Agitated about gas prices, worried about inflation and is the cost of living getting to you? Let us, here at Nucleus Wealth, take one off of your plate as we analyze the Australian Property Market situation to give you a heads-up.
Join us in this investment podcast as Nucleus Wealth Chief Investment Officer, Damien Klassen, and Senior Financial Adviser, Samuel Kerr, give their expert take on this topic.
● Delayed direct impact of rate rises. Typically rate rises take 3 months before affecting cash flow for a borrower. i.e. only 0.25% of the soon-to-be 2.35% increase has actually been felt by borrowers.
● Delayed effect due to greater than usual concentration of fixed-rate mortgages. Over the past few years, fixed mortgages went from 10-15% of lending to over 40%.
● Delayed indirect impact of rate rises. From the 3 months, for borrowers to actually notice, it takes another 3-6 months for the reduction in spending to affect business that rely on consumer demand
● Delayed 2nd order and above. The economic multiplier compounds the effect for months going forward. Typical estimates suggest 1-2 years for changes in monetary policy to have its full effect.
Nucleus Wealth is an Australian Investment & Superannuation fund that can help you reach your financial goals through transparent, low-cost, ethically tailored portfolios. To find out more head to https://nucleuswealth.com/
The information on this podcast contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Damien Klassen is an authorised representative of Nucleus Wealth Management. Nucleus Wealth is a business name of Nucleus Wealth Management Pty Ltd (ABN 54 614 386 266 ) and is a Corporate Authorised Representative of Nucleus Advice Pty Ltd – AFSL 515796
00:00 – Intro
00:44 – Agenda
02:29 – Housing drivers – short-term (ASX 30 Day Interbank Cash Rate Futures Implied Yield Curve)
03:51 – Housing drivers – short-term (Change in Mortgage Payment over 1 year)
05:06 – Housing drivers – short-term (Flowchart 1)
06:45 – Housing drivers – short-term (Australia: fixed versus variable home lending)
15:31 – How the economic machine works
16:30 – Housing drivers – short-term (Effect on Sydney / Melbourne House Prices)
19:45 – Housing market valuation – long term
22:17 – Housing market – stock vs flow
25:46 – Latest Stats (Property Valuation Ratios)
29:53 – Latest Stats (3-month Change in Valuation Ratios)
30:45 – Latest Stats (Current vs Historical Values)
33:27 – Macro background (Mortgage Rate)
33:58 – Macro background (Wage Growth)
36:12 – Specific Markets (Sydney House: Affordability Measures)
42:44 – Specific Markets (Brisbane House: Affordability Measures)
44:23 – Specific Markets (Adelaide House: Affordability Measures)
45:08 – Effect of Rising Interest Rates (Property Calculator)
59:32 – Will rising interest rates pop house prices, or just slowly deflate them?
59:53 – Investment Implications
01:03:11 – Property Report