What today’s interest rate drop means for property investors…

The RBA just announced its latest interest rate decision and while the move was expected, the drop to 3.85% still sends a strong signal for property investors.

Here’s what’s really going on behind the scenes, and why it matters if you're planning your next move:

1. Inflation is tracking in the right direction, but it’s not “job done” just yet
For the first time since 2021, inflation has landed within the RBA’s target range: 2.4% headline and 2.9% underlying. That’s a win, but the RBA is still cautious—expecting inflation to bounce slightly later this year as some one-off cost drops fade.

2. This isn’t a pivot it’s a pressure release
The RBA called this a move to make policy “somewhat less restrictive.” They’re not turning the money taps back on, but they are trying to avoid the economy stalling out. It’s a fine-tuned adjustment, not a green light for a borrowing spree.

3. Global uncertainty is hitting closer to home
International volatility, think trade tensions and geopolitical issues is now feeding into Australia’s local growth outlook. The RBA flagged these risks as having real impacts on business and household confidence.

4. Jobs data looks strong, but productivity is lagging
Yes, unemployment is low but productivity isn’t keeping pace. That mismatch makes long-term growth harder to achieve without policy support. The rate cut helps keep things moving while these inefficiencies are being worked through.

5. The RBA is leaving the door open
The Board made it clear, they’re ready to respond to international shocks if needed. This cut is about keeping options on the table and managing risk not rushing into a stimulus cycle.

So, what does this mean for you as an investor?

The RBA's wary of kickstarting a larger property boom, but unfortunately for them they don't have many leavers to pull that wont have a flow on affect to property prices. When you couple this with the recent government incentives, and our inability to supply enough properties to the market the writing is on the wall...

Historically, confidence returns before prices climb. The investors who act based on macro signals (not media headlines) are the ones who set themselves up for the next growth phase.

If you’re wondering what this means for your strategy, let’s run the numbers together.
Click the link below to below book your free discovery call we’ll look at where the opportunities are and what’s possible based on today’s shift.

Auction Market Trends: What Property Investors Need to Know Now - July 28

Australian property market update for week ending July 28, shows indicators of the market holding strong in Perth and Brisbane and Melbourne showing signs of the start of a market recovery. Property investor should keep an eye on Melbourne over the coming months.

Auction Market Snapshot for June 28. Melbourne showing signs of the beginning of a recovery.

Auction Market Snapshot

This week, the combined capital cities' preliminary auction clearance rate surged to 72.2%, up from 71.1% the previous week. This indicates a strong selling market, which is crucial for property investors to understand.

Auction Volume on the Rise

A total of 1,930 homes went under the hammer this week. This is the highest number since late June, although slightly down from the same week last year (1,973 auctions). Increased auction volumes generally mean more opportunities for buyers and sellers alike.

Final Auction Rates

Over the past four weeks, there’s been an average 8-point drop from preliminary to final auction clearance rates. This suggests that the final clearance rate is likely to settle around 64%. Understanding these trends helps property investors gauge market conditions accurately.

City Highlights

Melbourne: Recorded the highest number of auctions with 840 homes going to market. The preliminary clearance rate was just below 70% (69.8%), up from 66.9% last week and 50 basis points above the 8-week average. For property investors, Melbourne's market is showing strong potential.

Sydney: Continued to record stronger auction results compared to Melbourne, with a preliminary clearance rate of 76.5%, up from 74.6% last week. A total of 711 auctions were held, up from 605 a week ago but lower than last year’s 749. Sydney remains a hot spot for property investors.

Adelaide: Leading the smaller auction markets with an 84.8% clearance rate.

Perth: Posted a solid 70.0% clearance rate.

Brisbane: Recorded a 61.9% clearance rate.

ACT: Came in at 60.0%.

Upcoming Auction Volume

Looking ahead, the volume of auctions is expected to ease. Approximately 1,930 homes are scheduled to go under the hammer next week, with a slight drop to 1,840 the following week. For property investors, understanding auction volume trends can help in planning and strategizing investments.

What This Means for Property Investors

The rise in clearance rates and auction volumes signals strong buyer interest and confidence in the property market. For savvy investors, this is a positive sign of a robust and resilient market. Now is a great time to explore investment opportunities and make informed decisions.

Staying updated on auction market trends is essential for property investors. The current trends indicate a healthy market with strong buyer interest, making it an opportune time for new investors to enter the market.

Do you have a game plan for your property investing?

Or are you planning on watching the savvy investors we help, snap up all the quality assets at the bottom of the market?

If you want to join them, book a free discovery call and we can guide you through every step of the process to make informed investment decisions.

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Want to retire early, using the power of real estate investing?

Retiring early is a dream many of us share, but turning that dream into reality requires more than just wishful thinking. It demands meticulous planning, sound financial strategies, and a fair bit of research. I’m here to share three key strategies that can help you navigate your path to early retirement successfully.

1. Do Your Homework: Research Thoroughly

Imagine this: you’ve just found what seems like the perfect investment property. The location is ideal, the price is right, and you’re already picturing yourself sipping coffee on the porch. But wait—have you done your homework?

Insufficient research can lead to poor investment decisions. Understanding the market, neighborhood nuances, and potential risks is crucial. It’s like buying a house without checking the foundation. You need to know what you’re stepping into.

When I was planning my early retirement, I spent countless weekends attending seminars, reading up on market trends, and even chatting with local real estate agents. This groundwork helped me make informed decisions that aligned with my financial goals.

2. Get Your Finances in Order

Ignoring financial planning is like setting sail without a map. Without a clear understanding of your financial capabilities, you could underestimate costs or fail to create a solid budget, leading to financial strain.

Assessing your finances involves more than just looking at your bank account. It means understanding your current expenses, forecasted retirement costs, and potential streams of income.

During my journey, I worked with a financial advisor to create a comprehensive budget. We considered everything from daily living expenses to unexpected costs. This planning gave me peace of mind and ensured that my retirement fund could withstand the test of time.

3. Practice Due Diligence

Neglecting due diligence can be a costly mistake. This involves more than just property inspections; it’s about legal checks, understanding the property’s history, and ensuring there are no hidden issues that could lead to additional costs down the line.

I remember almost purchasing a property that seemed perfect at first glance. However, a thorough inspection revealed some serious structural issues that would have cost a fortune to fix. This experience underscored the importance of leaving no stone unturned.

Bonus Tip: Keep Emotions in Check

Allowing emotions to drive your investment choices can lead to poor decisions. It’s easy to fall in love with a property or get carried away by exciting investment opportunities. However, relying on sound financial analysis rather than emotions can lead to more profitable outcomes.

Early retirement is an achievable goal, but it requires diligent research, solid financial planning, and thorough due diligence. By following these strategies, you can pave the way to a secure and fulfilling retirement.

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Invest for Real Estate Success.

Ignite your financial future with these simplified tips for investment success!

Don't Split It

With a million-dollar budget, aim high. Focus on prime locations. Buy the best property you can afford in the best area within your budget. This strategy maximizes potential gains and offers a strong foundation for your investment journey.

Quality Over Quantity

When it comes to property investment, think like a connoisseur. Prioritize quality over quantity. Invest in properties that have the potential for enhancement. This not only boosts the property's value but also maximizes your returns. Always aim for the best location and highest-quality property you can secure.

Leverage Your Assets

Forget the endless cycle of selling and buying. Instead, leverage your assets to set off a snowball effect of success. The power of time in the market cannot be overstated. Holding onto quality investments allows for compounding growth, turning your initial investments into substantial gains over time.

Dream Big

Don't limit yourself to small dreams. Embrace ambition and let your investment goals inspire you. By leveraging assets and focusing on quality investments, you can create a legacy of financial success. Time in the market, combined with strategic asset management, can turn dreams into reality.

This is general advice and does not take into account your personal circumstances or individual needs. Always seek professional advice before making any investment decisions.

Save these tips so you can revisit and refine your strategy as you embark on your investment journey. Dream big and invest smart!

Days on Market

Days on market is an undervalued tool or indicator that can be used to assist in the negotiation and purchase of property. It’s and indicator as to the market conditions and could assist with your next real estate purchase negotiations.

Days on Market:

• This is a crucial metric used to determine the state of the real estate market. A low number of days on market indicates a sellers' market, while a high number of days indicates a buyers' market. The 'Days on Market' is often used in conjunction with other key metrics to leverage the best outcome for a property sale.

Lead Indicator:

• 'Days on Market' is considered a lead indicator, meaning it can be used to predict future price movements. By analyzing this data, you can determine if the market is favorable for buyers or sellers, and make informed decisions about your property sale or purchase.

Leverage:

• The number of days a property has been on the market can help you understand the leverage you have as either a buyer or a seller. A short time on the market indicates a strong position for the seller, while a longer period can give buyers more leverage.

The Numbers:

• The information provided suggests that less than 30 days on the market indicates a sellers' market, 30-70 days is a neutral market, and 70+ days is a buyers' market. These numbers provide a clear indication of the state of the real estate market, allowing you to make an informed decision about your property sale or purchase.

Remember, these are general guidelines and it's always best to seek professional advice before making any decisions.

The value of a depreciation schedule in property investing!

Depreciation is a common term in property investment, but its significance is often overlooked. It's a valuable tool that property investors can use to reduce their taxable income. This can result in substantial savings over time. However, not all properties are eligible for depreciation, and the rules can be complex. In this post, we will discuss the triggers for when a depreciation schedule would add value for a property investor, including new builds, properties built after 1987, and significant renovations.

New Builds

One of the triggers for when a depreciation schedule would add value for a property investor is when the property is a new build. New builds offer the advantage of maximum effective life for depreciation purposes. The Australian Taxation Office (ATO) allows property investors to claim depreciation on new buildings, which is calculated at 2.5% of the original construction costs over a 40-year period. This can result in significant tax savings for the property investor.

Properties Built After 1987

Another trigger for when a depreciation schedule would add value for a property investor is when the property was built after 1987. This is because, under ATO rules, residential investment properties built after 16th September 1987 are eligible for a Building Allowance. This can be claimed as a tax deduction over a 40-year period. The Building Allowance is calculated at 2.5% of the original construction costs, making it a valuable source of depreciation for property investors.

Significant Renovations

A significant renovation, typically defined as a renovation in excess of $40,000, can also trigger the need for a depreciation schedule. The ATO allows property investors to claim depreciation on significant renovations, which can be spread out over a 40-year period. However, it's important to note that not all renovation costs can be depreciated. Only capital works can be depreciated, which include structural improvements and modifications.

Seeking Professional Advice

While a depreciation schedule can provide valuable tax savings, it's not suitable for all properties. Each property is unique, and the decision to use a depreciation schedule should be based on the specific circumstances of the property. Therefore, it's always advisable to seek professional advice before making any decisions.

A depreciation schedule can add significant value to a property investor. It's a tax-efficient strategy that can help reduce the taxable income and increase the cash flow from the investment property. However, the decision to use a depreciation schedule should be based on the specific circumstances of the property, so it's always best to seek professional advice before making any decisions..