As the expression goes, how do you know if someone has run a marathon? Don’t worry, they’ll tell you! With that now noted, I feel compelled to inform you that I have run a marathon and I feel much better for having shared that with you. That said, this property market feels a lot like the start of a race. On race morning, runners wake early and prepare. They stretch, oil up, gather their gels, reassess their plan and find an old jumper to chuck on and ditch at the start line. The nervous energy before a race is one of the highlights. All that anticipation and excitement, without any of the agony. Then the starter’s pistol sounds and off you trot.
This week’s RBA meeting had all the hallmarks of a starting line. Buyers had been waiting for the announcement, although not everyone was preparing to run the same race. The decision to increase interest rates was a loud starter’s bang. But rather than sending everyone sprinting, it may give the patient runners an opportunity to find their own pace. At our quarterly property review last month, an audience member told me they were actually waiting for a rate increase.
They represented a group of investors and upgrading home buyers who are under no immediate pressure to purchase. Their thinking was simple: another increase might create an opportunity to buy at a more attractive price. These buyers can often manage the additional debt or may not need much debt at all. They’re resilient, selective and hunting for value. I suspect we’ll see some of them move while others retreat. But there is another side to this decision. Higher repayments place more pressure on households already stretched, particularly first home buyers who borrowed close to their limit and renovators whose building costs have blown out.
To the person on the street, it can feel as though they’re carrying the burden of economic decisions over which they have very little control. For Brisbane property, I expect a more divided field: well-positioned buyers looking for opportunity and financially stretched owners facing harder choices. That doesn’t mean every property becomes a bargain. It means the circumstances of the buyer and seller will matter more than ever.As any marathon runner knows, the same course can feel very different depending on what you’re carrying.
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