After 8 interest rate rises in a row we now refer to inflation and interest rate rises as “the Jet Ski Index”.
First, the boring stuff:
Another .25% Increase. The cash rate is now at 3.1%. The last time rates were this high, the average Australian home price was just $520,000
Now the juicy stuff: According to the Bureau of statistics, house hold savings are down to just 6.9% meaning either A) we’re silly and still spending too much, keeping inflation going, or my opinion is choice B) Cost of living is eating up our savings. Which leads us to the Jet Ski Index.
Jump onto the good old Facebook marketplace and see just how many Jet ski’s, boats, caravans and other miscellaneous toys are for sale right now. The Covid- tax is over and used car sale prices are falling fast. People are looking to bolster savings to weather the interest rate storm. Like a good closing down sale, prices are slashed and everything must go!
But what does this mean for real estate prices in Geelong?
Vacant land sales are down 41% in the last quarter alone. Big volume builders are scraping for new clients as their pipeline of work is starting to thin out. Homes needing renovation are sitting longer on the market than normal. So I can hear you ask, wheres the good news???
In come our saviours, Investors and renters.
If you had $1,000,000 in cash right now and invested it into a big bank term deposit you’d be getting around 3% return per annum; or you could put that same amount into buying a home in Geelong and capital growth +/- aside, rentals are returning $700-$800pw right now. To quote someone smarter than I “Money flows in the direction of value” and that’s what we’re seeing right now as investors are coming back in droves. Then there is those renters out there, jacked off with paying $600 per week for 1 bathroom and 1 car garage they’d rather spend that $31K on a mortgage even if it is over odds. So it’s not all doom and gloom,
So if you’re thinking of buying, selling, leasing or referring in this crazy market, we’d love to hear from you
