The Bolting Horse.

Firstly, on behalf of the Real Estate industry I’d like to apologise for your social media feeds being clogged with ‘breaking’ news about interest rates. Guys…enough already…we know.
 
This much anticipated moment has now come and gone, however I’d suggest the impact of this shift in monetary policy was felt (and priced in) about 8 weeks ago when the media started beating the drum.
 
So what now? It looks like much of the 2021 gains have now been handed back. The market peaked at dizzying heights in September 2021 (when I personally bought) and has spent the last few months correcting to around 2021 first quarter levels. The combined weight of enormous capital gains, a stubborn pandemic, media hype on interest rates, a seriously concerning global conflict (that’s what it is) and a Federal election has pumped the brakes on the market.
 
Worth noting it took all of that to stop the raging bull….
 
The underlying fundamentals for residential property remain, low supply, high demand and a country that is about to be flush with skilled migrants that are flush with foreign currency.
 
The other thing I’ve noticed over the years is that as interest rates rise, so do rents. This means for investors your relative holding costs move with the tide.
 
As witness to several property cycles I think what we can expect to see over the next 18 months is a level market with low supply. That’s how this market works, fast gains, small losses, sluggish and frustrating levelling phases…rinse and repeat.
 
Something MUCH more exciting than real estate is the Mini-Mos! Folks if the thought of carrying your COVID kilos around Mosman on a rainy Sunday in Mid-June scares you...I'm with you...time to register and start training.
 
Until next week,

David Murphy