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After months of flatlining, property prices have registered their first increase in five months. Lender support, along with Government incentives and stimulus packages, have successfully cushioned the property market from adverse impacts of the pandemic.
Experts opine that as we get better at dealing with the pandemic and containing new COVID cases, economic activity will gradually begin normalising. So, what does this mean for property buyers? Here are a few parameters that make it the most suitable time for financially secure first home and property buyers to make a purchase.
A recent Nov 2020 CoreLogic report observed a 0.4% increase in national property prices in Oct 2020. Based on the resilience shown by the property market so far, most realtors believe that as economic activity begins to bounce back property prices are only expected to rise further fuelled by low-interest rates, government incentives and growing consumer confidence.
With multiple RBA rate cuts, the most recent cut on Nov 3, 2020, bringing down the cash rate to a historic low of 0.1, it is unlikely that interest rates will drop further. Some lenders have already begun to revise their fixed rate offering. This is, therefore, the best possible rate that borrower looking to buy property can get.
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Government Schemes and Incentives
There are multiple schemes and incentives at the federal and state level for property buyers. Engage a mortgage broker to understand what schemes are likely to benefit you. Some schemes have a fixed number of places and a long processing time. Rely on professional help to prepare accordingly.
Lender risk aversion
Despite the economy gradually beginning to recover, there still are many households that continue to defer their home loan repayments. It is also unlikely that sectors like international travel or tourism will recover any time soon. Lenders are therefore very cautious about dispensing home loans and are vying for the business of the financially secure. So, if the pandemic hasn’t adversely impacted your finances, this is the best time to find yourself a suitable home loan with a good rate and great features.
A financially secure buyer’s market
A lot of prospective buyers that have been financially hit by the pandemic have postponed or dropped their decision to make a purchase. If you continue to be financially secure, you will probably face significantly lesser competition as a buyer. Additionally, many sellers in the market are looking to achieve financial respite through a property sale, putting you in a favourable negotiating position.
With property prices gradually moving up and experts expecting a gradual rollback of government support, this window of opportunity for property buyers, especially first home buyers to make a move may close soon. If you are looking at making a purchase, use professional guidance to make the most of current circumstances. Act quickly and make informed decisions with the assistance of a mortgage broker.
Reach out to us for the best way forward as per your circumstances.