Happy Holidays - Time to Relax

It was this time last year that we wrote how there was literally no interest rate movement from August 2013 through to the end of 2014, with many analysts predicting a rate rise around March-April of 2015.

Well, did they get that wrong!

The year 2015 started with a bang; a 25-point reduction in February, taking the cash rate to an all-time low of 2.25%. A further 25-point reduction in May brought the cash rate down to just 2.0%.

Looking back over the last 12 months, property continued to hold its own, with a booming spring selling season for real estate agents and positive Melbourne metropolitan housing values being sustained – likewise in many other capital cities. Auction clearance rates seemed to keep
getting higher and higher until around late October when they started to slow - by mid-November, we saw clearance rate levels adjust as well as pricing corrections starting to take place in various pockets around Melbourne.

Amongst all this activity, we have been able to assist many new borrowers get into their first home, numerous upgraders move suburbs to suit the needs of their growing families, downsizers re-invest to locations more suited to their preferred lifestyles and investors restructure their portfolios to take advantage of the all-time record low interest rates on offer.

It has been a busy year indeed!

The most commonly asked question through the year was “when will interest rates drop again?”

The standard answer was “we don’t think they will; we are expecting a rate rise very soon”’

New legislation introduced in July caused banks to re-evaluate their investment lending, resulting in interest rate rises despite the Reserve Bank keeping the official cash rate on hold. These bank
rate increases started to take effect very quickly, causing many investors to re-structure their portfolios and lock in rates whilst they remain within a low range. With the majority of lenders having now increased their interest rates by anywhere from 15-40 points, 2016 is sure to see more corrections in various suburban pockets, and it’s likely that numerous off the plan projects that have just commenced (or are about to), will also be impacted. Having said all of that, we’re still very excited about new opportunities the coming year will present for prospective homebuyers and investors. Refinancing your property mortgage to a lower rate and fixing part of the borrowings are just some of the proactive options that may be available.

We would also like to take this opportunity to thank all of our borrowers and investors throughout 2015 for your continued support. We wish everybody a warm and prosperous festive season filled with fun times and laughter, and may 2016 bring you everything you could possibly hope for.

Please don’t hesitate to call me on 0438 041 111 to arrange for a confidential discussion and home loan health check or to get your 2016 real estate portfolio goals started

As always, enjoy life, work hard, play safe and remember that we are always here to help you

‘Take The Confusion Out Of Lending’

Peter Vinci - 0438 041 111