HEY NEIGHBOUR!

This month we've taken a closer look at three issues that we believe will have a direct impact on our industry. The introduction of AUSTRAC's new identity verification requirements marks one of the most significant compliance changes real estate has seen in many years and will affect virtually every property sale. We also examine the growing speculation around the Reserve Bank's next interest rate decision and what it could mean for buyers, sellers and investors heading into the second half of the year. Finally, with One Nation continuing to gain momentum in the opinion polls, we explore the political debate surrounding preference deals and whether this changing landscape could influence future government policy and, ultimately, market confidence.

We're also continuing to see a trend that is causing increasing concern across the property sector. A combination of higher holding costs, ongoing legislative changes and the Federal Government's proposed taxation changes affecting superannuation balances—including the proposed changes to the taxation of larger self-managed superannuation funds (SMSFs). As more investment properties are sold, particularly where they are purchased by owner-occupiers rather than other investors, the pool of available rental housing shrinks. If this trend continues, we are concerned it could further tighten an already undersupplied rental market and place additional upward pressure on rents over the next 12 months. While this may benefit some remaining investors, it is unlikely to be good news for renters who are already facing affordability challenges.

And of course, no newsletter would be complete without a quick mention of Carlton. As a happy Blues supporter, it seems the playing group has finally clicked. Da Da Da Da Da !!! We may even make the final 10. Tough games coming in the next few weeks though.

Thank you for your continued support.

Warm regards,

Carmela

MARKET INSIGHTS

We strive to stay up to date on the latest market trends. Here are a few articles we think are worth reading.

AUSTRAC Identity Verification – What Every Property Buyer and Seller Needs to Know (austrac.gov.au)

From 1 July 2026, Australia's new AUSTRAC AML/CTF Tranche 2 reforms officially apply to real estate transactions. Real estate agents are now legally required to verify the identity of buyers and sellers before providing designated real estate services.

Key Takeaways:

• Identity verification is now mandatory for buyers and sellers involved in most property sale transactions.
• Clients should expect to provide government-issued identification and additional information before a sale can proceed.
• The reforms are aimed at reducing money laundering and increasing transparency across Australia's property market.

Will Interest Rates Stay Higher for Longer? (rba.gov.au)

With the Reserve Bank leaving the cash rate unchanged at its June meeting, attention has already turned to the next decision. While many borrowers had hoped rate cuts would arrive during 2026, recent inflation data has led a growing number of economists to believe rates could remain higher for longer.

Key Takeaways:

• The RBA has held the cash rate steady, but future decisions remain highly data dependent.
• Inflation remains the biggest factor influencing when rates may eventually fall.
• Buyers and investors should continue budgeting on the assumption that interest rates may stay elevated for some time.

Claremont Financial x The Neighbourhood - Update from Claremont Financial (claremontfinancial.com.au)

The Reserve Bank of Australia (RBA) held the cash rate at 4.35% in June, offering borrowers a welcome pause after earlier rate increases. While lending conditions remain tighter, Melbourne's property market continues to show resilience, supported by strong population growth, limited housing supply, and ongoing demand from both buyers and renters. Investors also remain active, with competitive lending options still available for well-qualified borrowers.

Key Takeaways:

• Interest rates remain on hold: The RBA has paused rate increases, but future changes remain possible as inflation continues to be monitored.
• Melbourne market stays resilient: Affordable property prices, low vacancy rates, and limited housing supply continue to support market confidence.
• Strong opportunities for borrowers and investors: Despite higher interest rates, competitive lending and solid rental demand continue to create opportunities for buyers and property investors.

If you wish to discuss this further, feel free to reach out.

One Nation's Growing Support – Could Preference Deals Become More Important? (roymorgan.com)

Recent national polling has shown a noticeable increase in support for Pauline Hanson's One Nation, reigniting debate about whether the Liberal Party should strengthen preference arrangements with One Nation in marginal electorates.

Key Takeaways:

• Recent polling suggests One Nation's primary vote has increased significantly in parts of Australia.
• Debate continues over whether stronger Liberal–One Nation preference arrangements would improve Coalition electoral prospects.
• Australia's preferential voting system means preference decisions can significantly influence close contests, particularly in marginal seats.