Despite rising interest rates, September’s Core Logic RP data saw a slowing down in the decline of prices across the country to -1.4%. Tim Lawless from Core Logic says that most home buyers have ‘priced-in’ interest rate rises, but he warns that all eyes are on the Reserve Bank of Australia to see how much further they are going to pull the rates trigger.
“It’s possible we have seen the initial shock of a rapid rise in interest rates pass through the market and most borrowers and prospective home buyers have now ‘priced in’ further rate hikes. However, if interest rates continue to rise as rapidly as they have since May, we could see the rate of decline in housing values accelerate once again,” Lawless says.
In total, house prices are down -5.5% from the last peak, a breather considering that prices had moved up 25.5% from the previous low.
Real estate auctioneer Tom Panos from The Block fame has expressed cautious optimism about the market, with auction clearance rates continuing to improve.
Australia. The Richest Place on Earth.
Credit Suisse’s New Global Wealth Report has ranked Australians as the wealthiest people on the planet, edging out Belgians and New Zealanders to take this year’s top spot. And we have housing to thank for coming out on top of the pile.
Australians are a sensitive bunch when it comes to housing wealth. It’s called the wealth effect. When prices go up, we feel (note that word) wealthier and open our wallets. When prices go down, we feel less wealthy and often stop spending (in which case housing becomes the Great Australian Nightmare for retailers).
Such is the relationship between housing and our spending habits. Throw in the Reserve Bank pulling up on the interest rate lever and that relationship gets more tested. But some perspective here is important: since the Covid pandemic hit Australia in March 2020, housing bucked all expectations and soared well into the double digit growth range. On the downside, it is unlikely that doom and gloom expectations of some commentators are likely to eventuate as housing shortages and the return of immigration puts a floor under price falls.
One of the most difficult pills to swallow for home owners is the idea of putting our homes on the market when prices are falling. After all, we’ve spent nearly two decades watching house values rise to nosebleed levels. We also know that apart from economic factors, market confidence and FOMO ‘fear of missing out’ are strong drivers on the buy side of the market.
But one of most under commented factors on the sell side of the market are vendor expectations. Of course, we all want to sell at a premium and buy at a discount. But when seller expectations are out of whack with the fundamentals of the market, we risk having our houses on the market for longer periods of time. And in a rising interest rate environment where each 50 basis point rise reduces borrowing capacity by 5%, unrealistic expectations are likely to work against us.
The upside? I wrote elsewhere that for those looking to upgrade their property, selling now might actually be the smart option. Take a read.
UCI World Road Race Championships
Well, didn’t Wollongong sparkle around the world during the UCI cycling championships? It was slow off the mark when crowds failed to eventuate early in the competition, but by the end of the second weekend, cycling mania had taken a grip in the ‘gong.
It was lovely to see #wollongong trending on Twitter in European languages as an estimated 300 million people tuned in watching the women and men’s elite races work their way through Wollongong’s suburbs.
Ramah Ave was the place to be as Mt Pleasant mad cycling enthusiasts cheered on competitors up the steep climb, willing on the attacks and making memories.
Duck! It’s Magpie Swooping Season!
Whoosh! Magpie swooping season is in full swing in Wollongong, as European cyclists laughingly discovered during September’s world cycling event. Here’s a few things you should remember about Magpies.
Breeding season is between August and October so nearly all attacks occur in that period. These are intelligent birds – they typically return to the same place each year, swoop within a 100 perimeter of the nest and creepily, they can remember a face!
Getting swooped can be a terrifying experience, but not all magpies are airborne psychopaths. In fact, experts predict that only about 10% swoop and they are only doing it to protect their young. Running or cycling away at high speed is only likely to provoke an attack. Get off your bike and walk slowly through the nesting area – or better, avoid it altogether. In the event of an attack, feel free to share your swooping stories on our Facebook page.