What A Difference A Month Can Make…

Last month when I prepared this monthly report, I finished on a rosy note for investors, when I raised the fact thatinterest-rates-dec-5-breakotu the interest rate outlook from the Reserve Bank’s perspective looked positive.

Research was indicating that the RBA may cut rates again in 2016 – and this may still be the case.

But of course, any rate cut that does come through is not going to have the huge impact on our bank balances that we were hoping for. The banks have made sure of that!

I’m referring to the interest rate hikes that were announced this month, first by Westpac, quickly followed by a number of other banks and lenders.

The rash of rate decisions has also got people pondering whether the impact will usher in end of the property boom.

As the heat comes out of Sydney’s property market, investor dollars will soon ‘march across the Nullarbor’ to invest in downtrodden Perth, a leading property forecaster says. I’m not so sure that Perth is where I’d want to park my money at present! What are your thoughts?

Regardless, all of this recent rate activity has many people wondering whether it will prompt the RBA to cut the cash rate as soon as Melbourne Cup Day. The minutes of the central bank’s October rate decision didn’t indicate any intention to cut, but this was before the banks starting slugging mortgage holders with higher rates…

I’ll say it again: how things can change in the space of a month!

Other than these interest rate announcements and their possible impacts, what else has been happening in Australian property and financial markets throughout October?

There has been a lot of chatter about Chinese investment in our property market, which is why this article is so interesting for those who want some insights into why Chinese buyers are snapping up so much Australian housing stock?

Foreign buyers are not the only ones who are loving everything the Australia real estate has to offer! Australian buyers are back on the investing wagon, with homebuyer confidence reaching a post-GFC high.

Meanwhile, one bank accidentally revealed the locations across Australia they consider the riskiest. From a lender’s perspective, these locations will attract the tightest lending restrictions, with capping loans at 70 to 80 per cent of the borrowed amount. Are you investing in one of Australia’s riskiest postcodes?

New research from CoreLogic RP Data shows that rental returns for houses are down 0.8% across the country, while capital city land prices are on the up. And, the most favourable markets for buyers and sellers in Australia have been revealed: see more here.

Finally, now that our new Prime Minister is now settled into his role, RealEstate.com.au has put together this thoughtful Q&A that asks: What does the Turnbull Government mean for property?

As well as covering all of these trends, forecasts and data releases, throughout the month we’ve also shared some tips and advice for existing landlords, such as ways to maximise returns from renovating, the 5 most successful renovation secrets of the property pros and some strategies for retaining tenants in a hot property market.

We also touched on some issues for investors to consider regarding the best structure to hold your loans, and talked about the fact that high home loan deposits look like they may be here to stay.

It’s been a very busy month and if it’s any indication of what’s to come, the summer season is set to be an interesting ride for investors. As always remember that due diligence is your ultimate weapon in tumultuous times. And keep an eye out for some rate relief come Melbourne Cup Day; you’re almost more likely to have a win on your mortgage than you will on the horses!

Til next time, happy investing!

Helen Collier-Kogtevs

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