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Aussie Real Estate Podcast

Fixed Rates Pain - RBA Prediction

09 Aug 2022

Transcription

Chapter 1: What is the main topic discussed in this episode?

2.596 - 26.679 Unknown

It's the Real Estate Podcast across every state, city and town of Australia. And welcome to another episode of the Real Estate Podcast available on iHeartRadio every morning, also on Spotify and Apple and wherever you get your podcasts from. It's a Wednesday morning, the 10th day of August for 2022. And coming up, Sally Tindall is here.

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We're going to be talking real estate that includes RBA predictions for September and what the rise might be this time round. We'll also talk fixed rates and a whole lot more. Olivia Newton-John, what a sad day yesterday was with her passing. I remember in the late 1990s, when working in radio, we took a bunch of winners to a Cliff Richard concert, can you imagine?

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And Olivia Newton-John, she was really the support act. But I remember her absolutely entertaining and rocking the joint out. Cliff Richard, you can forget about him, not so much at all. She sort of stole the show, and I'll always remember that. So rest in peace, Olivia Newton-John. Now, if you're celebrating your birthday today for the 10th of August, have a great Wednesday.

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You're sharing it with Antonio Banderas. He is turning 61. Riddick Bowe, the boxer, is turning 54. And Kylie Jenner, if you care about her birthday, she is turning 24. From first home buyers to property investors and everything in between. Every morning on The Real Estate Podcast. We are just as addicted to property as you are. Every weekday morning from 6.30.

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It's the main centre forecast with propertybuyer.com.au. Around Australia we go and checking on your weather. Firstly in Sydney expect a possible morning shower in 18 degrees. Melbourne some cloud hanging around but it should be a mainly dry Wednesday and expect a high of 17.

Chapter 2: What are the RBA predictions for the upcoming rate rise?

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Good morning, Brisbane. Expecting blue skies in 21 as you forecast high and in Perth, the possible morning shower and your top today of 17 degrees. It's the Real Estate Podcast across Australia, seven days a week.

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Well, there is always so much to talk about here every morning on The Real Estate Podcast, and we are certainly well past the highs of previous conversations around these record-breaking prices being paid and red-hot clearance rates and FOMO behaviour that was peaking into a frenzy. It is very much more at a sedate and tempered pace.

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So let's bring in Sally Tindall from Rate City, who doesn't travel at either of those speeds. Good morning, Sally. Great to have you back. Thanks for having me back. The UK looks pretty messy at the moment with their inflation running more than where we are at. They're talking about that recession knocking on the door by the end of the year. The US isn't looking great either.

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It makes you wonder whether or not Australia can avoid the same thing.

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195.376 - 218.384 Sally Tindall

I do think that we can look to overseas and get some clues about what might be ahead of us. However, we've got to remember that Australia does have a unique set of circumstances and challenges as well. And so it's not, you know... are set in stone that the UK will even go into recession. But certainly if they do, it doesn't mean that we will automatically follow suit.

218.904 - 239.862 Sally Tindall

One of the most interesting things to remember, particularly when you're looking at the US and New Zealand, we are more sensitive to rate hikes than some other economies. Why? Well, there's two reasons for that. One is that fewer of us are on fixed rate loans. And so we feel these rate hikes far more quickly than you do over in the US. We're fixing...

239.842 - 260.012 Sally Tindall

for 15 to 30 years is incredibly popular, or even over in New Zealand where the majority of borrowers are on fixed loans. At the moment, we estimate that there's around 38% of borrowers, home loan borrowers, are on fixed rate loans and the rest are on variable and feeling each rate hike as they roll in.

260.032 - 284.108 Sally Tindall

The second reason would be that we are, in some cases, some of us who bought recently, potentially with small deposits, took on large loans compared to our incomes, we're up to our eyeballs in debt. So that could mean that we need fewer rate hikes to get the inflation problem in hand. The RBA has alluded to this in what they've said in speeches and things like that.

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And yeah, talking of the RBA, in particular the Governor, some think it's time for somebody new. It's a bit like, I guess, an Australian cricket captain who has come up against a better team, but they decide to change the captain anyway. So I guess, do you think this would be a confidence boost to the market or a different mindset if Philip Lowe was politely asked to move along?

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