How affordable could Australian property become?
Property buying can be something that many people only ever dream about. That shouldn't be the case, though, and here at Cohen Handler, we think it's the most important purchase you'll ever make.
That's why we offer a service that can take all of the stress out of the journey – our buyer's agents are there to hold your hand through the process of buying the perfect property. That includes the price. But how is the Australian property market predicted to change when it comes to affordability? Well, not a whole lot in the near future. But that's just another indicator that you should have a buyer's agent on hand to help you get the best possible price for your next purchase.
Is the cash rate even important at the moment?
The cash rate is the amount that lenders borrow from the RBA at, meaning a lower rate would reduce the costs to lenders.
On April 5, the Reserve Bank of Australia (RBA) reported that the cash rate would remain at the record low of 2 per cent for another month at least. The cash rate is the amount that lenders borrow from the RBA at, meaning a lower rate would reduce the costs to lenders, hopefully translating into savings for those after a home loan.
That's not always the case, however, as CoreLogic's Tim Lawless discusses below.
While capital city property growth is reportedly at its lowest point in the last 31 months, there are other conditions that can affect the RBA's decision each month. These include inflation and the success of the Australian dollar, which are both in a favourable position right now. That leaves room for a further cut to the cash rate later in the year, however this doesn't mean that banks and mortgage brokers will necessarily cut their interest rates as well.
That's why it's much more important to have a trusted mortgage broker who knows your situation and reliability, instead of waiting for a favourable cash rate cut. The cut might come, but it probably won't change your ability to have cheaper repayments.
That being said, the cash rate does have an impact on property prices. This was seen in February and May last year after market stimulation was recorded on the back of cash rate cuts.
Property prices more likely to remain the same
Property prices most likely won't jump around too much with a change in the cash rate – in fact, history teaches us that a drop might actually push the market further upward. That could mean a property you had your eye on could soon be pushed out of reach, so it's important to act while you can!
While the market is stable, will you make your move and step onto the property ladder?
The capital cities have gone through slight changes over the last month alone, as the CoreLogic RP Data monthly indices point out. Sydney's median house price, for example, has shot over the $1 million mark and changed by 1.05 per cent. In the Melbourne market, however, there was a 0.52 per cent drop to $821,340. Both of these percentages are very low, albeit in different directions. The only real outlier in terms of price change was Darwin, seeing 2.62 per cent growth to $541,600.
While the market is stable and the cash rate remains unchanged at the historical 2 per cent low, will you make your move and step onto the property ladder? A buyer's agent will help, and their specialist market knowledge and great industry relationships can work in your favour to really nab a bargain. No matter what your price ceiling is, savings are always going to be welcomed.
Give yourself the best chance of experiencing this and get in touch with the team at Cohen Handler today. Don't wait for the market to change again – it might not work in your favour.