The media is continuing to report further economic doom and gloom with Australian Property Monitors telling home owners to brace for a 10% reduction in property values over the next 12 months.
With inflation at 5.9% and Australian banks writing off hundreds of millions of dollars the prospect of a reduction in interest rates anytime soon is slim. Even if the Reserve Bank reduces official rates this month the Banks are under enormous pressure from shareholders to make up lost profits and ensure adequate dividends. This pressure has one certain outcome – the Banks will keep rates high – regardless of official rate announcements.
With consumer confidence heading downward and business investment decreasing the scene is set for tough times. Cash is “King” and those willing and able to capitalize on the misfortune of those needing to sell are set to have a bonanza. The Luxury market is feeling the pinch – high end rental properties are sitting idle and the decision to spend money is being taken very seriously by both buyers and tenants alike. The negotiation skills of real estate agents are being put to the test!