Breaking Square | 17th May 2024

Some folks probably think listening to the budget which was handed down on Tuesday night, is a bit like watching paint dry and in part, it is. I however have a quirky interest in the budget and don’t mind tuning in to hear the rhetoric and then the obsessive commentary that follows.

What was clear on the night and the following day, was a nearly unanimous thumbs down for most of the budget from Economists and many in the media. Of course there are good initiatives offered up and the usual small print that buries some of the bad news, but the power bill hand outs not being means tested was a big ticket item that most thought was a bad idea – however, you don’t have to be too cleaver to work out what the Government is trying to do in regards to inflation with this offer. It’s a bit of smoke and mirrors, as the reduction in bills will lower measured inflation, but the RBA will most likely strip it out when making their deliberations, but it gives the Treasurer the opportunity to say, we lowered inflation and the RBA is making their own decisions, so the bank looks like the bad guy/person.

Overall, I think it is still a wait and see if the budget is inflationary, with the increased spending, tax cuts and hand outs; the Reserve Bank will more than likely take a wait and see approach as well. You may have heard unemployment rose above what the markets thought, so the ASX soared on the news and of course, everyone took a U-Turn on the prospects of a rate rise – oh how quickly everyone can change their tune. It is no wonder everyone is confused or has concerns.

The next big pieces of data to come out in July will be the next round of CPI numbers. This data will be most likely the information to determine the next move on interest rates. My hope is for good news, that inflation continues to fall and the prospect of rate rises is finally put to bed. All the chatter about rate rises or rates not being cut until next year, is definitely having an impact on buyer sentiment. So stay tuned to next month’s RBA meeting, where it will be widely accepted that rates will be held and the journalist will try to get Michelle Bullock to comment on the budget, which of course she will be very diplomatic.

Now for a bit of house keeping and heads up. This week I received another notice from a tenant claiming she was experiencing Domestic Violence. Until about a year ago I had never had to deal with these types of situations, but I have now dealt with several, so I thought it prudent to raise the issue as you may want to discuss this with your insurer to confirm if you are covered for such events.

The legislation states if a tenant is experiencing Domestic Violence, they can give 7 days notice to vacate without penalty, which means we cannot charge break lease fees and you may experience vacancy as 7 days is generally not sufficient time to secure new tenants. The tenant has a responsibility to pay rent up to vacate date. The real kicker is, if there is damage caused, as a result of the Domestic Violence, the owner has no recourse – yes you heard that correctly.

For example, a door is kicked in or holes smashed in the wall due to a fight etc, the burden of repair rests with the landlord, so that is why I raise this issue as I would like to rest easy knowing our owners are covered by their insurer in such events – so please ask the question of your insurance company.

The latest issue of the Ray White Now Magazine hit the streets this week, please click on this link to read the latest edition.

https://joom.ag/0Akd

Until next week, stay safe and be kind.