It’s official: the Australian property market is poised to make a strong comeback. With a positive spring looming and the biggest price drop in property in the past 15 to 20 years, now is an optimal time to purchase a property.
Here are the August headlines that all point to a stellar spring if you’re in the market for a new home.
Homebuyer confidence has hit its highest. Australians took on nearly 2% more loans for properties in June than they did in May. Financing for owner-occupiers jumped 2.4% to $12.4 billion. June was also the first time that lending commitments increased for investor and owner-occupier properties in more than a year.
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The Reserve Bank of Australia (RBA) has decided to maintain the cash rate at 1% as it waits to determine the impact of June and July’s consecutive cuts on the economy.
Obtaining a home loan is now much easier, thanks to the relaxing of one of their financial tests: the serviceability assessments. National Australia Bank (NAB), ANZ, Westpac and Commonwealth Bank (CBA) reduced the percentage rate used in this test. Previously, banks were required to use an interest rate of at least 7% to determine if people could still pay their home loan in the event of an interest rate hike.
The minimum rate was removed, and APRA now recommends that banks add a buffer rate of 2.5% or banks can determine their own rate for serviceability.
Continuing a string of high clearance rates that had been 72.8%, Sydney captured the title of the best-performing capital city after it jumped to 78.2% – a two year high. Sydney was also the location of the highest resident sale of the capital cities with a home bringing in $4.01 million.
It’s evident that now is the ideal time to purchase your dream Australian property. Speak to an expert at Shore Financial today to lay the groundwork for this life-changing decision.
Disclaimer: This is general information only and should not be taken as financial advice. Please speak to a Shore financial planning professional before making a decision on your home loan.
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