Local News
Effect of Rising Interest Rates on Australia’s Property Market Recovery
Effect of Rising Interest Rates on Australia’s Property Market Recovery
The recent interest rate hike, coupled with the potential for another increase in the near future, has raised concerns about the impact on Australia’s property market. While experts acknowledge that these rate hikes will slow down the property market’s rebound, they do not anticipate a complete halt to further price increases.
The decision for interest rate hike of the cash rate to 4.35% on Tuesday has been challenging for homeowners who have already witnessed a significant rise in mortgage repayments over the past 18 months. This move was largely expected due to higher-than-expected inflation in the September quarter, compelling the Reserve Bank of Australia (RBA) to act in order to bring inflation back within its 2-3% target range.
RBA Governor Michele Bullock’s recent statements had indicated the bank’s low tolerance for allowing persistently high inflation, emphasising the need to address the issue promptly. Despite concerns about the impact of higher interest rates on homebuyers’ borrowing capacities, economists believe that several other powerful factors continue to drive the surge in home prices across Australia’s capital cities.
Economist Eleanor Creagh from PropTrack points to factors such as record levels of net overseas migration, limited housing supply, and a construction slowdown. These factors, combined with interest rate hikes, have not been enough to deter the gains in home prices. She believes that while the latest rate increase may slow down the pace of home price growth, it is unlikely to prevent further increases. Strong population growth, tight rental markets, and a housing shortage are contributing to rising prices.
The PropTrack Home Price Index reveals that home prices have already risen by 4.93% this year, and NAB predicts a further 5% increase next year, even with expectations of another rate hike in February. NAB’s chief economist, Alan Oster, believes that the RBA may consider further rate adjustments to address inflation risks.
While there are signs that price growth is slowing, indicated by an increase in listings and auction volumes, economists like Mr. Oster expect that prices will not rise as rapidly in 2024 as they did this year. He believes that softening price growth is a result of the increased supply and may continue.
Shane Oliver, the chief economist at AMP Capital, highlights the impact of the latest interest rate hike, which is expected to reduce borrowing capacities by about 2%. He also notes that the risk of another rate hike could keep buyer demand subdued, further slowing price growth. However, this slowing trend in price growth can benefit buyers, particularly in a market where prices have reached record highs in cities like Sydney, Brisbane, Perth, and Adelaide.
While some experts anticipate another rate hike in December, many believe a February rate hike is more likely as it will allow the RBA to review the next round of quarterly inflation data. Luci Ellis, former RBA assistant governor and Westpac chief economist, emphasizes that the RBA will closely monitor data, including inflation, unemployment, and economic conditions, before deciding on further rate adjustments.
However, CBA and NAB have differing expectations on the timing of a rate cut, with CBA expecting one in September next year and NAB predicting a cut in November. The consensus is that the RBA will continue to assess data and respond as necessary to maintain economic stability.
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City landmark falls to start $29.5 mil project
By Tim Howard
A Grafton landmark has disappeared in the past week, but it’s proof that a much awaited facility is on target for a December 2024 opening.
The Grafton Memorial Pool waterslide which dominated the landscaping of the pool grounds for decades has come down and heavy machinery has begun tearing up the pool structures and surrounding ground to begin stage one of the $29.5 million project
The head contractor, Bathurst firm Hines Constructions Pty Ltd, has promised Clarence Valley Council it will complete stage 1 of the project, known as the Regional Aquatic Centre, by December 2024.
The first stage will include the indoor facility, which includes two 25 metre pools.
The 50m outdoor pool will be part of Stage 2 of the project
The start of construction will rule out any use of the Grafton Pool site over the summer.
Heavy machiney at work beginning to demolish the pools as part of stage 1 of the Regional Aquatic Project.
In 2022-23, despite the closure of the pool, the water slide was opened at selected times.
The pool has a close connection to the Grafton community
It’s origins go back to December 11, 1943, when 13 Cub Scouts drowned in the Clarence River returning from a picnic on Susan Island.
Findings from the tragedy revealed most of the boys had not learned to swim and the community resolved to raise funds to build a pool so children could learn to swim at an early age.
The name Grafton Memorial Pool was a reference to the boys that died on that day almost 80 years ago.
After fundraising, construction of the pool began in 1954 and it opened in 1956, the year of the Melbourne Olympics.
In the pool’s first year of operation it was visited by a touring squad of Olympic swimmers which included Sport Australia Hall of Famer, Jon Henricks.
During the visit Henricks competed in the 50m freestyle at a club event which he won in 25.60 seconds before going on to Melbourne to become Australia’s first ever Olympic 100m freestyle champion and set a new world record.
Bathurst builder Hines Constructions won the contract for the $29.5 million build of the Regional Aquatic Facility.
Henricks’ record, which stood for 60 years as the fastest 50m in the Grafton Olympic Pool, was beaten in 2016 by local swimmer Charlie Steele in a time of 25.11 seconds.
Over the years the addition of the waterslide and diving pool turned the facility into a regional attraction which brought visitors to the city.
But the past decade revealed issues at the pool, which included a massive water leak.
It is believed the water escaping from the pool into the ground around it has created a sinkhole responsible for the structural instability which forced the council to close the pool ahead of the 2022-23 swimming season.
The council had developed a shovel-ready plan for the Regional Aquatic Centre, which has been used for the current project.
Future stages will include the 50m outdoor pool and two waterslide.
For more local Grafton news, click here.
Fire fighters save neighbouring buildings
By Tim Howard
Fire fighters attending a fire which gutted a medical imaging clinic in Maclean were able to stop the fire spreading to neighbouring buildings.
About 8am last Thursday a fire broke out at the premises of Clarence Valley Imaging in River St, Maclean.
The building, between the Maclean Ambulance Station and Clarence Valley Council building was alight by the time fire fighters began to arrive.
Firefighters battle a blaze which gutted the Clarence Valley Imaging building in River St, Maclean, on Thursday morning.
Firefighters were able to contain the fire to the Clarence Valley Imaging building which was totally destroyed.
Fire and Rescue Maclean were the first crew on the scene, along with NSW Ambulance, located next door.
Maclean SES took on traffic control and crews from Fire and Rescue Yamba, Grafton and South Grafton plus Rural Fire Service crews and Yamba SES were called in to assist.
River St between Taloumbi St and Wharf St was closed while crews worked on the blaze.
Neighbouring businesses and houses were evacuated as a precaution, but crews were able to contain the blaze to the medical imaging building.
The cause of the fire is unknown, but investigators will comb the fire site for clues to the source of the blaze.
Water sprays onto what’s left of the Clarence Valley Imaging building in River St, which a destroyed by fire on Thursday.
Emergency service crews in attendance were:
- NSW RFS – Gulmarrad Brigade
- NSW RFS – Clarence Valley District
- Ashby Rural Fire Service
- NSW RFS – Wooloweyah
- brooms head RFS
- Fire and Rescue NSW Station 372 Maclean
- Fire and Rescue NSW Station 510 Yamba
- Fire and Rescue NSW Station 306 Grafton
- Fire and Rescue NSW South Grafton 307
- NSW SES Maclean Unit
- NSW SES Yamba Unit
For more Yamba news, click here.
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