MAKE THE MOST OF RECORD LOW INTEREST RATES
Australians who are planning to take advantage of the low interest-rate environment could be in for a real treat, with RBA keeping interest rates on hold at a record low 0.25% as the economy reopens. Let’s speak with our Melbourne Square expert, Ricky Li and find out what this could mean for you.
First Home Buyers
For first home buyers, an interest rate cut can have the effect of making it easier to get your foot on the first rung of the property ladder. After all, servicing a loan should become cheaper and for that reason, there is even a chance that you may be able to borrow more than you would have been able to previously. Lower interest rates would normally be a catalyst for an acceleration in housing demand and capital growth, however, there is less certainty that this will add fuel to the housing market in the current economic climate. With these record low-interest rates and multiple Government incentives, it is fair to say that there has never been a better time to purchase your first home.
Buying a Property
Westpac was the first of the major banks to react to the RBA’s interest rate move and pass on reductions to their borrowers. CBA, ANZ and NAB soon followed suit. For a mortgage size of $300,000 originally at 3.5%, that’s equivalent to $117 saving a month on the resided average interest rate of 2.76% as of April 2020. As we have seen, however, even better rates are on offer with banks. According to research by HSBC bank, Australian’s spend on average 2.5 hours a week looking at property. And it’s any wonder looking at the above, with the vast majority of Australia’s wealth tied to residential property. Homeownership is truly an Australian dream.
Following on from the 2019 Federal Election, negative gearing is still in place, credit is cheap and available. Teamed with tight housing supply and low building approvals, well-placed investors are on the hunt for suitable investments. As markets continue to settle and we come through the other side of Covid-19, the market will rebound as it always does after uncertainty and we will be met by the stimulus.
Want to know how Ricky can help you with your property goals?
Get in touch with him today!
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