Happy New Year – RBA No Change to Cash Rate
The official RBA cash rate remains at just 1.50% as of the start of the new calendar year. Many economists have been actively talking doom and gloom with interest rates rises on the horizon, others have been more realistic, predicting ‘steady as she goes’ as the most logical and likely way forward for the short- med term. Our view remains unchanged – it is still the best time to borrow money with rates well under 4% for owner occupied home loans, so what are people waiting for?
The Market 2017
According to RP Data, the December quarter saw housing fall slightly for the first time since April 2016 with a combined national drop of just 0.3%. Of the capital cities, Hobart recorded the best growth YOY with around 12.3% up on 2016 (Dec to Dec) and Melbourne second place at 8.9% growth. Darwin and Perth saw downturn in market values whilst overall nationally YOY, we had a 4.2% growth, so the real estate sector is still traveling along positively.
We have experienced strong enquiry early in the year for first home buyers and family support applications. Many borrowers approaching their banks first have reported inconsistencies with lender policy and we have also heard of loan approvals being reversed by lenders after initial approval had been obtained. This could be the result of stricter lending guidelines handed down by the regulatory bodies, causing lenders to err on the conservative, cautious side.
For the year ahead, signs indicate rates will remain at very affordable levels and the market will continue to move in an upwards trend albeit at a slower pace with certain over-exposed suburbs most likely moving into a downward trend. The key is to be informed and buy well, especially if considering a property purchase in emerging residential estates or new, off the plan developments, where it is important to not get caught up in the marketing hype to bid or buy without doing your due diligence first.
Early in the new year is also the ideal time to review your current home loan and whether you can get a better deal to save on interest through refinancing. Please call me on 0438 041 111 to get your refinance discussions underway, as all indications show it’s highly unlikely the RBA will reduce rates any further in the near future (our opinion, without a proverbial crystal ball)
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