• Posted on : 12 Aug 2019

Welcome to this month’s edition of the Dot Monthly!

It’s that time again! When you receive your monthly dose of what is taking place in this ever-changing environment.

Let’s get into this month’s topics:

Prices Rise For Second Month In A Row

Five of the eight capital cities recorded increases in property values over July, according to CoreLogic’s home value index. Values rose 0.2% in Sydney, Melbourne and Brisbane, 0.3% in Hobart and 0.4% in Darwin. The modest increase in property values are signs of renewed confidence with the market stabilizing after an extended period of falls.

This was the second consecutive month with small rises in Sydney and Melbourne. Figures from SQM Research published this week show monthly rises in Sydney, Melbourne, Canberra and Darwin, with little change in Brisbane, Adelaide and Hobart.

“It’s not just about mortgage rates coming down and serviceability assessments being approved but we’ve also seen an improvement in confidence across the market,” says CoreLogic’s head of research Tim Lawless. “Another factor is that there’s not much stock out there in the marketplace, which means vendors are a little bit more empowered.”

With the Spring selling season only weeks away, vendors may see the healthiest market since the big city boom ended in 2017. REA Group chief economist Nerida Conisbee says spring should spell good news for sellers who are watching and waiting for the market to take off.

Borrowers Go Variable As Rates Fall

The RBA decided last week to keep the official cash rate on hold at 1.0%, which means it remains at its lowest level in Australian history. The RBA’s recent decisions (with cuts in June and July) have prompted plenty of movement in interest rates among the big lenders.

Some have passed on sizeable reductions in variable rates, while others have been slammed for not passing on the full rate cuts. Overall, interest rates remain low, there’s strong competition among lenders for borrowers and home values continue to be soft in most markets. In other words, now is a great time to buy.

Experts generally agree that November is the month the RBA board is most likely to make its next move on rates, as it waits for its two recent cuts to take hold along with government action to boost consumer spending. Meanwhile, lenders who are easing their loan serviceability terms continues to grow. Most have reduced their interest rate floors from above 7% to somewhere between 5.3% and 5.7%.


What has Dot been up to for the month?

Don’t forget to read up on the 15 year itch which is an E book I’ve authored to equip you with strategies to pay off your mortgage in under 15 years. The e book is available on the website or you can get in touch via email to request a complimentary copy.

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