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RBA Cash Rate November 2022: Rate Hike Again But When Will It Stop?

By in Podcast, RBA Announcement

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While the race that stops a nation will have the eyes of Australians everywhere today, another decision drawing just as much interest has been released.  

In the Reserve Bank of Australia’s (RBA) November release – which happens to coincide with Victoria’s Melbourne Cup Day – Ben breaks down our seventh consecutive rate hike from the data behind this decision to how can we, as consumers, can curb interest rates.  

And, of course, it’s not a monthly RBA update unless it’s jam-packed!  

We’ll hear Ben explain the headline changes (and 2 of his biggest disappointments) in Australia’s newly “reprioritised” Federal Budget, the darkening outlook on global growth, and his observations – and future forecasts — for our Property Market. 

Another gigantic episode that sees Australia continue to balance the tightrope between economic growth and inflation, tune in now!  

 

Plus Ben unpacks these key themes in this month’s economic update: 

  • Global growth outlook continues too sour  
  • The RBA is following through on its promise, because we continue to spend too much… 
  • Politics is a mugs game – there is just one problem – they control the economy 

Quick tip! If you’re keen to forecast your cashflows through this period, use the handy MoneySTRETCH feature on our free money management platform, Moorr. Click here to sign up or log in. 

 

Plus, Ben also includes his latest news and commentary on…

👉 The International Monetary Fund: “The worst is yet to come” 

👉 What we, as consumers, need to do to halt interest rates  

👉 The US hikes its rates, but why Australia won’t reach these levels… 

👉 China & Europe’s continued economic struggle 

👉 Australia’s inflation surges to highest annual pace in more than 32 years 

👉 Our “reprioritised” Federal Budget & it’s key changes  

👉 Why the new Government’s solution to Housing Affordability has a thumbs down from Ben 

👉 Has rising rates really stopped our spending?  

👉 Ben’s past month prediction, future forecasting, and how to avoid getting swept up in a fearful market sentiment.  

Plus much more! 

 

Additional free resources:

🔥 Episode 169 | Alan Oster – NAB’s Group Chief Economist – on Interest-Rate Rise, Tax Cut and The Future of Residential Property

🔥 Episode 389 | Interest Rate Rise: What this means for YOU! – Chat with Evan Lucas

🔥 Episode 390 | Will Interest Rates CRASH the Property Market?!

🔥 Episode 404 | What do Inflation, Interest Rates & Broccoli have to do with Property?!

 

And One Final Word…

If you’re worried about your finances or if you have no clarity on your cash flow position, we strongly recommend you to organise your finances now. It’s more important than ever to have a clear view, down to the exact cent, on how much you’re spending each month and how much surplus you’ve got. If you don’t know it, then log in to your Money SMARTS Platform here and update the numbers.

Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

DISCLAIMER: This podcast is general information only and is an opinion comment by Ben Kingsley. The information contained in this video is for Australian residents only. The information does not take into account the particular investment objectives or financial situation of any potential viewer. It does not constitute, and should not be relied on as, financial or investment advice or recommendations (expressed or implied) and it should not be used as an invitation to take up any investments or investment services. No investment decision or activity should be undertaken on the basis of this information without first seeking qualified and professional advice.

The Property Couch, its employees or contractors do not represent or guarantee that the information is accurate or free from errors or omissions and therefore provide no warranties or guarantees. The Property Couch disclaims any and all duty of care in relation to the information and liability for any reliance on investment decisions, claiming the use or guidance of this publication or information contained within it.

For more information, please visit: http://thepropertycouch.com.au

 

 

 

 

 

 

413 | The Future of Price Growth in Australia

By in Podcast, Q&A

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Passing on interest rates to tenants. Updating property plans. The future of price growth and…  

Restructuring your mortgage (is Line of Credit still the best?!)   

Yep.  Folks, we’re back with another ultra-packed Q&A session that’s all about being smart with your money in an unpredictable market.   

 Here’s a teaser of what else we cover… 

  • How can landlords offset these extra costs from rising interest rates?!  
  • The #1 biggest indicator that it’s time to update your property plan 
  • Why housing prices WON’T stagnant and housing prices will STILL grow – even given today’s market!  
  • The Veblen Effect: What it is and why it’s important in today’s market cycle!  
  • Where most of Australia’s growth actually came from (aka. A short history lesson)  
  • The Role of Income Growth, Immigration and Inheritance  
  • What are Quasi Lines of Credit?! (are they a good idea??)  
  • The markets Ben is (and isn’t) worried about in this market cycle, plus  
  • Tons more gold!!  

It’s another massive episode folks, give it a listen to get the facts and cut through the noise! 

 

Questions We Answer…

Question 1: Janet on When should you update your plan? 

Hi Ben and Bryce, 

My husband and I are big fans of the podcast. 

We have learned so much listening to the both of you over the years. 

We’ve actually been to your team Empower Wealth in North Melbourne for financial planning and property investment advice and that was before our honeymoon. 

Now we have 1 child (14 months old) and 2 properties in, one principal place of residence and 1 investment. This was all factored in by your team as part of our lifestyle by design plan. 

There is a component to the plan which is to get our 3rd property in a few years time as investment towards our retirement plan. 

However, with the changing market, I’m starting to wonder if its time to bring things forward or we stick to the plan. 

So my question is once you’ve got a property investment and a retirement plan set up, how often would you recommend getting this revised and looked into? 

I would love to hear from you two and keep up the good work on the podcast. 

 

Question 2: Adam on Can you pass on interest rate rises to tenants quickly? 

Hi Boys, 

Love the show and thanks for all the tips and all the advice that you provide each week. 

My wife and I have 3 investment properties and given the market is a bit softening at the moment and there’s a lot of uncertainty out there, we think it’s really good time to try to buy again. So we can get a loan at the moment our broker confirmed to us that we can borrow at the moment. 

However, when I run our numbers on next year in  about 12 months time, our 3 properties that we do have at the moment are currently on the fix rate and we fix them at about 2% interest and all 3 come off their fix periods in about 12 months time. 

So if we did buy again now by fourth place, when the loan repayments we’ve got on the other 3 next year did it at fixed period, that’s more than $2000 a month extra in mortgage repayment will be up for so we’ll be in trouble if we borrow again right now so we’re a bit in a snag. 

I’m just curious in your thoughts, I think you’ve mentioned before in your show that the Australian economy, I think is about, $40B in residential loans that fixed at the moment with low interest rates  in the last few years and they’re all gonna be coming off fixed periods next year. 

So there’s gonna be a lot of people, lots of household all of a sudden have to find material amounts of money each month in extra loan repayments. For those who are investors like us, we can just wanna try to pass on a lot of these costs to our tenants and raise the rents that they are paying given there already is rental crisis across the country.  How do you see this playing out in the economy. 

If you have a lot of landlords all of a sudden wanting to put the rents up substantially because interest rates have blown up and loan repayments are higher, do you think we’ll be able to recover some this cost through increasing the rents at all?
 

Question 3: Michael on Interest Rates, Borrowing Capacities and long term impact on price growth 

Good day Ben and Bryce. 

Hope you’re both well. 

Ben, condolences on the loss to Sydney, mate.  I know that’s probably a tough one. 

My question to you both is regarding to the overall pricing of housing and I know it’s broad question but with regards to the correlation between interest rates and the impact it have on borrowing capacity. 

I know there’s been peaks and troughs over the last 30 years but I’ve seen over time you know a gradual decrease on the amounts that we pay on the interest rates therefore our borrowing capacity increased. 

My question to you is that now that we’ve reached the bottom point where we’re on our way up, do you foresee that having a long term impact on the increase in housing value? 

I know there’s other factors in play but as far as borrowing capacity goes, I can see that there is quite a strong link in interest rates and the borrowing capacity. 

Just curious to get your thoughts on that and what’s the impact it will have. 

Thanks. 

 

Question 4: Karen on Borrowing Strategy – what is the optimal review? 

Hi Bryce and Ben, 

My name is Karen and I have a question about refinancing a principle place of residence and investment properties. We currently have a loan of credits on our principle place of residence.  

We used this loan of credit to purchase 3 investment properties and these 3 investment properties are all with different lenders. With the current interest rate rises and some of these loans coming off fixed interest, we are now wanting to refinance some of those. 

Our mortgage broker, this is my question for you, our mortgage broker is suggesting because of our age which we are 51 and 52 respectively, we have high disposable income because our children are all over 18 and that we combine all of our loan in to one big facility with AMP and have it split in to various splits and so our home loan on PNI and then the various investment properties as interest only. 

I’m really concerned with this approach because it goes against everything that I’ve listened to in your podcast today and I’m would just be really interested to hear what you have to say on the next approach. 

So basically the splits for the investment properties would be interest only and our principle place of residence P&I and she’s saying that this is the only way forward for us to be able to refinance the whole lot. 

Ideally, I’d like to keep the line of credit. 

I like the flexibility of it and I’d like to keep the investment properties with loans separate to our home. 

Free Stuff Mentioned… 

 

Want to work with Bryce & Ben’s Award-Winning Team? 

 

Here’s some of the gold we cover… 

  • 0:00 – What we’ve got in store for you… 
  • 1:18 – Folks, this is how you can get a free Start & Build Course! 
  • 2:53 – Negative things happen. Negative mindsets make it…. 
  • 5:19 – Question 1: When should you update your plan? 
  • 6:56 – How you can tell it’s time to change!  
  • 7:38 – And this is WHY you’d want to bring it forward!  
  • 9:20 – 97% of the time this what you’ll be doing…  
  • 11:21 – THIS is where they sit on our “7 Grades of Financial Wellbeing” scale (Don’t know what this is? Take the quiz here!)  
  • 12:46 – Question 2: Can you pass on interest rate rises to tenants quickly?  
  • 14:42 – We haven’t seen this for the last 3 years… 
  • 15:44 – When are we going to see the 3 big tranches?! 
  • 16:15 – Rents will be going up…  
  • 18:34 – How Adam can offset costs!  
  • 20:41 – Legislation that property owners should consider!  
  • 22:47 – THIS is a good rule of thumb for measuring costs and profit… 
  • 25:38 – Want to future forecast your modelling? Try Moorr, our online money management platform and it’s forecasting feature: MoneySTRETCH.  
  • 27:48 – Question 3: Interest Rates, Borrowing Capacities and long-term impact on price growth 
  • 28:57 – Most of this growth has to do with Australia’s lowering cost of M___!  
  • 29:40 – Income growth, affordability & interest rates  
  • 31:36 – Ben’s predictions for wage and population growth! (THIS will always push growth)  
  • 32:38 -These are the markets Ben’s worried about… 
  • 32:55 – The Role of Inheritance and Immigration 
  • 34:51 – Recap: What were the “Roaring 20s”?  
  • 35:17 – Why housing values WON’T stagnant! 
  • 36:14 – This is why price growth will continue! 
  • 38:40 – If you haven’t check out THIS amazing chart (bottom of page 1) from CoreLogic… 
  • 39:17 – The Veblen Effect 
  • 41:40 – Question 4: Borrowing Strategy – what is the optimal review? 
  • 44:21 – Who is AMP?  
  • 45:19 – Why you don’t really need a line of credit… 
  • 46:08 – Some other great options!  
  • 47:06 – What Ben does with HIS line of credit!!  
  • 47:23 – Why there’s still opportunity for older aged Australians… 
  • 49:51 – What is a Quasi Lines of Credit?!  
  • 50:34 – If you want more on How to Beat the Banks, check out Ben’s newest educational series here.  
  • 51:17 – Leave us a Question on our Speak Pipe – it’s never been more important!  
  • And… 
  • 51:50 – Did you know, the body of the Apple phone is actually pretty cool. Here’s why… 
  • 54:12 – The Top #10 Most Successful Celebrity Investors 
  • 57:22 – Honourable mentions for the women… 

 

412 | The Best & Worst Performing Markets Over 30 Years! – Chat With Tim Lawless

By in Podcast

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With a developing rental crisis, interest rates still rising and an economy unsure if it’ll be pulled into a recession…

It’s no surprise that there’s been A LOT of noise around what today’s data means for the future of Australia’s economy and property market.   

To slice through this noise (and bringing our guest streak to 3 weeks) we’ve brought in one of Australia’s biggest data-crunching experts and previous Property Couch guest… 

Please welcome back…

CoreLogic’s Research Division Founder, Tim Lawless!  

As Executive Research Director of CoreLogic, Tim heads up a team of analysts in Australia and New Zealand, reporting on property market conditions and the interplay between economic and demographic forces (phew talk about wide coverage!)   

Tune in to hear his origin story, from growing up in a law-less money household to meeting his wife Helen who turned his financial picture around.  

Fast forward to today where Tim sits at the coal face of Australia’s housing data; he’s breaking down what REALLY happened to housing values in September… 

And why, especially during times like these, it’s important to play the long game (using the last 30 years of housing values as proof!)  

PLUS, we unpack the market winners and losers over this period to highlight some valuable market lessons.  

Listen in now folks to get a true understanding of what the figures really mean! 😲 🤯

 

Free Stuff Mentioned… 

 

Want to work with Bryce & Ben’s Award-Winning Team? 

 

Here’s some of the gold we cover… 

  • 0:00 – A sneak peek of today 😊  
  • 1:34 – Yep…we’re giving you 2 bonuisodes?!  
  • 3:37 – This is how expensive procrastination really is!  
  • 5:56 – Meet Tim Lawless!  
  • 8:30 – Growing up in a law-less money household!  
  • 10:50 – THIS played a crucial role in increasing transparency around property investing!  
  • 12:03 – The best advice Tim ever received ( + life after buying his first property)  
  • 13:02 – So…how did he set up his money management systems??  
  • 13:53 – Highlights from Australia’s Housing Values in September  
  • 15:59 – Did the 25-basis points cash hike surprise Tim??  
  • 16:56 – We might find the housing bottom out in…early 2023?!  
  • 18:38 – Should we expect a confidence shift in this market cycle??  
  • 20:48 – APRA’s 3% Buffer: Will it be relaxed?  
  • 22:29 – “It was an absolute cash grab…”  
  • 24:20 – QLD’s new forecast post the scrapped land tax…  
  • 25:40 – The 30-Year Long Game: Why is it important??  
  • 27: 59 – Folks, if you’ve got market anxiety, let this sink in… 
  • 30:01 – Comparing House Values Across the Decades: Why did we see these results?  
  • 32:26 – This reflects the strength of our economy… 
  • 34:55 – What we saw in Perth is a reflection of these cycles!  
  • 36:47 – Which markets were the best performing over 30 years?? (The Regional winner might surprise you!)  
  • 38:10 …and the lowest-performing markets! 
  • 40:23 – What degree of effort is put into the research at an SA2, SA3 and SA4 level?  
  • 43:27 – Why measuring home values is a difficult task… 
  • 44:24 – Where are the top #3 SA3 areas?!  
  • 46:48 – The Importance of Scarcity Value 
  • 47:25 – We’ve said it once, we’ll say it again: It’s time in the market, not timing the market!  
  • 50:30 – Check out THIS graph (bottom of page 1) summarising growth and volatility over the past 30 years!  
  • 53:29 – Houses Vs. Units: Tim’s 5-Year Predictions!  
  • 56:22 – Will regional markets outgrow cities?!  

And… 

  • 1:00:09 – Our Key Takeaways 
  • 1:03:10 – How to avoid absorbing negative property noise!  
  • 1:05:38 – We need to allow borrowers to borrow!  
  • 1:06:07 – Want to learn how to beat the banks? Watch this.  
  • 1:07:34 – Bryce & Ben’s Bowling & Bingo Escapades  

 

Bonusisode: The Art of Investing in Volatile Markets – Chat with Michael Savy

By in Free Resources, Podcast

With the turbulent state of today’s markets, it’s no surprise that there’s been a lot of noise around the future of Australia’s market and what it means for investors. 🤯

With many conflicting trends and numbers — and a lack of clarity around the origins of Australia’s inflation — it’s hard to know what remedy is needed from the Reserve Bank of Australia or how to keep successfully investing in such markets.

In Part 2 of this educational series, Ben Kingsley, Managing Director of Empower Wealth and Michael Savy, Partner and Chief Financial Planner of Empower Wealth, break down:

👉 Today’s market data (what do the numbers really mean and what trends are we seeing!)

👉 Michael’s Car Analogy: What do cars, crashes and catching flights have to do with COVID?

👉 What “noise” you should and shouldn’t be listening to, and

👉 How to remain calm (and keep investing) during unpredictable market conditions!

 

Watch the video now:

Free Stuff Mentioned…

 

Here’s some of the gold we cover… 

  • 0:00 – Where we left off…
  • 0:54 – The Famous Car Analogy
  • 4:39 – Where did Australia’s inflation come from?
  • 6:51 – Taming Inflation
  • 9:09 – Inflation & Interest Rates
  • 13:28 – Data Dependent: Let’s break down the numbers
  • 17:13 – Market Analysis
  • 22:38 – So…what opportunities are still here today?
  • 24:29 – THIS is what happens when inflation runs away…
  • 25:27 – How to keep investing in volatile markets!!

 

411 | Meet the NSW Premier: Reforms, Housing Affordability & Cutting Red Tape – Chat with Dominic Perrottet

By in Podcast

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Folks, in honesty, today’s guest needs no introduction – although we’re still going to give him one… 😉

Previously the Treasurer in the Berejiklian Government in 2017 and 2019 (following the re-election of the NSW Liberals and Nationals) he has also served as the Minister for Finance, Services and Property.

A proud husband and father to 7 kids, please welcome to the couch…

The Hon Dominic Perrottet MP, NSW Premier and Member for Epping in the NSW Legislative Assembly!!!!  🎉😱🤸‍♀️ 

Together, we’re pulling back the curtain on NSW’s newest property reforms, and examining his role in the scrapping of Queensland’s diabolical land tax! 

From solving the impending housing affordability crisis to helping everyday Aussies get onto the property ladder and build wealth, the Hon. Dominic Perrottet is sharing what these reforms actually mean for you and why their critical to the future of Australia’s property market.  

But of course, that’s not all… 

Like all our guests, we get to dive a little deeper into who the Premier of NSW is, looking at his childhood and his money story growing up.  

(Psst here’s a teaser: there’s a self-funded school exchange to Italy…at just 15 years old!!)  

An extremely insightful episode, the Hon. Dominic Perrottet shines a light on what managing an entire state looks like from the inside.  A fantastic episode to kick off October, tune in now folks!!  

 

Free Stuff Mentioned… 

 

Want to work with Bryce & Ben’s Award-Winning Team? 

 

Here’s some of the gold we cover… 

  • 0:00 – What we’re discussing with THE Premier of NSW!!  
  • 1:05 – Ladies we want to hear from you! Help us inspire others as a 2022/23 Summer Series guest!  
  • 3:14 – Never judge a book by its cover… 
  • 3:39 – Meet the NSW Premier, the Hon. Dominic Perrottet!  
  • 4:51 – What was his first job straight out of university?  
  • 5:58 – Growing up in a family of 12?!? 
  • 7:04 – How he funded his exchange program in Year 10! 😮  
  • 8:12 – Behind the political curtain of the scrapped QLD Land tax… 
  • 12:13 – The proposed tax set to help First Home Buyers!!  
  • 14:27 – And this is why Ben is a massive supporter of it… 
  • 16:43 – Who is the Shared Equity Scheme Trial targeting, and why? 
  •  18:55 – The true goal of this initiative!  
  • 19:30 – This is the process the Hon. Dominic Perrottet goes through before making changes…  
  • 20:33 – Why has he increased the Accelerated Infrastructure Fund?? (More exciting than it sounds folks!)  
  • 22:28 – How this will materialise in Western Sydney 
  • 23:19 – This is what will bring the prices of houses down!!!  
  • 24:14 –  “You can’t kill the goose that lays the golden eggs” 
  • 25:13 – Slashing through the Red Tape: Where did the problems begin?  
  • 27:47 – Why incentivising councils is important  
  • 28:53 – Ben & Bryce’s Radical Pitch: The Override Rule  
  • 30:18 – This is how local community charm& housing affordability can be achieved…. 
  • 31:57 – The Hon. Dominic Perrottet on the Stretched Commuter Belt  
  • 33:45 – Why working with regional councils is key!  

And… 

  • 34:37 – All Politics Aside…Our 2 cents on today’s discussion!!  
  • 36:08 – If you have property ideas you’d like to share too, we’re inviting you to the couch! 
  • 36:54 – So…is the First Home Buyers Scheme actually a good idea?!  
  • 38:38 – Has Siri been chiming in when you don’t want? Here’s how you can turn Siri off on your Apple Watch.  
  • 40:27 – A Series of Scrapped Reforms: The UK Mini Budget & QLD Lands Tax!  
  • 42:50 – A subdivided AND untouched 35-year-old house sells for…. $3M?!?!?  
  • 44:05 – 2023 as the bottom?! You’ll have to tune in next week...😉  

 

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