Rising Inflation Raises Stakes for RBA’s Policy Decisions
Tristan Larkin - Tomii Buyers Agents
Buyer’s Agent | Expert in securing off-market and pre-market properties in Melbourne and the surrounds of VIC
In This Week’s How's The Market | Edition 87
Rising Inflation Raises Stakes for RBA’s Policy Decisions
Recent inflation data has raised concerns about Australia's economic stability, suggesting the RBA may need to take further measures to prevent economic hardship.
The Australian Bureau of Statistics reported today that inflation has finally reached the RBA's target range, with the latest consumer price index rising 2.8% over the past year.
This aligns with the RBA's preferred inflation band with the data, easing concerns about interest rate hikes and suggesting a potential shift in economic policy.
As inflation returns to the RBA’s target range, new housing data highlights increasing urgency for homeowners facing high mortgage repayments.
Economists warn that mortgage relief without targeted relief could hinder homeowners' debt management, posing a delicate balance for the RBA in balancing inflation control with housing sector stability.
RBA Governor Michele Bullock has indicated willingness to raise rates to curb inflation, as unchecked levels could erode purchasing power and disrupt financial stability.
Analysts predict that if inflation remains high, an increase in rates may occur even if immediate action isn't taken.
Australian mortgage holders are facing financial strain due to rising home loan costs, threatening their quality of life and economic stability, potentially leading to increased housing insecurity and reduced consumer spending.
The ABS reported significant price increases in recreation and culture (+1.3%), food and non-alcoholic beverages (+0.6%), and alcohol and tobacco (+1.3%) this quarter.
Today’s inflation figures are broadly within the RBA’s target then, meaning there will be more pressure for a rate cut in November.
What The Agents Are Saying
The buyer’s market continues!
More stock is coming online and the effects of previous properties lingering on the market are beginning to be felt.
This week we have spoken with multiple agents who have properties that have passed in at auction and very motivated vendors that need to sell urgently.
Some vendors have already purchased and need to sell their current property in order to settle. Others are trying to buy and cannot make offers until their property has been unconditionally sold.
We are also starting to see a lot more off-market properties in our inboxes. This is common for this time of the year as some vendors are planning their properties for mid Feb auctions and are testing the market quietly now.
However, on the side of the spectrum, we are also going through some properties that are still currently tenants with desperate vendors that need to sell and know their property would struggle online due to its presentation and condition.
I’m also noticing I’m getting a lot more phone calls from agents following up about properties they are trying to sell that may be struggling.
领英推荐
The Wow Factor!
Here’s a rare chance to own a property that exudes a beautiful blend of timeless European grandeur and modern sophistication.
The formal sitting room features a marble mantelpiece, a large fireplace, European oak Versailles-style parquetry, and tall casement windows, creating a dramatic setting.
Check out the facade and the period details!
Price Guide:$10,000,000 - $11,000,000
In The Media?
Young buyers are planning to renovate original homes in Belmont and Hamlyn Heights, aiming to create a brighter future for the area.
A couple secured a two-bedroom at 32 Sycamore St, Hamlyn Heights, house in a $580,000 post-auction deal.
Jellis Craig Geelong agent Malinda Leonard reported that the buyers were the only group to bid for the 522 sq m property at Saturday's auction.
Buyers often opt for properties with renovation potential, enabling them to build equity and personalize spaces more affordably than purchasing newer, more expensive homes.
The trend of "fixer-uppers" is gaining popularity as buyers invest time and resources in customizing homes, making them more accessible for first-time buyers and lifestyle enthusiasts.
Final Thoughts
Most importantly however is the time taken for interest rate changes to flow through the economy. The risk is that rates are kept too high for too long and the sluggish economic growth turns into a recession.
It may encourage more buyers to hold off on purchasing an established property if they were already on the fence about buying something new off-the-plan.
If you or someone you know would like assistance to buy this year in these markets, 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 [email protected]
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.