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Young Aussies selling their first homes as mortgage stress bites

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A surge in quick home resales has been attributed to the growing mortgage stress faced by homeowners, according to analysts and real estate agents.

Brisbane real estate agent, Jett Jones, has noticed a significant increase in properties returning to the market within a short period after being sold.

The data from CoreLogic, exclusively prepared for ABC News, indicates that the proportion of homes resold within two years of their previous sale is at a nine-year high. In April, 8.3 percent of properties sold were owned for less than two years, indicating a steep increase since mid-2021.

FILE PHOTO: An ibis perches next to the Reserve Bank of Australia headquarters in central Sydney, Australia February 6, 2018. REUTERS/Daniel Munoz//File Photo/File Photo

Quick turnover

Analysts point out that the current scenario is different from previous instances of quick property turnover, which were typically observed during property booms when investors sought fast profits. This time, a substantial number of properties resold within a short duration are being sold at a loss. This suggests a rise in forced sales, as homeowners who purchased during the low-interest rate pandemic period struggle to cope with surging mortgage repayments.

Younger buyers, including first-time buyers who may have overextended their budgets, and investors looking to retire or reduce costs, are among those impacted. Hobart and Brisbane are the leading cities where properties are resold within two and three years, highlighting the severity of the issue.

Financial counsellors have reported a 30 percent increase in calls for help related to mortgage stress, with the number one reason for seeking assistance being the inability to afford mortgage repayments. The situation has become more critical for those with pandemic-era, cheap, fixed-rate mortgages expiring.

Experts urge homeowners facing financial trouble to seek advice early, engaging with their banks and relevant services to explore their options and remain in control of the sale process. While some are still making profits on property sales, a significant number of pressured sellers may be on the rise as interest rates and inflation continue to impact mortgage affordability.

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Money

Trump victory sparks market surge as Wall Street soars

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Donald Trump’s election victory has sparked a massive rally in the stock market.

Banks and industrial companies led the surge as investors bet that Trump’s plans for deregulation and tax cuts will boost economic growth.

Shares of big banks, like JPMorgan and Goldman Sachs, soared as investors predicted fewer regulatory restrictions.

Meanwhile, industrial giants such as Caterpillar and steelmakers like Nucor also hit record highs, reflecting optimism about U.S. manufacturing.

In contrast, clean-energy stocks took a hit, as Trump’s policies are expected to favour traditional energy sectors.

This surge comes amid rising Treasury yields and falling gold prices as investors gain confidence in the transition to a Trump administration.

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Money

Australian Treasurer and RBA chief clash over economy

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A rare dispute has emerged between Australia’s Treasurer Jim Chalmers and Reserve Bank Governor Michele Bullock over the nation’s economic trajectory.

Governor Bullock argues the economy remains overheated, even as growth data shows recent slowdowns.

Treasurer Chalmers, however, warns that sustained high interest rates are “smashing the economy.”

This debate is critical for Australians, as it will influence the future of interest rates and inflation.

Data shows a mixed economic picture: while inflation is down, it’s still above target, and the jobs market remains historically strong.

Ultimately, deciding who’s right may come down to theory and perspective on economic health.

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Central bank expected to ease interest rates as election nears

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The Federal Reserve is expected to cut interest rates again this week, a move aimed at cooling inflation.

This quarter-point rate cut would bring the benchmark rate to about 4.6%, the second reduction this year.

Analysts expect that additional cuts could come in December, which would benefit borrowers by reducing loan costs.

If Trump were to win the election, economists say his proposals on trade and immigration could reignite inflation.

The Fed is balancing a strong economy and low unemployment with its inflation-calibrated rate cuts.

As Election Day approaches, all eyes are on both the Fed and the presidential race.

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