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Finance Update July 2023

As we reach the end of July, it’s time to reflect on the biggest news of the month. Here are four finance, property and tax stories that really stood out:

  • RBA reforms cash rate
  • HomeBuilder extension
  • Property listings rise
  • How to get tax help

The Reserve Bank of Australia (RBA) has unveiled a series of reforms, in response to an independent review commissioned by the federal government.

Starting in 2024, the RBA board will meet eight times per year to assess the cash rate, rather than the current 11. Meetings will last longer; and, before each meeting, board members will have the opportunity to speak with a broader range of RBA staff.

“The less frequent and longer meetings will provide more time for the board to examine issues in detail and to have deeper discussions on monetary policy strategy, alternative policy options and risks, as well as on communication,” RBA governor Philip Lowe said.

“Likewise, the staff will have more time for analysis, with less time spent preparing summaries of recent developments.”

In another change, the governor will hold a media conference after each cash rate meeting, which “will provide a timely opportunity to explain the board’s decisions and to answer questions”.

Meanwhile, the federal government has decided not to grant Governor Lowe a second seven-year term. As a result, the current deputy, Michele Bullock, will assume the top job in September when Governor Lowe’s term expires.

The deadline for existing HomeBuilder applicants to submit supporting documentation has been officially extended to 30 June 2025.

The deadline was previously set at 30 April 2023, but, in March, the federal government proposed to extend it, subject to the agreement of states and territories – which has now been secured.

This extension applies only to people who had already received formal approval under the HomeBuilder scheme for off-the-plan purchases or renovations. Applicants do not need to do anything to access the extension – it will automatically apply.

The reason the government extended the deadline was to support people who had entered into financial commitments on the basis they’d received the grant, but, through no fault of their own, were unable to use it due to supply constraints and construction industry delays.

Applications for HomeBuilder closed in April 2021. States and territories administer the scheme on behalf of the federal government.

 
In good news for buyers, there’s been an increase in the number of properties listed for sale, as well as an increase in the total number of properties on the market.

SQM Research has reported that the number of new listings (i.e. those less than 30 days’ old) in June was 1.6% higher than the month before.

At the same time, the number of for-sale properties – which includes both new listings and older ones – was 1.8% higher than the month before.

So more homeowners are listing their property for sale and those homes are taking longer to sell.

 

With more properties on the market, buyers have more choice, which means they don’t have to compete as hard on price. In the month to 4 July, there was a 2.0% reduction in prices being asked by vendors.

Given that market conditions are favouring buyers in many parts of the country, this might be a good time to buy. Contact me if you’d like me to find you a great home loan.

If you’re feeling confused about preparing your tax return, the Australian Taxation Office (ATO) has advised you to seek help from its digital self-help tools.

 

“We get lots of calls from the community about topics that can be easily resolved through our digital self-help tools, so it may be better to not wait in a queue to speak to someone when you can do it yourself, at a time and place that suits you,” ATO chief service delivery officer David Allen said.

“Our website has a wealth of information that you can refer to, including specific pages that explain what’s new this tax time for individuals and tax professionals. There is even a virtual assistant called ‘Alex’ that can help you track down the information you need.”

The ATO also provides digital tools, including myTax and the ATO app, which you can use to answer questions and perform specific actions on accounts. You can also seek help from the ATO Community, an online, peer-to-peer platform.

Online tax returns will take up to 14 days to process, according to the ATO.

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I hope you enjoyed our latest update. We’re here to help, so if you need assistance with a new loan or refinancing, please get in touch with one of our friendly team by booking a free consult below.

Kind Regards,
David Fraser

Disclaimer: The information provided above is on the understanding that it is for illustrative and discussion purposes only. Any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances.

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