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A network chief executive and the managing director of a mortgage broking firm have espoused the belief that the RBA’s Christmas rate rise should not be looked at as a negative.
Instead, Stockdale & Leggo CEO Charlotte Pascoe said the decision by the Reserve Bank of Australia to lift the cash rate by 25 basis points in December instead spells opportunity.
From her perspective, people who are engaging with the real estate market right now are motivated — either because they see further change coming or because they want to upsize and know that further rate changes could have an impact on their decision making.
“There will always be people who need to sell, want to sell, and who want or need to buy,” she acknowledged.
“And, if you look at the values now compared to three years ago, we are still way ahead, so the market has corrected a little, but property owners are still up overall.”
She also sees now as “the perfect time” for investors to make their mark on the rental market.
“For people in a position to invest in property, it is a great opportunity,” she began.
Flagging the shortage of rental properties as a reason as to why, she has encouraged “anyone to look at getting a rental property because there is an opportunity, and you will get a renter to move in and pay a good rent”.
It’s a sentiment shared by Inovayt managing director Nick Reilly.
Mr Reilly, who runs a mortgage broking and specialist finance firm, doesn’t believe that the latest rate hikes have dented market confidence.
In fact, it even means people looking to upsize “may well be in the box seat” — thanks to the slight declines seen in the market.
“Initially, there was a real fear that buyer hunger would not be enough to get people to transact, but that hasn’t happen[ed],” he professed.
“We are still seeing a lot of pre-approval applications at the moment, particularly for those double-income families.”
From his perspective, people are still wanting to travel overseas, go to restaurants, and, perhaps most importantly for the property sector, looking to upsize their homes.
It’s a perspective with which Ms Pascoe agreed: “People are still having babies, so they are still needing extra bedrooms!”
“To people looking to upsize, I’d say now is a good time because I’m predicting further rate rises for the new year before it settles towards the end of 2023,” Mr Reilly stated.
He is of the opinion that for those who can afford to move, “high-end homes are levelling off, rates are still comparatively low, and the market is motivated” — making now the perfect time to act.
“Our key message to our clients is property is a long-term thing; understand what that looks like over the next 10 years,” he said.
His advice to would-be buyers?
“Don’t wait for the market to bottom out; get a handle on your own cash flow now and understand what may happen over the next 12 months and potentially upgrade,” he said.
The commentary follows a concession by a number of experts that the latest rate rise could wreak havoc on the financial situation of many Australians. Read more here: RBA’s recent decision making to ‘test housing market conditions in 2023’.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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