Australians have had their say at the polls but we’re still without a clear leader. In fact, as at around 4:30 pm on Thursday there were still more than 16% of votes to be counted. With all this uncertainty, it came as no surprise to learn that the RBA Board decided to leave the official cash rate on hold at the historic low of 1.75% earlier this week. But with continuing signs of weakening local economic activity and growing concerns over the international economy, the likelihood of a cut in interest rates over the coming months is increasing according to financial experts.

Australia’s AAA credit rating at risk

We also had news this week, in the wake of the election that Australia’s AAA credit rating is currently on S & P’s (Standard and Poor’s) watch list. Federal Treasurer Scott Morrison has described the potential downgrade of our credit rating as “sobering” and has urged all members of the forthcoming parliament to “reflect on the need for government to live within its means”.

More sobering news for Perth – but there is always a silver lining

More sobering news for two Australian cities came with the release of Core Logic’s national Home Value Index on July 1. All but Perth and Darwin experienced growth in dwelling values over the past 12 months (Perth’s average dwelling value fell by 4.2% over the past 12 months, while Darwin’s fell by 3.5%). The strongest growth in dwelling value over the past 12 months occurred in Melbourne (13.9%) followed closely by Sydney (13.1%).

The report showed that the pace of capital gains in June was substantially lower however, indicating a slowing down of the market. Perth’s dwelling values are 7.4% lower than they were when the market peaked in December 2014. Perth’s median house price now stands at $505,000.

The silver lining…

The important thing to remember is that it’s the changeover that matters most when you’re buying and selling. For instance, it’s a great time to be upgrading in a market that is at or close to bottoming out, as you’re more likely to find a great buy. It’s also a good time to be a first homebuyer as now is the ideal time to enter the market before it starts to rise again (which it always does).