A nervous wait on rates decision: 'this could hurt us'

SOME under-pressure conveyancers may quit the profession if the Reserve Bank of Australia hikes interest rates next week, according to industry leaders.

The RBA is widely tipped to lift the cash rate to 4.85 per cent next Tuesday as it continues efforts to get the upper hand on stubbornly high inflation.

The hike, if it occurs, is likely to further reduce buyer borrowing capacity, add to the ongoing property downturn, and weigh on national home prices.

Asked about the prospects of another rate hike, AIC SA president Matt Kelly said transaction volumes were already down around 15 to 20%, with buyers and sellers stalling on deals.

According to Kelly, “some practitioners are reconsidering their future in the industry”.

“Interest rates and broader economic uncertainty are contributing to the slowdown; however, this is happening at a time when the nature of the job is also changing, with increasing regulatory and compliance obligations,” he added.

Amid the uncertainty, Kelly said practitioners needed to adapt.

He urged practices to work hard to stay viable and sustainable “while making sure clients understand the value of the professional advice and support we provide”.

In Victoria, the state’s peak conveyancing body was bracing for impact of another rate rise.

AIC Vic strategy lead Shakila Maclean said she was certain there “will be fallout because obviously it’s just going to make it harder for people”.

Despite trying to take a “glass half full” attitude, Maclean predicted a “much quieter Christmas to what we’ve had the last couple of years”.

“It’s not as busy as it could be,” she said.

The silver lining, she said, was that more first home buyers looked to be getting into the market as investors stayed away.

She said that with property getting more affordable in some areas of the state, first home buyers could, in some cases, save tens of thousands of dollars on a home.

“We've recently had clients that were looking in certain areas, and they've ended up buying on the weekend, and I think they paid like $40,000 less than what they were planning.”

Over the border, AIC NSW president Jennie Tonner has warned that trade has slumped for many conveyancers, especially since the RBA’s latest rate hike in September.

She said some operators may “sell their business to someone else and go work in that business; they might do that, but I don’t think we’re there yet”.

“It’ll be those that have offices and those that have more than two staff that will struggle.”