Connect with us
Byron Bay News and Weather copy
Mt Warning News and Weather copy
Kyogle News
Grafton News and Events copy
Byron Bay News and Weather copy
Mt Warning News and Weather copy
Kyogle News
Grafton News and Events copy
previous arrow
next arrow

Real Estate

What does the latest RBA cash rate rise means for property prices, inflation and the risk of tipping into a recession? RMIT expert available for comment. – RMIT

Published

on

By

NSW-Northern-Rivers-Breaking-News

What does the latest RBA cash rate rise means for property prices, inflation and the risk of tipping into a recession? RMIT expert available for comment. – RMIT

An expert from RMIT is available to comment on the latest RBA cash rate rise and what it will mean for Australia’s housing market and the economy more broadly.

Dr Woon Weng Wong, Lecturer, School of Property Construction and Project Management, RMIT University 

woon-weng.wong@rmit.edu.au

Topics: Economics, Econometrics, Finance, Property, Quantitative analysis, Statistics

“The rising cash rate will undoubtedly have a negative impact on the residential property market. However, we are only just beginning to see the first signs of a gradual cooling off.

“Looking at our most basic measures like median house prices, the month of June recorded a 0.35% drop from the previous month across all capital cities. Melbourne experienced the greatest decline with a 0.66 percent drop. This is reflected in the auction clearance rates which was 55 percent in the week ending July 4, which is a considerable reduction compared to 74 percent during the same time last year.

“But if we look at the bigger picture, the property market is still running hot with national prices approximately 7.76 percent higher in June compared to the same time last year, with Sydney and Melbourne trailing at 5.41 percent and 3.85 percent respectively.

“And if we go even further back, comparing current prices to the start of the pandemic (circa January 2020), the national median is approximately 35 percent higher with Sydney and Melbourne at 37 percent and 22.5 percent respectively. What this means is that property markets are showing signs of a slowdown but these are relatively minor compared to the substantial gains experienced over the past couple of years.

“Further cash rate rises are expected for the remainder of the year as the RBA aggressively targets inflation, which does not appear to be abating anytime soon with the conflict in Eastern Europe, the energy crisis, labour shortages and recent extreme weather events continuing to wreak havoc on the Australian economy.

“However, the consensus seems to be that further rate rises may be less onerous with the target cash rate anticipated to be 2.1 percent by the year’s end. The current cash rate is 1.35 percent, so that only leaves 0.75 percent on the table over the next 6 months. The cash rate is expected to eventually settle at 2.5 percent by the middle of next year. House prices will likely continue their downward trajectory with modelling by the RBA’s latest financial stability review indicating a 15-20 percent decline over a two-year window based on the assumption of a 200 basis point rate rise.

“The only scenarios in which the RBA might reconsider its hawkish position are inflation being brought under control sooner than anticipated; or a recession develops. The inflation question does not have a simple answer requiring everything from supply chains being fixed to easing consumer demand and a moderating rental market.

“Even if these issues could be resolved, the ongoing conflict in Eastern Europe remains the proverbial elephant in the room. Since the conflict began, crude oil prices (WTI) have risen from approximately USD78 per barrel in January 2022 to its current level of USD110 per barrel. Furthermore, the gas crisis continues to plague Western Europe as the German led exodus scrambles to secure alternative sources in preparation for winter in the northern hemisphere. When and how hostilities will end remains unclear.

“On the recession front, if the situation in Eastern Europe is the proverbial elephant, then a recession is the proverbial whale. The risk of a recession is real but may be avoided so long as economic fundamentals remain strong.

“According to the latest ABS data, the unemployment rate remained at a record low of 3.9 percent in the month of May. This is in stark contrast to the 1991-92 recession ‘we had to have’ in which unemployment rates hovered around 8-10 percent. In a recent UBS panel discussion in Zurich, RBA Governor Phillip Lowe stated there was a “narrow path” for inflation to come down without tipping the economy into recession.”

 

Advertisements
Tenterfield-The Bowlo
Continue Reading

Breaking News

Sydney and Melbourne House Prices Set to Fall in 2025, While Perth Soars

Published

on

By

Sydney House Prices 2025

Sydney and Melbourne House Prices Set to Fall in 2025, While Perth Soars

 

By Ian Rogers

Australia’s property market is poised for a dynamic shift in 2025, with house prices in Sydney and Melbourne expected to slide, while Perth leads the nation in value growth, according to SQM Research’s latest Boom and Bust Report.

The report projects national housing prices to rise between 1 and 4 percent under its base case scenario. This outlook hinges on mid-year interest rate cuts, continued population growth exceeding 500,000 people, and inflation remaining under control. Globally, the forecast also factors in a potential resolution to the war in Ukraine and easing tensions in the Middle East.

Under these conditions, Perth is forecast to outpace other capitals in price growth, while Sydney and Melbourne could see declines of up to 5 percent.

A Market Shaped by Population and Supply Shortages

Louis Christopher, Managing Director of SQM Research, points to strong population growth and a continued shortage of new dwellings as key factors shaping the market in 2025.

“We are not anticipating much of a change in these current trends,” Christopher said, emphasising the continued housing supply strain that has contributed to price surges in certain markets.

The report lays out four potential scenarios based on varying economic conditions and government policies, painting a picture of both opportunity and risk for homebuyers and investors alike.

CoreLogic’s Head of Research, Eliza Owen, noted that buyer demand is unlikely to surge in early 2025.

“Melbourne, Hobart, Darwin, and Canberra have all been in decline recently, a trend that may persist,” she explained. “Sydney could also slip into a mild downturn due to affordability constraints and limited borrowing capacity amid high-interest-rate settings.”

While growth in Perth and Brisbane has begun to slow, the market remains resilient. Adelaide, which has seen steady gains, could also experience some cooling in momentum. However, if household finances improve in the latter half of 2025, demand could pick up— especially in Melbourne and Hobart, where property values have already taken a significant hit.

Where Prices Are Headed in 2025

According to economist Marcel Thieliant from Capital Economics, house prices are likely to rise by 5 percent by December 2025 compared to the previous year.

“Our leading index for house prices still signals solid growth in the months ahead, aided by potential rate cuts,” Thieliant said. However, he cautioned that with affordability at its worst levels since the early 1990s, any price increases are expected to be moderate.

The Interest Rate Effect

Interest rates remain the critical wildcard in the 2025 housing market equation. Christopher anticipates that the Reserve Bank of Australia (RBA) will lower rates by 0.25 to 0.5 percentage points by mid-year as inflation eases and economic growth remains sluggish.

If rate cuts materialize, SQM Research predicts an immediate boost in consumer sentiment, which could stabilize declining prices in Sydney and Melbourne.

Westpac and NAB expect the first RBA cut to come in May, while Commonwealth Bank and ANZ forecast an earlier move in February.

Westpac’s Chief Economist, Luci Ellis, believes the RBA may “front-load” its cuts, delivering consecutive reductions in late May and early July. However, she notes that the central bank’s decision-making will hinge on consistent evidence of declining inflation.

Boom or Bust? Possible Price Scenarios

The SQM report outlines a range of possible outcomes for 2025:

  • Best-case scenario: If rate cuts come earlier than May, house prices could surge, with Perth rising by up to 20 percent and Brisbane seeing gains of up to 16 percent.
  • Moderate scenario: If there are no rate cuts but population growth remains strong, Sydney, Melbourne, Hobart, and Canberra could see sharper declines, while Perth, Brisbane, Adelaide, and Darwin continue growing.
  • Worst-case scenario: If population growth slows below 400,000 and rate cuts do not materialize, Sydney and Melbourne could suffer deeper losses of up to 10 — albeit at a slower pace.

As for the political landscape, next year’s federal election is unlikely to have a short-term impact on house prices. However, an election campaign centered on housing and migration policies could set the stage for significant shifts in the years to follow.

For now, Australia’s property market stands at a crossroads, with interest rates, population trends, and economic conditions shaping what could be a year of stark contrasts between cities.

 

For more local news, click here.

Advertisements
Tenterfield-The Bowlo
Continue Reading

Breaking News

Rushed Planning Changes Risk Worsening NSW Housing Crisis

Published

on

By

NSW Housing Crisis

Rushed Planning Changes Risk Worsening NSW Housing Crisis

 

By Jeff Gibbs

The peak body for local government in NSW, Local Government NSW (LGNSW), has acknowledged the bipartisan efforts of the NSW Premier and Opposition Leader to tackle the state’s housing crisis but has issued a strong warning against rushed planning changes that could have unintended consequences.

Concerns Over Timing and Impact on Housing Supply

LGNSW President, Mayor Phyllis Miller OAM, stressed that while collaboration between all levels of government is critical, now is the wrong time to overhaul the planning system.

“Reviewing the planning system now is poor timing. It will create further uncertainty for all stakeholders and could stall housing construction even further, as developers may delay projects in anticipation of potentially more favourable outcomes under a future framework,” Mayor Miller said.

This concern highlights the risk that uncertainty in the development sector may lead to a slowdown in housing supply, further exacerbating the affordability and availability crisis gripping the state.

Infrastructure Contributions Must Be Protected

Mayor Miller also cautioned against any potential moves to scrap or defer essential infrastructure contributions, which fund critical community assets such as:

  • Roads and transport infrastructure
  • Green spaces and parks
  • Swimming pools and recreation facilities
  • Community services and local amenities

“Communities need housing and essential infrastructure to be delivered together. They should not be forced to subsidise the profits of developers,” Mayor Miller stated.

The private development sector’s concerns about regulatory and cost barriers are acknowledged, but LGNSW insists that funding solutions must be balanced and sustainable, ensuring that new developments come with the necessary infrastructure to support growing populations.

Local Government Must Have a Seat at the Table

LGNSW is also calling for greater inclusion of local government in discussions about planning reform, arguing that councils play an essential role in the housing solution.

“We know councils approve about 97% of all Development Applications (DAs), and local councils understand their communities better than anyone. We are at the forefront of local planning and are best placed to provide feedback on where real improvements can be made,” Mayor Miller said.

This statement reinforces the importance of local councils in balancing housing growth with liveability, ensuring that new developments are strategically located, well-planned, and supported by essential infrastructure.

Call for Ongoing Consultation and Collaboration

Mayor Miller confirmed that LGNSW has written to both the Government and the Opposition, urging collaborative engagement in shaping planning reforms.

“We are committed to working constructively with all levels of government, but planning reforms must be well thought out, consultative, and designed to deliver real solutions—not just fast-tracked for political convenience,” she said.

Key Takeaways

  • Poorly timed planning reforms could stall housing construction rather than accelerate it.
  • Scrapping infrastructure contributions could leave communities without essential services.
  • Local councils approve 97% of all DAs and must be included in the decision-making process.
  • LGNSW urges bipartisan collaboration to ensure planning reforms deliver sustainable and community-focused solutions.

As the debate over NSW’s housing crisis continues, LGNSW remains committed to advocating for balanced, practical, and long-term solutions that address housing affordability while protecting community infrastructure and liveability.

 

For more local news, click here.

Advertisements
Tenterfield-The Bowlo
Continue Reading

Breaking News

China’s Property Crash: A Cautionary Tale for Australia’s Housing Market

Published

on

By

China's Property Crash Real Estate News

China’s Property Crash: A Cautionary Tale for Australia’s Housing Market

 

By Ian Rogers

China’s ongoing property collapse, led by giants like Evergrande, has caused staggering economic losses, with implications that should resonate loudly in Australia. As one of our largest trading partners, China’s struggles are a stark warning about the fragility of real estate markets and the broader economy.

The Scale of China’s Crisis

The fallout from China’s property downturn is immense. A Barclays Bank report estimates the total wealth destruction at $US18 trillion ($AU29 trillion), or approximately $US60,000 per Chinese household. This loss surpasses the US property crash of 2008 that triggered the global financial crisis. With 80 million vacant homes — seven times the total number of Australian dwellings — and declining property prices, the situation remains grim.

Harvard economist Kenneth Rogoff and IMF co-author Yuanchen Yang highlight that China’s overbuilding spree has created a massive oversupply of homes and infrastructure. Construction accounted for 31% of China’s GDP in 2021, a precarious level seen before the property collapses in Spain and Ireland.

With a declining working-age population and soaring home price-to-income ratios in cities like Beijing and Shanghai, China’s real estate market faces a bleak outlook. The ripple effects include a weakened construction sector, falling economic output, and reduced demand for raw materials, including Australian iron ore and coal.

Implications for Australia

China’s property woes directly impact Australia’s economy. Slumping iron ore prices, now below $US100 per tonne, are reducing national income and pushing the federal budget back into deficit. The Australian dollar has also dropped below 62 US cents, a level not seen since the early 2000s.

Economist Chris Richardson warns Australians to pay closer attention to China’s struggles. “China’s demographic shift is remarkable — it’s ageing fast, with birth rates plummeting due to unaffordable housing,” he notes, citing home-price-to-income ratios in Beijing and Shanghai that far exceed those of London or New York.

Parallels with Australia’s Market

While Australia’s property market differs in key respects, the similarities are striking. Like China, Australia has seen skyrocketing house prices, unaffordable deposits, and soaring household debt. Housing costs have contributed to declining birth rates, with prospective buyers increasingly reliant on family wealth to enter the market.

Unlike China, Australia faces a housing undersupply, driven by strong population growth through migration. However, as the COVID-19 pandemic showed, disruptions to migration can quickly shift the supply-demand balance.

A Potential Domino Effect

China’s property crash poses a broader risk to Australia. By reducing national income, economic growth, and federal revenue, it could create conditions ripe for a housing downturn here. With high household debt and limited government debt, Australia’s ability to respond to a housing crash may be constrained if external shocks arise.

Lessons to Learn

China’s real estate collapse is a warning: unchecked property markets, excessive debt, and demographic shifts can destabilise economies. For Australia, maintaining a balanced housing market and managing external dependencies are critical to avoiding a similar fate. While rising prices have defined Australia’s crisis, the conditions for a potential crash are present — and China’s experience underscores how quickly fortunes can change.

 

For more local news, click here.

Advertisements
Tenterfield-The Bowlo
Continue Reading

Breaking News

2025 Property Price Forecast: A Window of Opportunity for Buyers Amid Slowing Growth

Published

on

By

2025 Property Price Forecast

2025 Property Price Forecast: A Window of Opportunity for Buyers Amid Slowing Growth

 

By Ian Rogers

The housing market in 2025 is set to offer buyers a rare opportunity to enter before the next surge in property prices, as new forecasts point to a slowing in price growth across the nation.

According to the PropTrack Property Market Outlook, released today, national home prices are expected to rise modestly between 1% and 4%, a slower pace than the 5.5% growth recorded in 2024. Contributing factors include higher interest rates, increased housing stock, and affordability challenges.

Market Dynamics Favour Buyers

Cameron Kusher, director of economic research at PropTrack, explained the conditions behind the easing market:

“With the rate of price growth slowing and interest rates expected to remain higher for longer, combined with a greater number of properties for sale, 2025 will likely see weaker price growth compared to recent years.”

The surge in new listings throughout 2024, especially in Sydney and Melbourne, has pushed total listing volumes to decade highs. This increased supply is expected to reduce competition, giving buyers more choice and less urgency, which will help temper price pressures.

Capital City Forecasts

While property prices are not expected to decline significantly, the double-digit growth experienced in smaller capitals this year will likely subside:

  • Perth: Forecasted growth of 3–6% (down from 18.7% in 2024).
  • Adelaide: 3–6% growth (down from 14.6%).
  • Brisbane: 2–5% growth (down from 12.6%).
  • Sydney: 1–4% growth.
  • Darwin, Canberra, Hobart: 0–3% growth.
  • Melbourne: Between a 1% decline and a 2% increase.

Interest Rate Outlook Key to Market Movement

The slow growth forecast hinges on delayed interest rate cuts, which were continually pushed back throughout 2024. Most major banks, including Westpac, ANZ, and NAB, predict the first cuts in May 2025, while the Commonwealth Bank forecasts a potential February cut.

“If rate cuts occur later than expected, demand will remain subdued initially in 2025,” Mr. Kusher said. “But once rates start to fall and borrowing capacities increase, we anticipate a lift in demand.”

Federal Election and Buyer Sentiment

The federal election, anticipated before May, is expected to further dampen housing activity early in the year. Historically, housing markets slow in the months leading up to elections, as buyers adopt a wait-and-see approach.

However, pent-up demand is likely to surge once rates fall, fuelled by buyers with substantial equity built during the market’s recent boom. Over the past five years, national dwelling prices have risen 47.9%, with Adelaide, Brisbane, and Perth leading gains of over 80%.

The Big Picture

While 2025 may not bring the explosive price growth of recent years, the market remains resilient. Slower growth and higher stock levels present a strategic opportunity for buyers ready to act before conditions shift again.

As affordability constraints ease and rate cuts reinvigorate demand, the window for favourable buying conditions may close quickly, making early 2025 a crucial time for market entrants.

 

For more local news, click here.

Advertisements
Tenterfield-The Bowlo
Continue Reading

Ballina News

“Australian lightweight champion from lil ol’ Swan Bay”

Published

on

By

Sunny McLean with his coach, Scott Smith. Boxing Northern Rivers News

“Australian lightweight champion from lil ol’ Swan Bay”

 

By Samantha Elley

Maddog boxing’s Sunny McLean has been going from strength to strength this past year, grabbing titles from each of the events he has been fighting in.

Sunny McLean and his coach, Scott Smith, who runs Maddox Boxing, were recently picked to represent Queensland as the fighter and coach team to compete in the national titles in Gosford.

Sunny won all his elimination bouts and beat the NSW champion in the gold medal fight, to become the newly crowned Australian champion in the lightweight division.

They were surprised with a visit from Jason and Andrew Moloney, world champion professional boxers.

“Every state in Australia was there with all the best fighters and the (Moloney brothers) came to support us, so we felt so special,” said Scott.

“They came to help me prepare Sunny for his last two fights in this event.”

Sunny was competing for Queensland as he already holds the title of QLD/NSW interstate champion.

“His first opponent, the referee stopped the fight in the 3rd round,” said Scott.

“His second opponent was the favourite from Tasmania and Sunny won that fight to go through for the gold medal against the NSW champion.

“Andy (co-trainer) and I worked out a plan to beat him and Sunny did exactly what he was asked and never last control of the situation.

“He is now the Australian lightweight champion from lil ol Swan Bay.”

 

For more local news, click here.

Advertisements
Tenterfield-The Bowlo
Continue Reading

NRTimes Online

Advertisement

National News Australia

Facebook

Latest News

Verified by MonsterInsights