Are You an Existing Homeowner with a Home Loan?
If yes, you need to read my last month article on how to look after your Home Loan.
As I write this column, it is 25th September and on 29th September, we have our next RBA meeting.
At this stage, all four major banks are predicting a rate rise.
In Short
- Market correction, not a crash: While inflation and high interest rates continue to impact serviceability, the property market is experiencing a cyclical correction, presenting excellent opportunities for long-term buyers.
- Upgraders have the upper hand: According to recent market data, the price gap between mid-tier and premium properties is shrinking, giving local families strong negotiating power to upgrade their homes.
- Support for new entrants: First Home Buyers and eligible single parents have access to low-deposit government schemes, while the Family Guarantee helps others enter the market using the "Bank of Mum and Dad."
So, here’s what is happening with the Market:
- Inflation is still high.
- Interest rate is high and it is impacting serviceability.
- War in the middle east.
- Housing affordability is still at its lowest.
Things that have not changed:
- We are still in housing supply shortage.
- Migration is strong; hence demand is there.
- Property is a long-term Investment.
Now let’s look at some data. According to the ING Bank, 83% of Australians are feeling the pinch of cost of living.
On the same side, 64% are feeling positive about the year ahead.
So, what is happening with property prices? Every newspaper is talking about a price crash.
Property, as we know works in cycles. Yes, we are in cycle of price correction but not crash.
Below is a graph showing property values across capital cities in Australia for last 30 years.
The bottom line is that if you’re in it for the long game, now could be an excellent time to purchase a property. With more properties available and stronger negotiating power, buyers are well positioned to secure a great deal.
So, what are the next steps?
- First Home Buyers – Check Housing Australia Website for schemes you are eligible for Australian Government’s 5 percent deposit scheme
- Single Parents – Eligible single parents may be able to enter the property market with as little as a 2% deposit, subject to meeting the lender’s servicing and eligibility requirements.
- Family Guarantee – Also known as the “Bank of Mum and Dad”, this option allows a family member to use the equity in their property to help support your home loan application and reduce the deposit required.
Ready to explore your property options? Reach out for a no-obligation chat with Veenu Bharara to create a tailored plan for your home loan goals on the North Shore.
