Latest news with #JamesMashiter
Yahoo
2 days ago
- Business
- Yahoo
Dark $95,420 property cloud looming for new buyers after RBA's interest cut silver lining
New research has revealed how much property prices spiked in the 12 months after the first interest rate cut from the Reserve Bank of Australia (RBA). Homeowners have already relished in two reductions in the cash rate this year, which has dropped from 4.35 per cent to 3.85 per cent. While a cut has put hundreds of dollars back into the pockets of mortgage-holders, those wanting to get into the property market may be locked out as costs rise. Melbourne couple Ashleigh Pullin and James Mashiter have been looking to buy their first home since April, but told Yahoo Finance they're coming up against stiff competition. 'You get very disappointed because you see the house you put an offer in, then it goes for another $30,000, $40,000 over, and you're not even competitive," Pullin said. RELATED Couple's $800,000 problem as RBA interest rate cuts fuel Aussie property frenzy Centrelink pension warning for 4.3 million Aussies facing super nightmare Aussie couple reveal 'cheaper' $400,000 housing solution How much could property prices rise after an interest rate cut? Data from the RBA, Cotality and AMP detailed how the property market reacted the first rate cutting cycles in previous years. In the 12 months following a reduction in February 2001, there was a 16.2 per cent jump in prices. After 18 months, prices had increased by 25.8 per cent — the biggest increase in the dataset. Even in the short term, values had increased by 3.6 per cent three months after the rate 2008 and July 1996 also saw considerable one-year growth, with a 4.9 and 6.9 per cent bump, respectively. The median price over 12 months increased by 2.6 per cent, and 7.9 per cent over 18 months. According to the Domain House Price Report for June, Australia's median house price currently sits at $1,207,857. If there was a 7.9 per cent lift in that price, homebuyers could be paying an extra $95,420 by July next year. The RBA's February meeting this year was the first rate cut that homeowners had received since 2020, and came after more than a dozen increases in the cash rate in 2022 and 2023. There was another cut in May, and experts have pencilled in possibly two more cuts for 2025, with the potential for further reductions in 2026. Domain modelling found if the cash rate fell by 1.5 per cent by early 2026 from 4.35 per cent rate, the median house price for the combined capitals could jump to $1.32 million. Westpac has predicted this could happen by May next year. A jump that significant would major headaches for homebuyers, however homeowners would relax knowing their asset is growing in value after three years of being battered by high interest rates. The RBA board will next convene on August 11 and 12 to determine whether the cash rate will change after a shock hold in July. Commonwealth Bank, ANZ, Westpac, and NAB all believe the Board will deliver a cut. Why rate cuts can increase property prices Property prices don't always go up in tandem with a falling cash rate. May 1982 and January 1990's first rate cuts saw property prices fall 4.5 and 0.1 per cent over 12 months, respectively. However, it's worth pointing out that Australia was in a recession during those periods. The price rises also aren't always significant. The November 2011 rate cut saw prices rise a modest 1.4 per cent in a year, and 4.4 per cent in 18 months. However, experts have warned that a reduction in the cash rate can create greater competition in the market. A lower cash rate means some people might finally be able to get pre-approval and buy a home, and it could increase someone else's borrowing power by a decent amount. But real estate stock is still very limited in some areas, and that can drive up prices. Pullen and Mashiter have had to change their goal posts several times as a result. 'We were looking at places that were four-bedroom, two-bathroom and two garages and that was comfortably within what we could afford, it was going for $760,000 to $790,000,' Mashiter told Yahoo Finance. 'Now we're struggling to find a three-bedroom place with two bathrooms. Anything with two bathrooms has gone over $800,000 every time. Buyer's agent Emily Wallace told Yahoo Finance she's seen a "sharp" increase in interest following the February and May rate cuts, and warned many buyers could end up like the Melbourne couple. "People who have financial literacy understand it and they're acting," Wallace said back in May. "By the time that reaches mass media, that might be two or three months down the track." What will happen at August's RBA meeting? Following the shock hold decision in July, the Big Four banks all shifted their prediction for the next rate cut to August. They had all suggested July was going to see a cut, however, the RBA said the unemployment rate and lack of broader inflation data encouraged it to err on the side of caution. By the time the Board met on July 7 and 8, it only had monthly consumer price index (CPI) information. However, the Australian Bureau of Statistics (ABS) drop its quarterly CPI assessment on Wednesday, which will give the RBA a much better understanding of where the country is at in its fight against inflation. Annual trimmed mean inflation fell to 2.9 per cent in the March quarter, which was the lowest level since December 2021. Economists have said if that number falls to 2.6 to 2.7 per cent for the June quarter, it could be very good news for homeowners next month when the RBA meets to discuss interest rates. The RBA has been pushing for trimmed inflation to be in the middle of its 2 to 3 per cent target zone. 'If the CPI is in line or a little bit higher than the RBA's trimmed mean forecast of 2.6 per cent for the year then I think we will get a rate cut," economist Shane Oliver said. 'If it is 2.8 or 2.9, then they might think, let's wait a little while longer.' Westpac chief economist Luci Ellis said the Board will repeat its July decision next month if CPI is still too high. But she said there could be mortgage relief coming in November, February and May, and said this 'spread-out timing' would be in line with the 'cautious approach the RBA has flagged'.Erreur lors de la récupération des données Connectez-vous pour accéder à votre portefeuille Erreur lors de la récupération des données
Daily Mail
09-07-2025
- Business
- Daily Mail
We're in the market to buy a house, but there's one huge disadvantage that is making it almost impossible
A frustrated Millennial couple looking to find their forever home say they are being consistently outbid by older, cashed-up Australians at auction. Ashleigh Pullin, 28, and her partner James Mashiter, 37, have put in four offers for homes in Melbourne since April. The couple were pre-approved for a $760,000 home loan with a five per cent deposit under the federal government's First Home Guarantee Scheme after years of saving. The First Home Guarantee Scheme allows eligible Australians to use just a five per cent deposit and avoid paying lenders' mortgage insurance. Under the scheme, they are subject to an $800,000 property price cap, which the couple say is making it difficult for them to compete with older buyers. 'We've put in four offers in total since that time and all of them have been unsuccessful,' Ms Pullin told Yahoo News. 'You get very disappointed because you see the house you put an offer in then goes for another $30,000, $40,000 over, and you're not even competitive.' The couple revealed they, and many other Millennial buyers, are feeling the pressure to enter the market, anticipating further interest rate cuts. The Reserve Bank of Australia (RBA) on Tuesday voted to keep interest rates steady at 3.85 per cent, after a series of rate cuts renewed interest in the property market. Mr Mashiter said the market was reacting quickly. 'We were looking at places that were four-bedroom, two-bathroom and two garages and that was comfortable within what we could afford, it was going for $760,000 to $790,000,' he said. Now, the couple are struggling to find a home with three bedrooms and two bathrooms inviting offers under $800,000. They have been forced to pivot away from their dream area and are now searching for homes toward Yarra and Dandenong, further away from the city. PropTrack's latest Home Price Index said the values of homes had climbed by 0.3 per cent over June. It took Melbourne's annual property growth to one per cent. The median home value is now $10,600 more than it was last year, at $818,000.
Yahoo
08-05-2025
- Business
- Yahoo
FTSE 100 LIVE: Stocks rise as Bank of England expected to cut UK interest rates
The FTSE 100 (^FTSE) and European stocks were higher on Thursday as traders await the latest decision on UK interest rates from the Bank of England. Threadneedle Street is widely expected to cut rates from 4.5% by a quarter-point for the fourth time in the current cycle, which would be the second reduction this year. Analysts said some members of the central bank's Monetary Policy Committee (MPC) could push for a larger 0.5 percentage point cut in a bid to reduce borrowing costs further and ease pressure on households and businesses. James Mashiter, fixed income portfolio manager at asset manager SEI, said: "We think the Bank of England will cut the base rate by 25 basis points, in line with market expectations. However, with a whiff of stagflation in the air, the BoE is in a difficult position as it attempts to stimulate growth while keeping inflation expectations anchored and the bond vigilantes at bay.' Rate setters will also update their forecasts for the UK economy, with Deutsche Bank expecting 'meaningful changes'. It is the first MPC meeting since the US president Donald Trump's 'liberation day' tariffs. It comes as UK inflation has fallen towards its 2% target in recent months, which is likely to indicate to policymakers that interest rates can continue to come down. The consumer prices index (CPI) slowed to 2.6% in March, down from 2.8% the month, according to the latest official data from the Office for National Statistics (ONS). London's benchmark index (^FTSE) was 0.3% higher in early morning trade as Downing Street confirmed the Prime Minister would make an announcement regarding UK-US talks later today. Germany's DAX (^GDAXI) rose 0.6% and the CAC (^FCHI) in Paris headed 0.4% into the green. The pan-European STOXX 600 (^STOXX) was up 0.2%. Wall Street is set for a positive start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green. The pound was almost 0.1% down against the US dollar (GBPUSD=X) at 1.3284. Stocks: Create your watchlist and portfolio Follow along for live updates throughout the day: Downing Street has confirmed that prime minister Kier Starmer will make an announcement about a deal with the US on tariffs later today. A spokesperson for No 10 said the US is an "indispensable ally for both our economic and national security" and "talks on a deal between our countries have been continuing at pace". Meanwhile, the PM said: 'As you know, talks with the US have been ongoing, and you will hear more from me about that later today." In his statement, marking 80 years since the end of WW2, Starmer said he'll act in the national interest, for workers, businesses and families 'to deliver security and renewal for our country'. The UK housing market continued to lose momentum in April, with both buyer demand and completed sales falling as the stamp duty holiday came to an end. According to the latest residential market survey from the Royal Institution of Chartered Surveyors (RICS), a net balance of -33% of respondents reported a decline in new buyer enquiries, as higher transaction costs prompted many would-be homeowners to pause their plans. It is the third consecutive month demand has dropped. Sales volumes also dropped, with a net balance of -31% reporting a fall in agreed transactions — the weakest reading since mid-2023. 'Although geopolitical developments haven't helped the mood music in the residential market over the past month, the main reason for the dip in the key RICS sales activity metrics lies in the expiry of the stamp duty holiday at the end of March,' said Simon Rubinsohn, chief economist at RICS. Stamp duty discounts became less generous for some home buyers from 1 April. Stamp duty applies in England and Northern Ireland. Short-term expectations remain subdued, with a net balance of -15% expecting further declines in sales over the next three months. However, Rubinsohn suggested the medium-term outlook may be improving. Read the full article here Traders are awaiting the latest decision on UK interest rates from the Bank of England this afternoon. Threadneedle Street is widely expected to cut rates from 4.5% by a quarter-point for the fourth time in the current cycle, which would be the second reduction this year. Rate setters will also update their forecasts for the UK economy, with Deutsche Bank expecting 'meaningful changes'. It is the first Monetary Policy Committee (MPC) meeting since the US president Donald Trump's 'liberation day' tariffs. James Mashiter, fixed income portfolio manager at asset manager SEI, said: Today's decision will be delayed by two minutes to honour the silence to mark the 80th anniversary of VE Day. It comes as UK inflation has fallen towards its 2% target in recent months, which is likely to indicate to policymakers that interest rates can continue to come down. The consumer prices index (CPI) slowed to 2.6% in March, down from 2.8% the month, according to the latest official data from the Office for National Statistics (ONS). Stocks in Asia were higher overnight with traders responding positively to the news of trade talks between Washington and Beijing over the weekend. The Nikkei (^N225) rose 0.4% on the day in Japan, while the Hang Seng (^HSI) also gained 0.4% in Hong Kong. The Shanghai Composite ( was 0.3% up by the end of the session. Across the pond on Wall Street, the S&P 500 (^GSPC) rose 0.4%, and the tech-heavy Nasdaq (^IXIC) was 0.3% higher. The Dow Jones (^DJI) also gained 0.7%. It came as the US Federal Reserve night kept interest rates on hold for a third meeting running at a range of 4.25% to 4.50%. The move was widely expected and it stuck to a patient tone amid heightened uncertainty. The prepared statement noted that uncertainty had 'increased further' as risks of both 'higher unemployment and higher inflation have risen'. In the press conference Fed chair Jerome Powell acknowledged opposing pressures on its dual mandate stemming from larger-than-expected tariffs announced so far and offered little guidance on the policy path ahead. Powell emphasised the elevated uncertainty but also noted that the economy remains resilient and repeated that policy is well positioned to respond, while pushing back on the idea of pre-emptive rate cuts. US economists at Deutsche Bank expect the next rate cut to come in December, with risks tilted towards earlier cuts if unemployment rises more sharply. Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and happening across the global economy. One of the main highlights of the day will be the Bank of England's latest policy decision, along with the subsequent press conference with governor Andrew Bailey. Separately, the Bank of Canada will release their Financial Stability Report, and we'll hear from governor Macklem too. Elsewhere, US data releases include the weekly initial jobless claims, as well as nonfarm productivity for Q1. Here's a quick look at what's on the agenda for today: 12:01am: RICS Housing Market Survey 7am: Trading updates: Next, InterContinental Hotels Group, Airtel Africa, Mondi, IMI, Derwent London, Harbour Energy, Helios Towers 7am: Halifax UK house price index for April 12.00pm: Bank of England interest rate decision 12.30pm: Bank of England press conference 1.30pm: US weekly jobless data 3pm: US Wholesales InventoriesDowning Street has confirmed that prime minister Kier Starmer will make an announcement about a deal with the US on tariffs later today. A spokesperson for No 10 said the US is an "indispensable ally for both our economic and national security" and "talks on a deal between our countries have been continuing at pace". Meanwhile, the PM said: 'As you know, talks with the US have been ongoing, and you will hear more from me about that later today." In his statement, marking 80 years since the end of WW2, Starmer said he'll act in the national interest, for workers, businesses and families 'to deliver security and renewal for our country'. The UK housing market continued to lose momentum in April, with both buyer demand and completed sales falling as the stamp duty holiday came to an end. According to the latest residential market survey from the Royal Institution of Chartered Surveyors (RICS), a net balance of -33% of respondents reported a decline in new buyer enquiries, as higher transaction costs prompted many would-be homeowners to pause their plans. It is the third consecutive month demand has dropped. Sales volumes also dropped, with a net balance of -31% reporting a fall in agreed transactions — the weakest reading since mid-2023. 'Although geopolitical developments haven't helped the mood music in the residential market over the past month, the main reason for the dip in the key RICS sales activity metrics lies in the expiry of the stamp duty holiday at the end of March,' said Simon Rubinsohn, chief economist at RICS. Stamp duty discounts became less generous for some home buyers from 1 April. Stamp duty applies in England and Northern Ireland. Short-term expectations remain subdued, with a net balance of -15% expecting further declines in sales over the next three months. However, Rubinsohn suggested the medium-term outlook may be improving. Read the full article here Traders are awaiting the latest decision on UK interest rates from the Bank of England this afternoon. Threadneedle Street is widely expected to cut rates from 4.5% by a quarter-point for the fourth time in the current cycle, which would be the second reduction this year. Rate setters will also update their forecasts for the UK economy, with Deutsche Bank expecting 'meaningful changes'. It is the first Monetary Policy Committee (MPC) meeting since the US president Donald Trump's 'liberation day' tariffs. James Mashiter, fixed income portfolio manager at asset manager SEI, said: Today's decision will be delayed by two minutes to honour the silence to mark the 80th anniversary of VE Day. It comes as UK inflation has fallen towards its 2% target in recent months, which is likely to indicate to policymakers that interest rates can continue to come down. The consumer prices index (CPI) slowed to 2.6% in March, down from 2.8% the month, according to the latest official data from the Office for National Statistics (ONS). Stocks in Asia were higher overnight with traders responding positively to the news of trade talks between Washington and Beijing over the weekend. The Nikkei (^N225) rose 0.4% on the day in Japan, while the Hang Seng (^HSI) also gained 0.4% in Hong Kong. The Shanghai Composite ( was 0.3% up by the end of the session. Across the pond on Wall Street, the S&P 500 (^GSPC) rose 0.4%, and the tech-heavy Nasdaq (^IXIC) was 0.3% higher. The Dow Jones (^DJI) also gained 0.7%. It came as the US Federal Reserve night kept interest rates on hold for a third meeting running at a range of 4.25% to 4.50%. The move was widely expected and it stuck to a patient tone amid heightened uncertainty. The prepared statement noted that uncertainty had 'increased further' as risks of both 'higher unemployment and higher inflation have risen'. In the press conference Fed chair Jerome Powell acknowledged opposing pressures on its dual mandate stemming from larger-than-expected tariffs announced so far and offered little guidance on the policy path ahead. Powell emphasised the elevated uncertainty but also noted that the economy remains resilient and repeated that policy is well positioned to respond, while pushing back on the idea of pre-emptive rate cuts. US economists at Deutsche Bank expect the next rate cut to come in December, with risks tilted towards earlier cuts if unemployment rises more sharply. Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and happening across the global economy. One of the main highlights of the day will be the Bank of England's latest policy decision, along with the subsequent press conference with governor Andrew Bailey. Separately, the Bank of Canada will release their Financial Stability Report, and we'll hear from governor Macklem too. Elsewhere, US data releases include the weekly initial jobless claims, as well as nonfarm productivity for Q1. Here's a quick look at what's on the agenda for today: 12:01am: RICS Housing Market Survey 7am: Trading updates: Next, InterContinental Hotels Group, Airtel Africa, Mondi, IMI, Derwent London, Harbour Energy, Helios Towers 7am: Halifax UK house price index for April 12.00pm: Bank of England interest rate decision 12.30pm: Bank of England press conference 1.30pm: US weekly jobless data 3pm: US Wholesales Inventories Sign in to access your portfolio
