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Investment Industry Insider (November 6th)

By November 4, 2020 November 5th, 2020 No Comments

Jason's Update on RBA Interest Rate Cuts

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Jason Round

Jason’s Update on RBA Interest Rate Cuts

As you may know, as of last Tuesday the 3rd of November, The Reserve Bank of Australia has cut interest rates to 0.1%.

This is a historic low.

I want to explain what this means for you, the investor.

There are both upsides and downsides.

The cut is an indication that the economy has been a little bit sluggish. And if you have cash sitting in the bank, you’re not getting a great return on it.

However, this cut dramatically improves your borrowing capacity. If the cost of borrowing is lower, your borrowing capacity increases, which may give you the ability to invest in some better locations.

On top of that, you may experience better cash flows – when interest rates come down, those with a negative cash flow may find they are actually neutrally geared.

For people looking to enter the market, the low interest rates mean it is easier to purchase property sooner.

You can read the official report from the RBA here.

Learn how your borrowing capacity may have improved with our free loan calculator – click below.

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To learn how you can take advantage of these interest rate cuts, request a tailored 1:1 consultation with a Senior Property Coach. They will look at your specific circumstances and determine the most financially prudent course of action.



Contract signing

Strong mortgage growth bullish for property prices

Yesterday’s mortgage finance data from the Australian Bureau of Statistics (ABS) was unambiguously strong, driven by owner-occupiers: Total new mortgage commitments (excluding refinancings) rose by 25.5% year-on-year in September, driven by a whopping 33.8% growth in owner-occupier mortgage commitments versus 4.2% growth in investor commitments. As regular readers know, mortgage growth is one of the best indicators for property price growth having displayed a very strong historical correlation.

Full Article Here.

Broken Hill

Where regional Australian house prices moved the most

Prices in some areas of regional Australia have shot up by nearly a third, the latest house price data, shows as a result of COVID-19 luring people away from the cities back to the country.

“I’ve never seen anything like this in 48 years in real estate; it’s absolutely crazy,” said agent John Lawson, of Southern Grampians Livestock and Real Estate, in Victoria’s south-west. “It’s just unprecedented.”

Full Article Here.

Sold sign

Aussie property to remain resilient in 2021: expert

According to Custodian’s managing director, James Fitzgerald, the property market had so far withstood the pandemic’s disruption to the broader economy.

“History shows us that the Australian property market is generally not affected by rising unemployment rates. Listings are down by about 20 per cent at the moment and inquiry levels are up, expats are returning to live in Australia, and there is an undersupply of new properties coming to the market.”

Full Article Here.

House under construction

National property boom to be turbo-charged by infrastructure-led economic recovery: Hotspotting’s Terry Ryder

The latest price data from Domain shows a strong performance by house prices right across Australia. I’m predicting a national property boom in Australia in the near future and the Domain figures confirm that the strong up-cycle is already under way in many parts of the nation.

These figures show that every capital city had growth in their median house prices in the September Quarter – except Melbourne where there was no change. These figures are similar to recent data from other notable sources, including SQM Research and CoreLogic.

Full Article Here.

Aus neighbourhood

CoreLogic property value index finds ‘remarkable’ rise in house prices for October

House prices across Australia have risen overall for the first time since the start of COVID-19.

Monthly data from CoreLogic shows that, as a collective average, the housing market experienced a 0.4 per cent rise in October.

It follows month-on-month average declines since the pandemic started shaking the nation’s economy.

“The numbers out today are quite remarkable,” CoreLogic head of research Eliza Owen said.

Full Article Here.


A perfect storm is brewing in Australian property

What’s ahead for our property markets?

Well, it’s hard to make predictions, especially about the future.

And it’s even harder to predict the endpoint of a moving target.

Yet there is a palpable change in property sentiment happening and a number of ‘game changers’ have altered my view on what’s ahead for property in 2021 and 2022.

Earlier this year there were a number of dire predictions suggesting property values would plummet. But now, most of the pessimists have changed their minds and backtracked on their forecasts.

Australia survived the coronavirus better than many countries and, despite a recession, rising unemployment, and Melbourne’s severe prolonged lockdowns, the property markets have remained resilient.

Full Article Here.

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