Kiki’s Monthly Market Update – May 2018
| As we close out May, the banking Royal Commission continues and banks appear to be exceptionally cautious as a result, with buyers finding it a challenge to get loans approved. This is contributing to us seeing properties selling for what we estimate to be anywhere from 5-10% on average below their peak, with some vendors not being prepared to ‘meet the market’ clinging on to prices from 3-6 months ago. In a changing market one of the most challenging things we have to deal with as agents is our client’s expectations, that we can assure you! What is interesting about this slowing market is that, unlike in the GFC when vendors were distressed selling driving down prices, this dip is primarily due to the restricted borrowing capacity of buyers – all of our vendors are selling for genuine life changes, so as much as buyers are hoping for bargain sales due to reasons of financial pressure and strain this is actually not the case.
Turning to the most recent economic information put out by the analysts, and the Federal Budget was announced this month without too much excitement or outrage. Small tax cuts are expected to help low to middle income earners from the second half of 2019 onwards and forecasts for a budget surplus were brought forward a year, however it is not expected to have any noticeable impact on interest rates or house prices. Elsewhere, the same commentary continues with low inflation and low wages growth unlikely to trigger a rise in the cash rate anytime soon despite a gradually improving economy. |
| This newsletter contains general information only as of 31st May 2018. Before making any decision or taking any action that may affect your finances, you should consult a qualified professional adviser. Kiki Bermudez or Mint360property shall not be responsible for any loss whatsoever sustained by any person who relies on the information in this newsletter. |
