Sh-

And then we've been blindsided with another increase.

We've now got inflation, um, came back yesterday at 4%, so that has increased significantly, which is making it look like we are going to see another rate increase.

Funnily enough, the phone calls have stopped.

In the past when we would usually have a rate announcement, my phone would ring off the hook with people in a panic.

It seems like people are somewhat used to this now, um, because, yeah, there, it was a lot quieter on Tuesday than it has been in the past, and I think it's because people are just becoming to expect it, um, and hold on for the ride.

[laughs] But I know where they come from.

I mean, there's, for a lot of people that are uncertain, there's also an element of having no control, right? There's a lot of people at the moment, myself included sometimes, when you listen to the news, it's almost that COVID feeling of helplessness, of there's this control, there's this control being had over everything that we work hard for, and it gives that feeling of, "I'm helpless," or, "I can work so hard for something and then it be taken away from me, or the goalpost shifted." And I think that is a big, a big factor around people being uncertain on what they do next, because-

What's happening in the finance world? Maybe two rate rises before Christmas or am I being a little bit dramatic here?

Oh, it's a little bit grim at the moment, isn't it? And I would say I wouldn't say you're being dramatic at all.

I feel like two could even be hopeful.

There's now rumours that there will potentially be three before Christmas.

We have the RBA meeting on the 29th of September and then we have another at the start of November, another at the start of December.

There has been rumours.

of there being three before Christmas, but I certainly hope not.

No, no, it's huge.

investor

loans are down across the board because, and it's quite interesting because I know a lot of people have been put off because of negative gearing.

But, you know, I was having a really good chat to a client about it the other day and I was like, is your whole purpose of buying an investment property to save like six and a half grand on tax this year? Or is it a long-term plan? strategy for retirement where the equity growth and stuff like that is going to fund your retirement.

Yes, it's super frustrating that, you know, we feel like we hand over so much of our money already to the taxman and now they're grabbing onto that little bit more.

But when you actually look at it from the black and white picture of what it is, you can still write off those losses, but they'll come back when you sell the property.

So there's certain things that I think a lot of people have just heard, negative gearing's off the table, I don't want to buy an investment property.

And for some, it is off the table because their borrowing capacity has been substantially impacted.

encourage

Yeah.

Yet everyone's saying that there's a lot on the market and it's a buyer's market.

So I'm interested to see, I guess, what the next six months is going to hold, whether a lot more is going to come on the market or whether a lot of vendors are holding onto their property because they're worried that they're going to sell for a loss.

And if they hold on for that little bit longer, they'll, you know, see it out.

From a borrowing capacity perspective, we've seen a lot of investors invest put the brakes on, especially your sort of one to two property mum and dad investors because their borrowing capacity has taken a really hard hit with negative gearing being removed.

But your volume investors, they're still moving and shaking.

They think it's a good time to buy and I don't think anything's going to stop someone who has a large portfolio, to be completely honest.

So that is a fascinating stat.

Remember when Philip Lowe, the, the, the former governor of the RBA, came out and said, um, interest rates are gonna stay on hold for, like, three to five years? [laughs] And then within 18 months, it bang, they're up to, like, record highs.

Yes.

And look, you know, I would really, really hope that they don't increase them anymore because I am seeing a lot of people start to feel the pinch now.

I'm seeing a lot of people's borrowing capacity substantially lower, especially people in the investment space because we've already seen a, let's say, 25 to 30% reduction in their borrowing capacity just off the back of negative gearing being scrapped on new purchases.

Um, so there, there's already a lot happening, so I don't think that them m- having another increase is going to get any kind of result that they're looking for.

There needs to be something else that's going to bring down inflation.

Um, but you're just finding now that a few on your books are maybe starting to fall delinquent?

I wouldn't say delinquent.

Yep

...

I remember my parents, we'd eat very basic foods, and we'd be dressed in very basic clothes, and that doesn't seem to be the thing for a lot of families these days.

Um, but a lot of households have had to start cutting back on the luxuries that they've been used to for so many years, and I think it's the first time that I really have noticed how much people are being more, uh, conservative with their funds, and yeah, a little bit more frugal-

Do you see people just totally nearly at the point of giving up, or they're saying, "We can't do this anymore"? What do you see?

see?Thankfully, I am quite lucky with a lot of my clients that I haven't seen too much stress.

Though, in saying that, it is the first time that I'm seeing c- some clients of mine that are in arrears.

And I've n- I've, in 14 years in the industry, I haven't had a high arrears level on, um, m- the mortgages on my book.

Mm.

I truly believe that it is set up to make people more and more reliant on the government, because the more we rely on the government, the more control they have.

And however, the rich will get richer because I, I think people with that attitude are just gonna keep moving forward anyway.

Mm

... get into the market.

But the thing is, it's really not helping the first home buyer get into the market.

I can tell you now, o- on the Gold Coast, a first home buyer, if they're buying by themselves, unless they have a very high income, they're not buying.

Because for an average apartment, you're not getting anything for under 850 to $900,000.