Up early today attending an economic update by Alan Oster, NAB’s Chief Economist, who was not full of good news. Despite Victoria being the worst of the states economically (thanks Dan!!) – we are still expected to have house prices grow 5% this year, so those who have been waiting for a major fall in real estate prices, will continue waiting.

Louise and James with Alan Oster, NAB

Globally, the world economically is doing it tough with Germany and Japan, major manufacturing centres, in recession, US doing slightly better but expected to slow and all central banks are expected to cut interest rates this year. He expects the Reserve Bank of Australia to cut in November and throughout 2025 so people who are struggling presently, will have to hold on a bit longer.

Australia is still the best place to be with WA, SA and QLD doing well, NSW holding its own, VIC and TAS considered the worst economically. The expectation is for unemployment to rise to 4.5% by the end of 2025 – if this rises unexpectedly faster, things could derail economically. Migration and overseas students are helping as they have to eat and live somewhere. The number of auctions is estimated to be down 30% on the 5-year average.

Currently, the bank is seeing people able to reduce spending and get a second job to keep paying their mortgages and the common myth is people in Australia will keep paying their mortgages rather than feed their kids!! A roof over your heads is that important. Charities are reporting they are paying a huge number of car registrations as people need to live in their cars and they need to be registered or else they are confiscated by the police. Renters are doing it toughest!

What does this mean for you?

We are almost through the worst of the pressure in terms of mortgage payment increases and it is now a matter of just hanging on until rates come down. Services are where people are continually spending in areas such as health and education.

Maintaining employment is vital and proving you are more useful and productive than the next person, should help you hold your job, so make sure you are.

People are being careful with spending and although a major Taylor Swift event (even Alan Oster is going to this) will see plenty of cash splashed around this weekend, the bank says this shows a reduction in other areas, not an increase overall. If you are worried about anything in your finances, just reach out to discuss them as I have plenty of ideas to assist.

Feeling lost in the property market?

As always, if we can be of any assistance and you would like a one-on-one consultation for any loan type, please feel free to reach out.With thanks,