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What a 20%+ Increase to Your Borrowing Power Will Mean for Property Prices in 2024-2026

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Manage episode 406123698 series 3423409
Content provided by Redom Syed & Curtis Stewart, Redom Syed, and Curtis Stewart. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Redom Syed & Curtis Stewart, Redom Syed, and Curtis Stewart or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://player.fm/legal.

Send us a Text Message.

We've modelled out borrowing powers for 7 years straight. This shows a close relationship between borrowing amounts and house prices.
In this episode, we deep dive directly into what will happen to borrowing powers in 2024.
We discuss 4 separate scenarios:

  • Scenario 1 (near certainty): Stage 3 tax cuts kick in and add 5% to borrowing power
  • Scenario 2 (currently forecasted by markets): Stage 3 tax cuts + 0.50% reduction in interest rates. Combined this adds 11% to borrowing capacities.
  • Scenario 3 (uncertain timing of APRA change, inflation will likely need to come down): Stage 3 tax cuts + 0.50% reduction in interest rates + a 2% assessment buffer. Combined, this adds 21% to borrowing capacities.
  • Scenario 4 (CBA’s rate forecast for 2025): Stage 3 tax cuts + 1.50% reduction in interest rates + a 2% assessment buffer. This scenario leads to a whopping 36% increase to borrowing power!

What will this all do to property prices? If Scenario 4 comes to life with employment markets remaining strong enough, its likely to bring forward the next leg up of the housing cycle to 2025-2026.

Reach out to us at www.australianpropertytalk.com.au

  continue reading

61 episodes

Artwork
iconShare
 
Manage episode 406123698 series 3423409
Content provided by Redom Syed & Curtis Stewart, Redom Syed, and Curtis Stewart. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Redom Syed & Curtis Stewart, Redom Syed, and Curtis Stewart or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://player.fm/legal.

Send us a Text Message.

We've modelled out borrowing powers for 7 years straight. This shows a close relationship between borrowing amounts and house prices.
In this episode, we deep dive directly into what will happen to borrowing powers in 2024.
We discuss 4 separate scenarios:

  • Scenario 1 (near certainty): Stage 3 tax cuts kick in and add 5% to borrowing power
  • Scenario 2 (currently forecasted by markets): Stage 3 tax cuts + 0.50% reduction in interest rates. Combined this adds 11% to borrowing capacities.
  • Scenario 3 (uncertain timing of APRA change, inflation will likely need to come down): Stage 3 tax cuts + 0.50% reduction in interest rates + a 2% assessment buffer. Combined, this adds 21% to borrowing capacities.
  • Scenario 4 (CBA’s rate forecast for 2025): Stage 3 tax cuts + 1.50% reduction in interest rates + a 2% assessment buffer. This scenario leads to a whopping 36% increase to borrowing power!

What will this all do to property prices? If Scenario 4 comes to life with employment markets remaining strong enough, its likely to bring forward the next leg up of the housing cycle to 2025-2026.

Reach out to us at www.australianpropertytalk.com.au

  continue reading

61 episodes

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