Daily Buzz: Friday, 28 June
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PropertyBuzz, your daily dose of property news.
The potential benefits of stage 3 tax cuts; the rate hike cycle expected to continue; and a 14-year high for property resale profitability
Welcome to Property Buzz! I’m Sebastian Holloman. Today is Friday, 28 June.
As the Financial Year 2023-2024 ends, taxpayers are considering the impact of the upcoming stage 3 tax cuts, set to take effect on 1 July.
The tax cuts are designed to increase disposable income and assist with the rising cost of living.
The tax cuts will also increase the borrowing power of individuals, with a person earning $120,000 seeing an increase of 4.4 per cent in borrowing power, and those earning $140,000 or more seeing an increase of at least 5.36 per cent.
For those earning less than $120,000, the increase in loan size will be less helpful in combatting rising house prices.
RateCity warns that a 14th rate hike could soon become a reality, advising consumers to prepare their budgets for potentially two more rate hikes before the end of the year, following the reveal that annual inflation is up above 4 per cent.
Sally Tindall, the research director at RateCity, believes the next quarterly CPI figures will be crucial for the Reserve Bank of Australia, potentially prompting action as soon as August.
Tindall advises mortgage holders to negotiate better rates with their banks or look to refinance ahead of the RBA’s next meeting.
Australian property resales have achieved the highest profitability rate since July 2010, with 94.3 per cent of transactions registering a nominal gain, according to a CoreLogic report.
National home values also rose by 1.7 per cent over the first quarter of 2024.
The median hold period of resales decreased to 8.8 years, with houses having higher rates of profit-making sales compared to units.
Even so, worsening affordability and supply constraints are making units increasingly attractive to buyers.
That’s Property Buzz for today. See you again tomorrow, 29 June, for your daily dose of Property Buzz.
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