Will Rising Oil Prices Push Australian Interest Rates Higher? Property Market Outlook Explained
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It's the Real Estate Podcast, brought to you by ANZ Home Loans for financial well-beings. Hey, welcome back to the Real Estate Breakfast. As we rip into the Australian property market and pull it apart with our weekly conversations, talking to the biggest names in real estate right across Australia, looking at the analysis and the trends as well as the predictions. And if your property journey is has gone into overdrive this year, you might have one of those positive housing stories that you'd like to share with us. Well, I can tell you we would love to hear whatever that is. Our voice message is below. It's very simple. Just tap on that to start talking or you can send us an email. Our email address is myrealestatepodcast at gmail.com.
Well, it is a Friday.
What are the current trends in the Australian property market?
The end of the working week has arrived. It is March the 6th. And yesterday we had that interesting conversation with Mario Volpe in Dubai. A lot of Aussies are still in the UAE with that uncertainty around the Middle East. And talking about the war, I see that it was on this day back in 1960. The US announced that it would send 3,500 troops into Vietnam. That didn't end well, did it? And you might be feeling the stress of this current war crisis with some of the comments about what might result here in Australia with the fallout. The RBA Governor Michelle Bullock says that it's too early to know how the escalating conflict will impact Australia's economy. So far, the missile strikes involving Israel, Iran and the United States have disrupted oil.
And you've heard those shipments through the Strait of Hormuz pushing global oil prices higher. Economists are warning that petrol prices in Australia could rise by up to 40 cents a litre. And Bullock says the RBA had not ruled out an interest rate rise when it meets again. Just what you don't need to hear on a Friday. So let's take you right now to Melbourne and catch up with Richard Witton from Finder. And good morning to you, Richard. Welcome to the Real Estate Breakfast this morning. Yeah, as I say, the war creating this unease for mortgage holders facing potential rate increases off the back of this Iran crisis. That's right, Craig. Yes, it looks to be that this war is going to have a very big impact on inflation around the world.
And that is the one thing the RBA doesn't want. And if inflation goes up, we're going to see higher interest rates. There really is no way around it. Yeah, and I want to talk to you especially this morning about the hidden cost of the property boom. Australia's property boom has created huge wealth for homeowners, as we know, but there's this hidden cost that many people don't see coming. It is insurance. And as property values surge, you know, the cost of the insurance for those homeowners is climbing and it's climbing pretty fast. For many households, the annual insurance renewal is now becoming one of the biggest financial shocks to the household budget. And you guys sort of covered that in a recent piece.
Yes, it looks about 78% of Australians may have had their home insurance premiums increase quite significantly in the last 12 months. It's a really big factor that a lot of people don't consider when they think about the costs of owning property. We've seen property prices grow so much that I think a lot of people have become almost victims of our own success when it comes to these rising prices, because as prices go up, the value of the asset is higher and it's a much bigger cost for insurers to therefore cover those properties and replace them if something goes wrong. So we're seeing this big increase with the insurance premiums, which really does make the average person's costs go up a lot higher than they might expect.
Yeah, 78% of Australian households, as you say, have seen their home or content insurance increase in the past year. I mean, that is such a big figure. It's almost nearly 4.5 million households dealing with these higher premiums, adding another pressure alongside the rising mortgages. Let's talk about the increase, which isn't coming from just one factor.
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Chapters
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