The RBA’s rate drop for July has been slashed to a historic 1% with every intention to stimulate property markets. How does this affect you and your pool?
Historically, the property market is seasonal, but 2019 has certainly been different for a number of reasons:
• Federal May Election
• Labor’s disastrous capital gains tax plan
• housing bubble
• lending uncertainty
This has all led to a drop in the market where home owners’ requirements for building haven’t been a priority, simply because they’re not making the return on spend.
Financial New Year means all the changes, and July 1 too brings lots of tax cuts and promises, especially following the May budget and election. These include
• child care subsidy rates
• income tax breaks across the board
• changes in the Family Tax Benefit for high-incomes
• tax changes for small businesses with the Single Touch Payroll system
• increase in the write-off threshold for businesses
• minimum wage increase
• superannuation changes,
• and even the way you lodge your tax return
The Reserve Bank of Australia’s rate drop back in June to 1.25% was the first since August 2016; some two and a half years of staying at 1.5%. The RBA’s intentions for the latest July reduction in cash rate to a historical low of 1% is to stimulate property markets. This is the first time since 2012 the RBA has made back to back cuts, with the likelihood for the market to move again with another cut later in the year.
While unemployment levels and wage growth have been slow, the property market is well and truly on the move again with brand new confidence: spending is up, and borrowing is steady. The industry will see building back on in the financial new year, and people looking to invest their money into properties once more.
It’s been a market downturn generally, across the last 12 – 24 months with few sales and prices bottoming out. But as the market moves, prices come back up. We can confidently say the worst has come and gone, and the market is improving. However, more government spending and tax cuts will be needed for the country’s economy to see genuine improvement overall.
And as we well know, the RBA cutting rates doesn’t necessarily flow through to the big banks, though there is every indication they will be passing on the cuts to borrowing. But while it may seem the banks are looking to ease up on borrowing restrictions, I’ve been finding quite a few queries coming in from banks also requiring proof of pool safety certificates for refinancing.
We’ve got answers.