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[Podcast] What the economic downturn means for property | November 2022 Big Picture Podcast with Pete Wargent

[Podcast] What the economic downturn means for property | November 2022 Big Picture Podcast with Pete Wargent
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It’s been an interesting few weeks full of economic news, which has led to further uncertainty about the future of our economy and our property markets. Podcast Cover Part 71

If you’re a regular listener, you’d know that once a month, I catch up with leading economic commentator Pete Wargent for these Big Picture podcasts and we look at the macro factors affecting our economy and our property markets, and we’ve got a lot to discuss today.

If you asked me at the beginning of the year, I would not have thought that we’d be talking about inflation reaching 8%, interest rates at 30-year highs, or a war overseas that keeps raging on and floods back home creating havoc.

However, all these factors influence what’s happening to our economy and our property markets.

What’s Ahead for Property:

Boy, has there been a lot happening since I last spoke with Pete Wargent for our monthly Big Picture podcast.

In recent weeks we’ve had a Federal Budget, housing accord, promising 1 million new homes, rising inflation, and rising interest rate, and everyone who could get to meet is attention, throwing their hat into the ring, predicting what’s going to happen to property values.

Housing market passes “peak fear” phase

The fundamentals for housing and the economy are the strongest in years.

Asking prices held steady for both houses and units in October. Vendors are not dropping the prices of the properties they put on the market.

Inflation topped expectations

Australia’s inflation is heading toward 8%, according to Reserve Bank forecasts.

After the Reserve Bank of Australia lifted interest rates, Treasurer Jim Chalmers said inflation was "the number one challenge in our economy".

RBA and cash rates

  • The Reserve Bank (RBA) Board has lifted the cash rate by 25 basis points (a quarter of a per cent), taking the cash rate to a 9½-year high of 2.85 per cent. Rba3
  • The Reserve Bank Governor has indicated that the normal or neutral range for the cash rate is 2.5-3.5 per cent. The question now is, where do we go from here? At some point, the Reserve Bank needs to pause and assess the impact of the near decade-high cash rate on the broader economy – and inflation in particular.
  • The aim is to push inflation back to the 2-3 per cent target band while keeping the economy ticking along and holding on to the hard-won gains of the lower unemployment rate.

Fixed-rate mortgage cliff now looms large

Australia’s fixed rate mortgage reset is imminent and potentially about to get messy.

The fixed-rate mortgage cliff has been talked about as a potential issue for some time, but only now is it about to become a significant problem for the Australian economy.” Mortgage

The lending rules now in place leave many with few attractive options.

Links and Resources:

Metropole’s Strategic Property Plan – to help both beginning and experienced investors

Get a bundle of free reports and eBooks – www.PodcastBonus.com.au

Pete Wargent’s new Podcast

Pete Wargent’s blog

“Consumer confidence is very low because of the continual negative messages of the media, but retail spending is very high.” – Michael Yardney

“We just are going to get a much faster population growth than has been projected for a while.” –Michael Yardney

“If you’re a pessimist, you’re literally sabotaging your life.” – Michael Yardney


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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.

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