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Breaking Square | 26th April

Brace for impact…. The latest CPI figures were released on Wednesday and they were higher than expected and confirmed inflation is still very sticky and will give the RBA further cause for concern. Most economist have done a U-turn on their predictions in regards to when the next rate cut will occur. There are some who still think it will happen in September and many saying November, which would be the last meeting of the RBA board for the year.

However this morning I read in the Financial Review, the Chief Economic advisor at Judo Bank, Warren Hogan claims the RBA will need to lift rates by 0.25% at the August, September and November meetings, taking the cash rate to 5.1%, which would see variable rates above 7%.

Mr Hogan was the nation’s top economic forecaster in the Financial Review’s first annual ranking of economists in 2023, being the only one of the 29 surveyed analysts to predict the RBA would raise the cash rate five times last year to 4.35 per cent.

If Mr Hogan is right, then it is critical Sellers and Buyers alike, get on with their plans – let me explain. With every rate increase, there is a decrease in a Buyer’s lending capacity, however, once the loan is locked in, the bank does not review it, unless of course the mortgage holder is defaulting. Conversely, if a Seller is thinking of selling, best to do so when buyers have more capacity to borrow. The other issue for Sellers to consider, if rates do go up, there will be more listings as a result, which will put downward pressure on prices.

Understandably it is hard to say which way the RBA will act and certainly we have seen in the past, these presumably smart people, get it wrong; but the current data cannot be dismissed. As I have stated before, you don’t base decision purely on the here and now, property has always been a long game, but if I was asked today by someone who was either thinking of selling or buying in the next several months, my unequivocal answer would be, do it sooner rather than later.

Despite what may happen with rates, if anyone did buy or sell, due to this feeling of urgency, it would be a win-win, perhaps just accelerating the process, so no harm done.

On another note, it was impressive to see a lot of people at Dawn Services around the country yesterday. I attended one at Hamilton and was impressed with how many turned up. It is reported the numbers across all venues have exceeded previous years. Perhaps it is a reaction to all the uncertainty and recent tragic events that has the power to bring people together, to reinforce that there is some good in the world, heaven knows there are many who need some good news or at least some comfort, even for a short period of time.

And now for something totally off-reservation. You may have seen the news reports about the latest Bluey episode where Bluey’s mum has to drive 3 children in the car, however she allows Bluey to sit in the front seat of the car with only a seat belt on; not a proper restraint for a 7 year old. This episode has got a lot of attention and the news items were interviewing car seat experts etc to discuss the matter and explain perhaps a regular person would not get off lightly as did Bluey’s mum in the episode.

It is here that I have a big question and wonder is this what we have come to?? Bluey is not real, it’s a cartoon; make believe. Remember when we used to watch the Coyote and Road Runner cartoons? The Coyote would try and blow up the Road Runner with TNT dynamite, however they all managed to live despite falling off cliffs, down holes and the aforementioned dynamite. I don’t ever recall a discussion about this, or warning parents to not allow their children to play with dynamite. As a child I certainly didn’t think it was real, just funny animation.

Perhaps I am showing my age, but I question why we now take cartoons literally or is it that many folks now live vicariously through social media and the like? Oh well, that’s my little rant for the week, it just struck me as strange.

Quick wrap for the week. Numbers were slightly lower at our open homes, however there are still quality buyers looking, with several properties going under contract. One in particular was interesting. An off-market townhouse sale with a lease in place until February next year. After many phone calls to drive buyers to a one-off inspection, which resulted in multiple offers and a price that I sense exceeded everyone’s expectation. So it proves with a little hard work and attention, we can get a great result for our owners.

Our Collective Group held the monthly auctions at the Carlile on Saturday and if you account for properties sold prior, on the day and within 2 days of the auction day, we had over 90% clearance. However I still see other agents listings sitting on the market and I think this is due to some agents not adjusting, thinking they can just put up a sign and list it on the internet and it will sell. There is a big difference between the Transactional agent and the relationship building agent.

Take care over the weekend, there will be many who took today off, so expect the roads to be busy on Sunday.

Until next week, stay safe and be kind.