June 20, 2022

#158: How interest rate cycles have impacted the property market since 1990 when the RBA first started targeting the cash rate and some pred

54 minutes

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Market update 1. Comparing the history of Australia's property market downturns and increases Pete shares a sneak peak of data that he has collated detailing the extent of Australia's three strongest years of property value growth and declines. Without giving too much away, prices are likely to drop, but there is no need to panic. 2. What are the capital growth drivers when interest rates increase? Cate shares her Sunday blog detailing the drivers of capital growth when interest rates are on the rise and predictions for the property market. Check out our show notes to read the blog! 3. NSW stamp duty abolition in limbo David shares news from NSW, where the State Government is looking to abolish stamp duty and transition to land tax. Plans will be announced in the State budget next week, however the Federal Treasurer has confirmed that there are unlikely to be any handouts for tax reform. Watch this space... Interest rate movements and property values 1. Do interest rate movements impact the property market? In this episode, the trio sink their teeth into data going back to 1990 to answer the question whether increases or decreases in interest rates have an impact on the property market. 2. Floating the Aussie dollar and targeting the cash rate David sets the scene with a brief history of why the Australian dollar was floated in 1983 and the benefits this brought to our economy. Seven years later in 1990, the RBA started targeting the cash rate of overnight loans between the banks, which has a powerful influence on other rates in our economy, ie: mortgages. 3. Cash rate cycles since 1990 Since the RBA began targeting the cash rate, Australian's have lived through five rate lowering cycles, four increasing cycles and we've just started rate increasing cycle five. What can be gleaned from history to inform the future? The trio unpack each cycle and most importantly, what happened to property values and the broader economy. 4. Property predictions Dave and Pete stick their neck out and make predictions for the property market: how low will values drop and how long will the current rate increasing cycle last? Visit the show notes - https://propertyplanning.com.au/how-interest-rate-cycles-have-impacted-the-property-market-since-1990-when-the-rba-first-started-targeting-the-cash-rate-and-some-predictions-on-what-will-happen-this-time-ep-158/

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