Changes at the RBA and to first-home buyer scheme, yet stock remains low

By Illawarra Flame advertiser Ian Pepper, of Ray White Helensburgh

Last Friday, Prime Minister Anthony Albanese and federal Treasurer Jim Chalmers announced the next Governor of the Reserve Bank of Australia (RBA) will be Michelle Bullock. Ms Bullock will be replacing Philip Lowe in September this year, bringing an end to Mr Lowe’s seven-year tenure.

Our first woman governor since the RBA was established, Ms Bullock has been at the Reserve Bank for decades. She is currently deputy governor and highly respected by the government, the RBA and business leaders.

It's hoped the leadership change will help ease communication issues with the public. We all remember in 2021 when Mr Lowe famously told the public that interest rates would not rise until 2024! Then, a year later, the RBA commenced the fastest interest rate rise cycle in history.

The appointment of Ms Bullock is unlikely to change the current course of rate rises with at least one and maybe a few more still forecast before rates peak. This seems to have impacted some segments of the local market, in particular, coastal properties above $2,000,000.

Whereas the $1m to $1.5m price segment of the market has been thriving, in part due to the withdrawal of the first-home buyer choice scheme (buyers could choose to pay stamp duty upfront or an annual land tax), which expired on 30 June 2023.

There seemed to be a rush of sales up to the $1.5m threshold for this scheme in June, which was artificially driven by the removal of this policy. In its place the NSW government amended the first-home buyer stamp duty exemption, lifting it from $600,000 to $800,000 on 1 July, with concession rates lifted from up to $800,000 to $1,000,000.

Some notable sales so far this financial year are below:

• Highest sale: 227 Lawrence Hargrave Dr, Thirroul $2,200,000 by Dignam Real Estate
• 10 Georges Rd, Otford $920,500 by  Ray White Helensburgh
• 18 Lachlan St, Thirroul $1,670,000 by Stone Real Estate

Meanwhile, listing numbers are still down on normal levels while home sellers wait for better weather expected in the upcoming Spring selling season.