After a sensational long weekend of great weather and football entertainment vendors and buyers are into the final mad dash to sell and buy before Christmas 2014.
It seems unlikely that a rate rise will be seen this year after the Reserve Bank met this week and left the official cash rate on hold for October. However the RBA has been more vocal in recent months about the housing market and is doing its best to cool the heels of buyers, worried prices have increased at an unstable rate.
Certainly we have seen dramatic price increases in the Sutherland Shire especially in the first 6 months of this year. As I see it though while the shortage of listings continues, the pressure on prices will remain. Buyers listening to the RBA’s warnings seem not as desperate to purchase as earlier in the year. What hit home for me recently was the figures showing that first home buyers are generally in their 30’s or 40’s.
Sydney is definitely an internationally priced real estate city!
Some of our new Spring listings below.
5 Cook St, Caringbah South
14 Rose Ave, Connells Point
19/1 Ocean Grove Ave, Cronulla
If you’re thinking of selling this year, please give us a call today.
Tomorrow it will be exactly 10 weeks till Christmas. For prospective sellers this means getting your property on the market now! This will give you 4 weeks marketing and then the standard 6 weeks settlement period. Often around this time settlements are changed, shortened or lengthened to allow for the Christmas/New Year period when solicitors close down. Purchasers will need to exchange on a property by end of October to ensure you can enjoy the Christmas festivities in your new home, otherwise settlements are using scheduled mid to late January.
As the days get warmer and we head into summer, it is the perfect time to sell your home. In November it is expected we will get another RBA interest rate cut, and if the banks pass this on buyers will have an extra incentive to buy this spring/summer.
Beach & Bay has a number of new listings and we look forward to launching them over the next week.
Time is running out fast for property owners to fix their variable mortgage rates before the RBA increases the cash rate next week by 0.25% and the big four put another 0.25% on top of that.
I should mention at the outset that I have fixed my rates this week.
Variable rates are in the high 6% and the 3 year fixed rate is less than 7.5%. For many there is only 0.5% difference between fixed and variable. So if variable rates do go up next week by half a percent, fixed and variable rates will virtually be equal. Of course, the banks may well move fixed rates up as well, giving borrowers an extra incentive to move quickly i.e. before Melbourne Cup day, or three business days from now.
You have been warned. Jobs growth is still strong and inflation figures out yesterday showed that annual inflation is still running at 2.8% pa or close to the RBA’s limit. Furthermore, the RBA knows that it is carrying the entire burden of reigning in inflation because the State and Federal governments are in such political paralysis that no tax rises (e.g. carbon tax or minerals tax) will get through any time soon. Finally, all bank CEOs have been saying how they need to raise rates.
On balance I think rates will rise 0.5% by mid November with the RBA leading the way with a 0.25% cash rate rise on Melbourne Cup day. If I am right variable rates will be about the same as my fixed rates. If I am wrong then the RBA probably will not be able to raise rates until February, which is too long to wait. I think the RBA will move on Tuesday and the commercial banks soon after.
With Christmas around the corner and no RBA meeting in January, odds are we will get a rate rise. Happy Melbourne Cup, hope you pick a winner!
Please note, the above comments are my personal views so please check with your financial advisor before moving on my suggestions.
At last a rest from the sharpest rise in mortgage rates in two decades (1.6% since October 2009)*.
The RBA has chosen at its meeting Tuesday 3rd August to keep its cash rate steady at 4.5%. It is unlikely any commercial bank will be brave enough to raise rates this side of the Federal election, even though they claim funding costs are rising steadily as fixed deposits mature and cheap overseas money cannot be renewed.
The RBA stated that the rate of CPI increase was a little over their hurdle rate of 3% per annum and was likely to stay above that rate for a few more quarters. This is due to the ongoing impact of tax changes on alcohol and tobacco (up 5.9%) and increases in gas prices (up 1.7%) and petrol (up 2.1%).
Reading between the lines it is unlikely we will see another interest rate rise till at least November, by which time the September quarter’s CPI will be known.
*according to Rory Robertson of the Macquarie Bank