It’s been another big week of news with another interest rate rise, the impact on household budgets and specifically the residential property market. I’ve noticed it’s also been a big week for adjectives! There has been as much hype around this rate rise as we’ve seen for Australia’s gold medal count at the Commonwealth Games. Is it valid?
Well, certainly the excitement around all the amazing personal and team achievements at the Commonwealth Games is absolutely valid. The hyperbole surrounding the interest rate rise I think is a bit more questionable. It certainly isn’t helpful.
By no means am I trying to downplay the potential impact of the cost of borrowing money on homeowners and households. My aim in this blog is always to tell it like it is rather than try to tell readers only what they want to hear, or even what I would ideally like to be true.
So yes, the truth is that the market is easing and is likely to continue to slow over coming months. Potential buyers are reworking their numbers, redoing their budgets, and reconsidering their priorities. Those are natural and sensible steps to take.
But buyers are still there. People are still looking to downsize, upsize, or move to somewhere different to be closer to family, work, and friends. People may be looking to sell to ease financial stress but that doesn’t mean they are withdrawing from the market completely.
The market is changing, but it is still going. It is certainly more challenging, but I want to again stress the importance of recognising the context of the changes we’re experiencing.
Remember values increased 28.6% during the pandemic. I’m always cautious to use unnecessary adjectives, but I do think that has accurately been called a ‘surge in growth’. We are seeing a slowdown in activity, but it was entirely unrealistic to believe that level of demand and activity to continue for a sustained length of time.
That’s why, even before the announcement of interest rate rises, our team were cautioning clients to be mindful of a potential turnaround in market conditions. Our aim is to ensure clients make the right decisions today that will continue to deliver the right outcomes for them over the years to come. That has meant ensuring potential buyers understand double-digit annual growth rates are never guaranteed, but that doesn’t mean there is no value to be achieved.
We are here to present the facts without the adjectives.