Happy Holidays - A New Decade Awaits

Well 2020 will certainly be a year to remember, not so much for housing and interest rate stuff but for the global COVID 19 pandemic which has affected just about every country on the planet, some with seriously grave results compared to ours here at home. 

Though enough of that! In the spirit of keeping this month’s newsletter a bit more festive and positive, how about looking at interest rates in 2020? What a way to finish 2020 with the all-time low cash rate of just 0.10 percent!!!

So how cheap is money today? When you consider that in 1988 there are so many of us who remember having home loans and paying anywhere from 17.1% to more than 21% on our home loans, today’s interest rates are phenomenal. Yes granted, properties back then were considerably lower in cost to buy, yet relative to our wages and income levels that were also a lot lower than today. 
 
Movement in the Market

On 1st January 2020, the new government incentive to help first home buyers into the market came into effect. Very quickly, many incentive placements were taken up by two major lenders, and whilst there were many first home buyers who managed to get into the market, many more found the proverbial door closed, simply because they could not take advantage of this appealing incentive.  Yet, we have still been absolutely inundated this year with first-time buyers and other established buyers keen to invest further in property. Whilst all the ‘experts’ were declaring a property market crash as a result of the pandemic, it seems in reality almost the opposite has occurred, with values and prices holding steady in many areas, especially with inner city and middle-ring suburbs and with the more unique properties. This trend looks to continue well into 2021 and hopefully beyond. Rental yields on the other hand have taken a battering with a significant upward swing in vacant rentals and landlords lowering their expectations in regards to rental return.
 
Our Year in Review

At VFS, like many of us, we had to deal with the ongoing challenges that the pandemic brought along with it. We carried on helping borrowers take control of their finances and save money ensuring the right home loan package in place at the right rate. We have helped many young Australian families purchase their first homes, helped up-graders prepare to sell and acquire their next property, financed new home constructions and assisted investors in improving their overall financing portfolio. It’s been another busy year and we have loved every moment!

The most commonly asked question throughout 2020 was ………

When will the cash rate get to zero?

The standard answer was …..

We don’t believe it will, but then we never thought we would see rates this low in our lifetime!

We would like to take this opportunity to thank all of our borrowers, investors and partners throughout 2020 for choosing VFS and for your continued support. We wish everyone a COVID free, warm and prosperous festive season filled with love, laughter and fun times. May 2021 bring a buoyant COVID recovery for everyone and may you all enjoy good health and happiness.
 
And most importantly, just as we do at the end of every year as the new year approaches, a gentle reminder to make time to get your finances in order. Please call me on 0438 041 111 or even email me peter@vinci.com.au to arrange a confidential discussion early in the new year and get the ball rolling.

Please enjoy our articles this month … riveting reading for all!

As always, enjoy life, work hard, play safe and remember that we are always here to help you
 
‘Take the Confusion Out of Lending’ 

All the Best

Peter Vinci - 0438 041 111