June 19, 2019
Only a few months ago it seemed that rates couldn’t get any lower, then things changed and the RBA dropped the cash rate to 1.25 per cent. The major banks have reduced their variable rates to differing degree ranging from 0.18 per cent to the full RBA cut of 0.25 per cent. Smaller lenders have also passed on cuts across their home loan rates. While there is speculation of another cut this year, competition amongst buyers could start to heat up which could stimulate the property market. Mortgage brokers Armando Iodice and Phillip Stabile believe that hopeful property buyers need to take advantage of this window of opportunity before the real rush starts.
What’s currently impacting the property market?
So far this year we’ve seen a very interesting set of events unfold. There was an early Federal Budget announcement, the Federal Election in mid-May, and then the historic rate drop by the RBA in June – the first drop in almost three years. Buyers and sellers have been understandably cautious with property decisions and many have been waiting for the dust to settle.
With the Election over and The Morrison Government taking out a surprise win, there’s more certainty as to what may happen next. This Election result, along with the interest rate cut and lenders passing it on, we may begin to see buyers taking action that wasn’t seen in the earlier half of 2019.
As well, APRA has recently made recommendations for lenders to lower the serviceability buffer on home loans (the requirement that borrowers had to prove they could service a home loan interest rate at 7 per cent or above), which we expect lenders will begin introducing. This could make it possible for borrowers to be approved for thousands of dollars more than they have in the last few years.
The combination of this lower serviceability criteria, along with dropping rates and more political confidence means that the conditions to purchase property now are better than we’ve seen in some time.
Why keen property buyers need to act now
Mortgage brokers Phillip Stabile and Armando Iodice know from experience that there’s a window of opportunity when market conditions improve, but that window won’t be open for long.
Right now, there are plenty of properties up for grabs and prices in many areas are still lower than they’ve been in years. However, with improving borrowing conditions, the competition between buyers could start to heat up and prices may start to rise.
If you’ve been thinking about purchasing property but have been waiting on the perfect conditions to make your move, Phillip and Armando at Mortgage Choice in Liverpool recommend that depending on your goals and position, this could very well be as close to perfect as you get.
Find out if this is your window of opportunity to purchase property
While everyone’s circumstances are unique, it is clear that the conditions for buying property are improving. Rates are low and potentially dropping further, borrowing capacities will likely increase and property prices are still low in many areas – but for how long and how many other buyers will you have to compete? Now is the time to act and make your property goals a reality.
Contact Phillip and Armando on 02 9601 4333 today or visit our Homepage, fill in the ‘Contact us’ form, and we’ll call you to discuss your home lending needs.
