As always, the following in no way constitutes financial advice and no warranty is offered as to its accuracy or validity.  The reader is to make their own inquiries prior to making any decisions.

The market is well and truly recovering.  A couple of quick successive rate cuts while not completely passed on by all banks have definitely changed the news cycle and that has had a direct influence on buyer psychology. 

In all markets, we are seeing strong interest in entry-level homes and inspection numbers are consistent.  Investors are also showing up in a large way.  In the past 4 weeks, I have seen more investors than I have all year. 

On my blog, I have summarised the months reported sales for September for each of Wyndham’s Suburbs.  <Link here>

Looking ahead I am expecting more interest rate cuts as the RBA tries to compensate for global market activity.  In an address to the Armidale Business Group on the 24th September – Governor Philip Lowe reiterated the Board’s willingness to continue to follow global trends in reducing rates to boost inflation (increase prices)

“On the international front, as I discussed earlier, interest rates around the world are low and they are moving lower.”……….“We live in an interconnected world, which means that we cannot completely insulate ourselves from long-lasting shifts in global interest rates. Our floating exchange rate gives us a degree of monetary independence, but we can’t ignore structural shifts in global interest rates. If we did seek to ignore these shifts, our exchange rate would appreciate, which, in the current environment, would be unhelpful in terms of achieving both the inflation target and full employment.”

“At our Board meeting next week, we will again take stock of the evidence. (Interest rate were cut again) It is nevertheless likely that an extended period of low-interest rates will be required in Australia to make progress in reducing unemployment and achieving more assured progress towards the inflation target. The Board is prepared to ease monetary policy further if needed to support sustainable growth in the economy, make further progress towards full employment, and achieve the inflation target over time.”

An interesting inclusion by the RBA governor was mentioning the Swiss banks’ Negative interest rates.  Over 30% of the global government bonds are in negative interest rates.  That’s where you pay the Govt to hold your money in bonds.  A crazy world maybe but this is the world we live in and must make our decisions with that in mind. 

In Denmark, The Guardian Newspaper reported that the world’s first negative rate mortgage was launched.  Yes, the bank pays you now to borrow money:

“A Danish bank has launched the world’s first negative interest rate mortgage – handing out loans to homeowners where the charge is minus 0.5% a year. Negative interest rates effectively mean that a bank pays a borrower to take money off their hands, so they pay back less than they have been loaned.  Jyske Bank, Denmark’s third-largest, has begun offering borrowers a 10-year deal at -0.5%, while another Danish bank, Nordea, says it will begin offering 20-year fixed-rate deals at 0% and a 30-year mortgage at 0.5%. Under its negative mortgage, Jyske said borrowers will make a monthly repayment as usual – but the amount still outstanding will be reduced each month by more than the borrower has paid.

It is important to remember that while Wyndham is one of the fastest-growing markets in Australia, policy is made for the whole of Australia, so to stimulate markets that are quiet, warm markets will become much hotter and with the lowest supply to stock ratios 30 years, it may be a very, very quick increase.   

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Jonathon Bird

Licensed Estate Agent

0419 536 905