2025 is a year that contains some absolute certainties, making it one of the easiest in recent times for planning.
That said, even though most people crave certainty—even when it stares them in the face and yells loudly in their ear—many still seek that ever-elusive “one more” piece of information and fail to take action. Most people spend their lives frozen by the fear of making a mistake…
Even though they’ve heard this truth:
“People who have never made a mistake have never made anything.”
So, what are these absolute certainties?
- There will be an election in the first half of the year—100%.
- Interest rates will fall at some stage this year—that is as close to 100% as possible.
- As a country, affordability will remain an issue.
- And here’s an intriguing one: Melbourne is currently the third cheapest capital city in Australia, which seems inherently wrong.
- Most people will do nothing.
As an aside, I once built the largest franchise that Mortgage Choice ever had in Australia—an incontestable fact. (Not anymore… that phase of my business life is long gone.)
I spotted opportunities before events unfolded and took action—most franchisees didn’t.
They would ask, “But how did you know?” And my answer, then as now, is:
“It was written on GIANT billboards for everyone to see.”
Yet most people drive right past these giant billboards—they are there to be seen, but for many, they are invisible.
I have written five giant billboards above… and the fifth presents an incredible opportunity for the few who read and have the courage to act.
An Election
I have no stated interest in its outcome—that is for all 27 million of us to privately decide. BUT… it is a FACT that during election periods, housing markets are subdued as most people freeze in “wait-and-see” mode.
Waiting for what, exactly?
In the mainstream, elections rarely make the sweeping changes that self-important politicians promise. One issue this year is significant—our electricity grid and its future direction. My specialist training in physics helps me understand its importance, but it is a 50-year issue. It may not even affect your lifetime. While it is a crucial technical matter, it has no direct or immediate effect on housing.
Election periods create a unique opportunity to take a step forward while most people stand still.
Interest Rates
Inflation is in a strange spot—two numbers were released last week. One shows inflation in the low 2s, which would prompt the Reserve Bank to cut rates. The other is in the low 3s, which would not.
The difference? The government’s carefully calibrated $275 per quarter energy bill relief—for four quarters. And when does it end? The election!
The government has openly stated that they were gaming the system to artificially lower the inflation rate in hopes that the Reserve Bank would act. However, the Reserve has made it clear it looks past such manipulation, stating that unless that government payment continues indefinitely, inflation will snap back to the low 3s.
Analysts are debating: Will the Reserve Bank focus on the 2s, or give more weight to the 3s? Will they cut rates or hold firm?
At an individual level, this matters to borrowers. But the certainty, as it was last year, is that rates are not going up. Any decisions you want to make can be made with as close to certain confidence as possible.
Affordability
Even if rates go down and home loan relief occurs, the things that have skyrocketed in price over the past few years are not coming down.
What does this mean?
Housing has shown clear signs of hitting affordability ceilings. Some heat has come out of the market, and conditions have shifted in favor of buyers—meaning opportunity exists again.
Melbourne
The city that endured the world’s longest COVID lockdown racked up the world’s largest COVID debt. The Victorian government decided that investors would shoulder that debt—through land tax, vacant property tax, and casual rent tax (Airbnb).
As a result, Melbourne now has the highest percentage of investment property listings in the country, as investors head for the exits—with very few stepping in.
Melbourne has fallen from its natural place as the 2nd highest-priced housing market in Australia to the 3rd lowest.
Governments don’t last forever. Policies that create perverse outcomes always change. There’s a billboard-sized opportunity here.
I have access to trusted contacts in Melbourne if you’re interested.
Behavior
Because most people do nothing…
There’s an old saying:
“Some people make things happen, some watch things happen, and after the event, most say, ‘WTF happened?’”
I’m not here to change behavior or even attempt to. I am simply saying: for the astute, these billboards are there to be read.
Happy 2025!
I’ll write again next week.
In the meantime, if you’d like advice tailored to your personal circumstances, please call or email me anytime.
That’s what I’m here for.
Ask Alan, Mortgage Broker Brisbane