The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1284 BIG 4 BANKS MAKE A BOLD 12-MONTH PUNT! WHAT DOES THIS MEAN FOR YOU?
What if you could predict shifts in Australia's interest rates like a grandmaster chess player? We promise to equip you with the insights to navigate the complex landscape of mortgages, inflation, and government policies. Join us as we reveal the latest moves by Australia's top banks and what they mean for your financial future. Whether you're a homeowner feeling the pinch of rising rates or a retiree looking to optimize your savings, this episode is your financial playbook.
Stay tuned as we break down the recent changes from CBA, ANZ, and NAB, focusing on the 12-month and multi-year forecasts. We'll explain how these adjustments impact deposit bonds and offer strategies to stay ahead in a volatile market. Don't miss our deep dive into the strategies of Australia's big four banks and the implications for fixed-term rates. This episode is packed with actionable insights to help you make informed decisions and gain a competitive edge in understanding Australia's ever-evolving interest rate environment.
Everyone in Australia is looking at the interest rate chessboard and they are looking at what moves people are making on it, whether it's inflation, whether it's government, what the banks are doing, and we've got some big news for you this morning. Stay tuned, stay tuned.
Speaker 2:Oh, you're back Wow.
Speaker 1:God, are we excited for this one? Yep, you've all been waiting for this one all been waiting.
Speaker 2:Look, there's nothing. This is like going to the casino, in my opinion, and telling you, and then they tell you on the front door this is what's going to happen if you stick around. Yeah.
Speaker 1:It would be giving some people an advantage if they can read the play. Let's read the play.
Speaker 2:Let's see where the chess pieces are being moved Because, as you said, there's so many opinions in the marketplace. There's so many you know different indicators that you can track whether that be inflation, whether that be. You know deposit, long-term deposits, whether that be. You know what the rates are doing in other countries. There's so many different things that you can look at and then you hope that means something for yourself, particularly if you're a mortgage holder, right?
Speaker 1:Absolutely so. Guys, if you've got a mortgage in Australia, your rates have gone up a lot the last couple of years. There's been talk about rates going down and one thing that I've learned in business and as a real estate agent is you don't bet against the house. So generally, people who you know, if you're very, very good at what you do, you generally dominate in what you do. Now the banks are very, very good at what they do. The top four banks are very intuitive. They're very educated. They've been around a long time, so you know. When it comes as an example, to fixed-term rates, you know, am I a fixed-term rate person? Probably not, because generally the bank's always going to win on their forecasting. But yesterday in news just coming through, today in news, the banks have made some big changes.
Speaker 2:Let me show you. So the changes that you see here are what the big four banks are doing in terms of change for their deposit bonds. So that's CBA, anz and NAB at the top. You can see that Now. I know it's a little bit small, so what I'm going to do is, um, blow it up on mine and be able to read it sort of back. Um, but you were, you were particularly interested in the 12-month change mark yeah.
Speaker 1:So basically, guys, banks like to sit on your money. If you give them your cash, mr Retiree, the banks will say, okay, thank you, we'll take your cash and we'll give you a rate of return on your cash. They then take that money and go and loan to put a margin on it and they go and lend it out as a mortgage to people needing money. So they buy your money, they give it to you and they're buying your your money for cheaper and they sell it for more expensive, and that's the profit that they make. Now, these numbers here that they've got are what they're willing to pay you if you give them your bag of cash, so $500,000 or $100,000 or $1 million, and this is the return they're going to give you. Tell me more, billy. Read it out.
Speaker 2:Well, the interesting one to look at here. So yeah, I'll read it out from the start. Let's just go from the top. So CBA over three months and six months have it down 25 basis points. Nine months is actually up, which is interesting, but back to 12 months it's minus 60 basis points, which is massive really. And then that two, three, four and five-year forecast is all coming back down as well.
Speaker 1:How much is the forecast there for the five-year and the three-year?
Speaker 2:The three, four and five years is down 40 basis points.
Speaker 1:Oh, is that all? Okay, that's it. So we're not far off what they regard as sort of regular look at that for five years. But what I love about this is if these banks are punting what they're going to be giving people for their money on a five-year return, three-year return, two-year return, one-year return, I think, as a direct index as to what money is going to be lent out, this is a great reference of what they think the interest rates are going to do. And they're saying here that in a nine-month period they're seeing a 0.6% shave on rate, Interest rates. Who bloody knows. But it looks good, guys, it looks good. There's silver lining in the cloud.
Speaker 2:It's positive. It's a positive indicator. And then this is on the back of New Zealand making a 0.25% basis point change. Last week. You know they put a rate cut in, so you know that's what's happening around us, yeah, yeah.
Speaker 1:So, guys and girls, I guess today's a short show, but it's a good show. It's talking about these rates. If you've just tuned in, the banks are punting their fixed term money that they're lending out to people. They're going to be reducing the return. Of course they are for those people, but we're seeing it as an indicator for what's going to happen with rates in the future. Big news Like 0.6%. But what does that mean to 600K, for example? Yeah, well, that's what I was going to happen with rates in the future? Big news Like 0.6%.
Speaker 2:But what does that mean to $600K, for example? Yeah, well, that's what I was going to say. Put that into numbers for you. For $600,000 borrowed, a 0.25% change is $100 a month. So you know 0.5, $200 a month, you know that's $600, but if you then multiply that over a million, you double it again. Uh, it puts, you know, two and a half on, you know, you know six. Uh, point six basis points on 600 000 puts about two and a half, three thousand dollars back in your pocket each year. Million dollars, double that again. So it's a lot of money. It's the difference of, um, having a nice couple of meals out, that's for sure it takes. It's massive of meals out, that's for sure it takes a bit of pressure off.
Speaker 1:It's massive Difference between eating steak or not eating steak at home. Now listen, what, billy? What do you think is going to happen with these rates? If this is any indicator, which I believe it is, what do you think? So, the next sort of 12 to 24 months of rates? What's your punt if you're a punting man?
Speaker 2:Well, just like there's a direct correlation between deposit terms and rates, deposits and and rates, there's another direct correlation between mortgage rates moving and people's borrowing capacity. So for every 1% change in the cash rate, there's a 10% change in people's borrowing capacity. We tend to see that filter through into prices because, as people have got more to spend, it frees up their choice. It opens up more flexibility when it comes to their borrowing. I think you can expect to see people paying a little bit more because they can, and people that have been waiting on the hurdle of not being able to get the finance. It solves their problem. It's positive Okay.
Speaker 1:Billy, the old man in the young man's body. Thank you very, very much.
Speaker 2:Thank you for having. I'm pretty excited. I'm the excited agent. I feel like there's a long time coming. This is a good indicator and it's not an opinion.
Speaker 1:Yeah, and I think that you know there are people out there that actually genuinely hardcore including me need these rates to do better. I think for households it's just good news. It's just good news. This is probably the most significant good news on rate movement that I've seen. Uh, and I don't and I don't believe it to be a pun I I think it's a solid piece of information that these term deposits are um are reducing yeah, you can jump online find this article for yourself.
Speaker 2:Uh, just just type in the top and mine at the top there.
Speaker 1:So there you go, guys. There you go the deposits. The rates have reduced, which we reckon is going to move over to interest rates shortly. Certainly, if the banks are punting it, I would be punting it. Have a good day, see you later.
Speaker 2:Happy Wednesday.