Footy’s over - now kick an auction goal
For most Geelong residents, the shine of footy season faded weeks back when we had our hearts broken by Richmond.
Even though last weekend hosted the AFL Final, it was really just a filler for Cats fans waiting for their second favourite sport - property - to kick off.
It’s no surprise the long weekend for the Final is one of the quietest for auctions activity, statewide. If you’re into property, it’s considered the ‘bye round’.
And the break was fortuitous for bidders. With the Reserve Bank of Australia dropping the cash rate to 0.75% this week - the lowest level we’ve ever seen in Australian history - bidders can show up at auctions this weekend with a newfound outlook.
What do RBA cuts mean for you?
This week’s cash rate cut represents the third 0.25% cut by the RBA since June.
We’re now looking at many owner-occupier home loan interest rate products with fixed rates (principal and interest) in the very low 3% bracket - and even the high 2% - dependant on the lender. (The average standard variable rate is closer to 5%).
All this follows on from lenders lowering their minimum serviceability tests - an opportunity brought to the table by APRA a couple of months back.
Granted, not all lenders are passing on cuts in full, instead opting for between 13 and 20 basis point cuts (0.13%-0.20%).
For those that can get the full 0.25% cut, that represents a saving on a 30-year, $400,000 mortgage of close to $700 a year.
Debt serviceability has never been better in Australia!
However, the response from lenders has been erratic in assessment terms. I’ve had some clients receive conditional approval within 24 hours whilst others have been subjected to onerous paperwork and clarifications from other lenders. You need to find a broker who is across the landscape to provide a smooth process that leads to an outstanding outcome for their personal situation.
Where are the property hotspots?
Locally, Newtown has recorded high volumes of activity over the last 12 months, according to CoreLogic. The suburb’s median house price has held steady over the past year, finishing at $803,500 in August.
Out in the First Home Buyer territory of Norlane, there’s been a tonne of activity: 182 sales for a median of $350,000.
Down at Ocean Grove, upgrading families have been proactive with turnover in the last year sustainably matching listings volumes. The median house price has remained around $670,000, declining only 0.7% over the year - not a bad result when a property has changed hands almost every day over the year.
And at the prestige end, Lorne’s popularity hasn’t wavered. The median house price increased more than 15% in the last year in the tightly-held community to $1.1m.
Get yourself ready to bid at auction
So, you’re ready to kick an auction goal this weekend. What do you need to do?
Auctions are an unconditional method of selling property. If you’re the last one to raise the paddle, you’re taking the keys!
Spring is the peak buying season, but it really ramps up from here-on until Christmas.
So much has changed in the last six months: an unexpected Federal election result; APRA easing the minimum testing for home loan serviceability; and three interest rate cuts.
You need to be pre-approved to bid for certainty and security. This lets you know what you can borrow and what your ceiling is for bidding (of course, only aim to borrow what your research shows is the property’s market value).
A quality broker won’t just find you the lowest rate; they’ll find you a product that suits your short, medium and long-term property objectives.
They’ll also get you ‘bid-fit’ by recommending strategies to consolidate debts, refinancing to better products or repricing with your existing lender. They will do everything they can to give you the necessary edge over your competition.
We do all of this and more at Loan Market Geelong. Get in contact with us today to get bid-fit for auction season, here.
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