Today’s interest rate rise of 0.5 has increased the cash rate to 2.35%, a 7 year high.
Although today’s announcement like the others, wasn’t unexpected, it doesn’t make the news any easier. Thinking back to 2020, the RBA rates weren’t expected to lift until 2024; that feels like a lifetime ago. But with a healthy dose of perspective, it’s still a far cry from the 17.5% rates of 1990. So, here’s a timely reminder that the average rates since have been just 3.93%.
What does this all mean for the property market? Sorry to disappoint, but I don’t know, no one knows. But I can tell you what I think it doesn’t mean. It doesn’t mean the majority of sellers will now be instantly be under mortgage stress and the market is going to be flooded with homes selling for 50 cents on the dollar. Like a lot of would-be buyers are hoping.
From where I sit as a real estate advisor, across the table from Aussie mum and dads, who are thinking of selling to upgrade postcode or add that extra bedroom, it’s just all too scary. Meaning a majority of stock is being held back from the market, and to be fair that’s probably a good thing as it keeps supply and demand in check.
This is where I flip the script. Consider this. For those that are brave enough to try their hand at property market roulette, the rewards can be huge. The plan is this. Sell now, in a market that still offers reasonable demand, and upsize or invest with decreased competition meaning minimised change over costs.
If you’d like to discuss your options, we’d love to help.