Dear Client
WARM WELCOME TO OUR NEW TEAM MEMBERS!
I hope this message finds you well. We are thrilled to announce the newest additions to our team who will be working diligently to ensure the best service for our valued clients.
Welcome Jesse Holcroft: We are delighted to welcome Jesse Holcroft as our experienced Property Manager for the northern suburbs of Adelaide. With a wealth of expertise in the real estate industry, Jesse brings a passion for client satisfaction and a commitment to excellence. We are confident that Jesse’s skills will enhance our services and provide our clients in the northern suburbs with top-notch property management.
Belated Welcome to Vicki Miller: Additionally, we extend a belated but equally warm welcome to Vicki Miller, who has joined us to work with our north-eastern based clients. Vicki’s dedication and professionalism have already made a positive impact on our team, and we are excited about the contributions she will bring to our client relationships.
As we continue to grow, our commitment to providing exceptional service remains unwavering.
Please join us in welcoming Jesse and Vicki to the team. We look forward to the positive impact they will have on our client experiences.
THE AVERAGE AUSTRALIAN HAS SEEN A 30 PER CENT DROP IN THEIR BORROWING POWER SINCE THE RESERVE BANK OF AUSTRALIA (RBA) BEGAN LIFTING RATES 19 MONTHS AGO.
In November, when the Reserve Bank of Australia (RBA) raised the cash rate by an additional 0.25 percent, the average earner experienced a notable decline in their maximum borrowing capacity—estimated at $10,500—revealed by financial analysis conducted by RateCity. This analysis, encompassing the ongoing rate-hiking cycle initiated in May 2022, disclosed a broader impact: the average earner now faces a reduction of over $200,000 in potential lending from Australian financial institutions.
Delving deeper into the repercussions, RateCity extended its examination to a hypothetical scenario involving a family of four. In this scenario, where one parent works full-time at the average wage and the other part-time at half of that wage, the maximum borrowing power suffered an even steeper drop. Specifically, it plummeted by $13,100 during the latest rate increase and by an astonishing $278,100 across all 13 hikes since May 2022.
Sally Tindall, the Research Director at RateCity, weighed in on these findings, characterizing the rate hikes as having “decimated” individuals’ borrowing power. Despite this financial setback, she acknowledged the resilience of Australia’s property market, describing it as having weathered the storm of consecutive rate increases.
In 2022, property prices experienced a decline as the RBA implemented a series of double hikes, but a scarcity of housing stock coupled with robust demand led to a resurgence in prices this year. Tindall recognized the paradox of decreased borrowing power juxtaposed with a buoyant property market, stating that while the average Australian might have less financial flexibility, committed buyers are unlikely to be deterred from participating in property auctions.
Nevertheless, Tindall emphasized that over the course of the 13 rate hikes, many individuals saw their home buying budgets slashed by over $200,000, prompting a revaluation of property acquisition plans. For those facing obstacles in securing their desired homes, Tindall advised a return to the drawing board, suggesting the exploration of alternative plans.
Tindall recommended investigating methods to augment borrowing capacity, such as seeking lenders offering ultra-low rates or closing credit card accounts. RateCity’s research indicated that closing a credit card with a $10,000 limit could potentially boost borrowing capacity by over $40,000 for someone earning the average wage.
As a cautionary measure following four months of cash rate pauses, Tindall urged prospective buyers to reassess their borrowing capacity with their banks in light of the recent rate hike. She advised those with loan pre-approvals to confirm their eligibility for the maximum amount and to gauge potential repayments in the event of further rate increases.
While banks conduct stress tests to ensure financial viability amid rate hikes, Tindall encouraged individuals to scrutinize these figures independently. Understanding the potential impact of a rate hike of up to 3 percentage points on their finances might prompt a second thought about assuming such levels of debt.
Borrowing power has dropped $200k for the average Aussie – Smart Property Investment
MELBOURNE-LED RECOVERY SEES AUCTION VOLUMES ACROSS COMBINED CAPITALS REBOUND 32.5%
After hosting a quieter auction market the week prior (2,023), a Melbourne-led recovery saw the number of auctions across the combined capitals rebound 32.5% last week. With 2,681 homes auctioned, last week was the capital’s third busiest of the year to date, behind only the week ending 2nd May (2,687), and the week ending 29th October (3,381).
With 2,013 results collected so far, the combined capital’s auction clearance rate held relatively firm, with last week’s preliminary clearance rate coming in at 69.0%. While holding below the 70% mark for a third consecutive week, last week’s early results were up slightly (40 basis points) from the previous two weeks, when preliminary results of 68.5% and 68.6% were recorded. With finalised results tracking in the low 60% range, last week’s preliminary clearance rate will likely revise slightly below the decade average of 65.8% but will remain above the level seen this time last year (57.6%) when 2,170 auctions were recorded.
Melbourne saw auction activity rebound last week, with 1,180 auctions held across the city. The previous week saw just 468 homes auctioned, with many vendors choosing not to compete with the start of the Spring Racing Carnival. With 897 results collected so far, Melbourne saw a strong rebound in its preliminary clearance rate (67.7%) after being ‘disrupted’ the previous week (60.8%, revised to 57.7% at final number). This time last year, Melbourne hosted 938 auctions and recorded a final clearance rate of 60.6%.
Holding above the 1,000 mark for the third consecutive week, Sydney hosted 1,041 auctions last week, down from 1,059 the week prior. Despite remaining above the 70% mark, Sydney recorded its lowest preliminary clearance rate in five weeks, at 70.4%. With 814 results collated so far, Sydney’s withdrawal rate rose to 15.1%, while the portion of properties passed in at auction dipped to 14.5%. The previous week’s clearance rate was 1.5 percentage points higher at 71.9% (which revised down to 65.6% once finalised), while 58.4% of the 775 auctions held this time last year were successful.
Adelaide has continued to stand out with the strongest clearance rate. The preliminary results came in close to 80% (78.8%), with the finalised results consistently holding around the mid-to-high 70% range in Adelaide. Despite recording a -11.8 % decline week-on-week, Adelaide was also the busiest among the smaller auction capitals last week, with 157 homes auctioned.
Brisbane recorded the strongest preliminary clearance rate in five weeks, with 71.2% of the 155 homes auctioned reporting a successful result, while auction conditions in Canberra (129) remained sluggish at 56.8%. Across Perth, just seven of the 16 homes auctioned last week returned positive results, while the one result collected across Tasmania was unsuccessful.
Thank you for your ongoing support!
