more options and reduced transaction urgency.
The surge in property sales this year has fueled strong demand, but it has also slowed price growth due to affordability constraints and a persistently high interest rate environment.
Regional Victoria's increased choice in purchasing options is contributing to a subdued price momentum due to varying supply and demand conditions.
Ms. Conisbee stated that markets are now forecasting two rate cuts for 2025, the first in May and the second in September.
The main driver of this has been the election of Trump in the US and the potential for widespread economic challenges in the US, and by extension, for us stated Ms.Conisbee.
Final Thoughts
The central forecast predicts that by the end of 2025, inflation will be back below 3%.
Melbourne property prices are currently 4% lower than before the RBA started raising interest rates therefore,with that said we can see that the trend is gradual and slow, but if continued, the appropriate rate cuts may be considered.
If you or someone you know would like assistance to buy this year, book in a call and we can discuss if we can help.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
