AFL grand final of property - meet the teams + How much solar adds to your home's value

Hi everyone,

It has been a frantic few days for me this week - I had the Brownlow presentation, my eldest granddaughter graduated Year 12, an uncle’s funeral and today, the Grand Final Eve lunch - with the big game on tomorrow.

I have been all over the place.

But to finance. Monday is the September RBA board meeting and there is expected to be no change in interest rates. This will be more likely at the November board meeting.

In this week’s newsletter:

• The RBA governor has her say on what’s driving property prices.

• Why the lack of housing supply is pushing up clearance rates.

• My two big tips for first home buyers.

• Brisbane vs Geelong is the AFL Grand Final of property. Who will win?

• Do solar panels add value to your house?

• The ATO’s ‘hit list’ for small business owners.

• How to deal with ‘get rich quick’.

• Why Aussie beef prices are surging.

• Self-made vs inherited billionaires.

The RBA Governor on what’s driving house prices

Reserve Bank Governor Michele Bullock fronted the Parliament Economics Committee this week, where she was questioned on a wide range of issues.

Notably, she was firm in stating that interest rates are not the primary driver of house price growth.

She was asked by Allegra Spender, the MP for Wentworth, if housing supply was keeping up with demand and if new policies from the government, like the 5 per cent deposit scheme, would add to higher prices for houses.

“Yes, you’re absolutely right, it’s a supply issue and are we close to meeting it? All estimates suggest we are not,” Ms Bullock answered.

She also said the way Australians were using existing supply was adding to the issue:

“Demand for housing is new households being formed and the size of the household, and we’ve had declining household size.

“Supply is an issue but demand is impacted not just by the number of new households being formed but the average household size,” she explained.

As such, the RBA does not forecast government schemes will put more pressure on housing, even though it adds to demand.

RBA Assistant Governor, Brad Jones, told Ms Spender:

“At the very margin, you may see a little more upward pressure on house prices in the short term, recognising that first-home buyers account for about 20 per cent of the flow of new housing credit.”

“The Treasury has also done some work on medium-term supply response, and their sense is that we will see, over time, an uplift in supply in response to that extra demand as well, and so that will end up dampening the price effect over the medium term.”

The lack of housing supply is impacting auction rates

The shortage of housing that Michele Bullock is talking about has seen a big jump in homes onto the market (it’s peak selling season) - and they are being snapped up.

Capital city homes that were auctioned last week were at the highest weekly volume since the first week of June and a solid 11.4 per cent rise from the week prior. According to property research group Cotality, the preliminary auction clearance rate rose by 3.1 per cent to 77.9 per cent - the capital’s highest early clearance rate since late October 2021 (78.9 per cent).

Melbourne recorded a preliminary clearance rate of 78.6 per cent, its highest since the week ending October 24, 2021. In Sydney, there was an 11 per cent increase in homes taken to auction, with a 77.9 per cent clearance rate - the fourth-highest early success rate so far this year

Two big tips for first home buyers

One of the people at work is buying her first home with her partner and, being the finance nerd I am, we’ve been chatting through each stage of the process. It started with saving the deposit, then getting finance approved and negotiating the price now that they’ve found a property that fits.

And while none of these stages has been especially easy, there are two things we’ve talked about more than anything else: How to approach a counter offer and whether to lock in a fixed rate.

So for anyone else going through the same process, I thought I’d share my advice.

1. Count on counter offers

A lot of first home buyers are pretty stretched when they hit the well-worn home inspection track. In search of the dream home, this often results in placing bids that are pretty well at the limit of their finances. And when faced with a counter offer, the bidding can quickly become an emotional decision, not a numerical one.

This can be a devastating mistake to make.

It’s easy to think an extra $5,000 is relatively loose change compared to the $500,000 you’re about to spend, but the bank and your wages will say otherwise. At the end of the property hunt, whether for an investment property or somewhere to live in, the mortgage needs to be manageable.

This advice might sound pretty obvious, but the number of people who contact me in trouble after bidding beyond their means just blows me away. As a rule of thumb, mortgage repayments shouldn’t exceed 30 per cent of gross income and an interest rate buffer of at least 2 per cent needs to be factored in for future movements.

As I’ve reiterated to my colleague, the numbers absolutely must work to push the button on another bid. If they don’t, then walk on to the next inspection.

2. Fixing the interest rate

The reason a lot of people don’t allow for that interest rate buffer and end up in trouble is that they’re able to lock in a great fixed rate now, plug 5 per cent into the mortgage calculator and think they’ll be okay.

Unfortunately it’s not that simple.

After that fixed rate period finishes the loan is subject to whatever the going interest rates are at the time.

While I’m not saying mortgage rates will jump back up there any time soon, the financial world has a knack of returning to long-term averages, so plan on paying higher rates later in the life of your mortgage.

Of course, the basic numbers you crunch must also include costs like council rates, water and maintenance.

As to how much of a loan to fix, I’ve always gone for a bit of both to be safe. Neither fixed nor variable is risk-free as rates always move and your circumstances can quickly change, making one loan more suitable than the other.

The key to making the decision is to do some research, form an opinion on where you believe rates are headed and structure the loan accordingly.

In my opinion, fixed rates won’t go much lower than they are now, unless we stumble badly into recession. Even if the Reserve Bank cuts again this year, as some economists are tipping, it is unlikely fixed rates will be reduced by too much. And trying to pick the bottom of any market is a mug’s game.

As with any financial product it is also crucial to read the fine print and find a loan that fits your circumstances. This way you won’t discover hairy terms down the track or be sitting around wishing you’d done one thing and not the other.

Stay calm and considered

Again, it is crucial you are comfortable with the decision.

It can be very daunting buying your first property, but a very exciting time too, so crunch the numbers, remove the emotion and do the research to make the decision a smart one.

The AFL Grand Final of property values: Geelong vs Brisbane

Property giant, Ray White, have released a fun comparison between the Geelong and Brisbane property markets ahead of this Saturday’s AFL Grand Final between the Lions and Cats.

Both Geelong and Brisbane represent two of the strongest connections between sporting success and real estate performance. Both teams arrive as genuine Grand Final contenders, but their property stories reveal which city has already claimed victory.

The Lions' transformation under Chris Fagan mirrors one of the most dramatic property turnarounds in recent memory. Between 2005 and 2018, Brisbane averaged 13th on the AFL ladder, while the city's housing market crawled along with just 18 per cent growth over 14 years.

The team was mediocre, the city's confidence was flat, and property investors looked elsewhere.

Then everything changed.

As the Lions roared back to relevance with preliminary finals, grand final appearances, and now another shot at September glory, Brisbane house prices have exploded 107 per cent over the past six years.

When your team consistently delivers September thrills, your city becomes more attractive, more confident, more valuable.

The Cats have written the playbook on how sporting excellence drives property growth.

They have had sixteen top-four finishes in the last 20 years, including premierships in 2007, 2009, 2011 and 2022 - helping to transform Geelong from industrial town to a lifestyle destination.

Each September run also brings national media attention and each premiership delivers civic pride that attracts investment and tourism.

Football success has became inseparable from the city's economic development story, with the team serving as the city's best marketing asset for attracting the population and investment growth that’s powered property appreciation.

The connection runs so deep that when the Cats had their worst season in decades (12th in 2023), property prices dropped 3 per cent, one of only two declines in the past 20 years.

When Geelong struggles, the market notices.

Here’s where it gets interesting. Since 2018, Brisbane house prices have surged 106 per cent compared to Geelong's 35 per cent. Even more telling: Brisbane's membership has tripled from 24,867 to 75,115, while Geelong's grew just 44 per cent to 92,379.

This season alone, Brisbane added 18 per cent more members while Geelong had just 1.7 per cent growth.

Geelong may still be pulling rank on the field, but they're stagnating where it matters most: community engagement and market confidence.

Brisbane brings explosive momentum from a city rediscovering its sporting soul, while Geelong represents a mature market that's already captured most of its upside.

The data tells the story: Brisbane has already won where it matters most. Saturday's game? That's just the victory lap.

Do solar panels add value to your house?

Homes with solar power systems are valued at around 2.7 per cent more than comparable homes without, according to a new report from Cotality. That equates to an average uplift of approximately $23,100 at a national level.

The findings, from ‘Watt's it Worth: Quantifying the value of solar and energy efficiency ratings in real estate’, highlight how energy performance is becoming a key factor in how properties are appraised, financed, and sold.

The research comes at a crucial time for Australia, as rising energy costs and growing consumer awareness place a spotlight on the financial benefits of energy-efficient homes.

The report, which is developed in collaboration with Proptech Australia and welcomed by Commonwealth Bank (CBA), analyses more than six million homes and reveals a clear link between energy-efficient upgrades and property value.

The study found a consistent price premium associated with the presence of solar power systems, a highly visible and widely adopted home upgrade.

Regionally, the impact varies significantly, with the highest percentage uplift seen in Regional Northern Territory at 6.9 per cent, or about $31,350.

In dollar terms, the uplift for a home with solar ranged from $14,093 in Adelaide to $30,459 in Hobart, reflecting buyer demand for energy-saving features.

Australian Tax Office’s ‘hit list’ for small business

Each year, the ATO sets out its compliance hotspots, and for FY25, small business owners are firmly in the spotlight.

According to small business site, SmartCompany, top of the list? Director loans (Div7A). If you’re dipping into company funds for personal use without the right loan agreements in place, expect scrutiny. Many business owners still blur the line between company and personal money, and the ATO wants to clamp down.

Contractors are also under the microscope, with a focus on unreported income in industries like construction, cleaning, courier services, IT and security. If your payments don’t match what’s in the ATO’s data, you could face penalties.

Finally, businesses with a track record of late or inaccurate BAS reporting may be moved from quarterly to monthly GST reporting for at least a year.

The takeaway? Tighten up your processes now. Staying compliant means less stress and fewer surprises. Because let's face it, no one wants the ATO to come knocking on their door.

Sometimes, people do get rich quick: 5 ways to navigate it

Selling a business, receiving an inheritance or picking the trifecta on the Melbourne Cup can all result in an unexpected windfall.

But working out what to do with the money is not always simple. There are so many options out there and no one wants to throw it all away doing something stupid.

So if you ever find yourself in this situation, here are five tips to take on board.

1. Learn about tax

Depending on the situation, there could be tax implications associated with your newfound wealth.

To avoid getting lumped with an unexpected tax bill, make sure you understand what these are before making any decisions about what to do with the money.

If there is tax to pay, set aside enough cash to cover it immediately, and if you’re not sure then speak to an accountant.

2. Park it, before you know what to do with it

Once tax is sorted, it could be tempting to start spending right away, but a smarter option is to sit on the money and take stock.

It may not seem like it now, but it’s actually possible to blow all that cash, just ask Englishman Michael Carroll:

Carroll won £9.7 million at the tender age of 19 playing the National Lottery, then proceeded to blow it all on a rock star lifestyle of partying and excess until he ended up on government handouts eight years later.

That’s an extreme example, but there are plenty of cases where otherwise reasonable people have squandered incredible opportunities through traps like high risk investments, gambling or general financial incompetence and excess.

So why not put the bulk of the cash into a high interest savings account or term deposit and take the time to consider what you actually want to do with the money.

3. Pay down debt 

It’s not as sexy as a new car, but paying down debt is one of the smartest things you can do with some of that extra cash.

For example, paying off a chunk of the mortgage early can save tens of thousands of dollars in interest payments over the life of the loan. And while Australia seems to have an enduring love affair with credit cards, they’re racking up interest at over 17 per cent, so it makes no sense to leave it sitting there.

Debt is a drain on income and the sooner the slate is wiped clean the sooner you can start putting your money to work, which brings us to the next tip ...

4. Seek professional advice

Most people aren’t used to dealing with large sums of money, which is why it makes perfect sense to see a financial adviser in this situation.

An adviser will be able to put a plan in place to maximise the benefit of your windfall and help deal with complex issues such building retirement savings, responsible investing, insurance and estate planning. And it’s not just the boring stuff either. If your heart’s set on a new car or you’re looking to buy a bigger house soon, they can build that into the plan too.

5. And finally … be careful who you tell

People do funny things when money is involved. Even seemingly close friends and family members can have their judgement clouded, while some people are just downright greedy.

This can be compounded if you look to share your money with anyone, for example a gift to a struggling sibling may be misconstrued as a free-for-all by the extended family. While ultimately it’s your decision, think twice before posting a Facebook update about your good fortune, and make sure you trust the people you decide to tell.

Aussie beef prices surging

Australia’s beef industry is thriving, and US tariffs are barely making a scratch.

Meat and Livestock Australia’s (MLA) ‘Processor Cow Indicator’ - a weekly market measure tracking the average price paid by processors for cows - hit a record 390 cents per kilogram. This is up 32 per cent over the year. In August, exports were 44 per cent above the five-year average, marking the second-highest single-month volume on record.

The US remains Australia’s biggest export beef market, taking about 30 per cent of exports, and year-to-date shipments to the US are up 22 per cent despite the new tariff environment.

While Trump claimed his tariffs would level the playing field, US Department of Agriculture forecasts show US beef imports rising 15.7 per cent in 2025 as American producers struggle with low herd numbers, pushing domestic prices higher.

Inherited vs self-made billionaires

Having a net worth of over a billion dollars is a lot of money. But I have more respect for those who built that wealth through their own hard work and entrepreneurial spirit than those who inherit it because someone else did all the hard work.

This graph below shows 69 per cent of Aussie billionaires are self-made and 39 per cent are inherited. But look at the UK, where you might think most of the wealth would be inherited. Nope, 89 per cent of British billionaires are self-made which is even more than the US.