REIP – Inside Real Estate July 06, 2022

It’s not news to anyone that the RBA has been planning another interest rate hike this month, and yesterday the RBA announced a further 50 basis point rate rise adding hundreds of dollars to monthly payments for the average borrower.

“Today’s increase in interest rates is a further step in the withdrawal of the extraordinary monetary support that was put in place to help insure the Australian economy against the worst possible effects of the pandemic,” RBA governor Philip Lowe said in his statement.

It seems that borrowers are looking at the steepest rate hikes since the early 90’s. The forecast is for two further rate rises which will put further pressure on a deflating property market. Global inflation is high, we have lowering consumer sentiment, supply chains are being disrupted, war in Ukraine and rising costs in food, petrol and housing. Some positives are that many households have built in buffers with high levels of savings, labour market is tight with lowest unemployment in 50 years.

The 3rd hike is another step towards the withdrawal of the monetary support during COVID, we will all watch with interest to see what further rate increases look like and if it is having the desired impact which is to bring inflation levels down to targeted levels.

This month, Tim Lawless and I discuss Australia’s housing downturn which has gathered pace in June. There have been continued value falls in Sydney and Melbourne driving this month’s steeper drop of -0.6% in dwelling values nationally and as we housing conditions slow, we will see it swing in favor of buyers. Meanwhile the rental market continues to go from strength to strength resulting in rents rising at a faster rate than housing values. Watch the full video below.

Housing affordability within the rental market is continuing to be a real concern. The lack of housing, mile long inspection queues and threat of heavy increases on rent have created a perfect storm that I don’t remember ever seeing before in all my years in real estate.

While there is no silver bullet to address these affordability issues, when we have people resorting to living in caravans and tents in a first world country, I think we can all agree something has to give.

For much of July I’ll be travelling around presenting demos of the much anticipated REIP Nexus Platform. For anyone who knows me, it won’t be a surprise that future proofing our data and our industry is a core passion of mine, and I cannot wait to bring this platform to market!

More information on REIP Nexus is below and if you haven’t already signed up for a demo, I encourage you to do so.