What You Need to Know About the Property Market
What a difference a couple of weeks does in the property market!
Firstly - stop the press - Liberals won the election! Whether you loved or loathed the outcome, the election results have since cascaded into a truckload of positive changes that will have a significant effect on your property investing. Here’s a quick summary…
APRA have declared they will abandon their 7% assessment rule, allowing banks to dictate their own risk levels on interest rates for their borrowers. In real terms, this means we all should be able to borrow more.
Labor’s policy to remove negative gearing and reduce capital gains exemptions has been scrapped and will not see the light of day for some time to come. This should give investors a lot more confidence to return to the market.
The First Home Buyer Deposit Scheme will be introduced by the government, effectively allowing first home buyers to buy with a 5% deposit without the burden of Lenders Mortgage Insurance. This should stimulate the lower end of the market.
As of Tuesday, the RBA has signalled a rate cut to 1.25% to stimulate the market, with the potential for another before the year is out. Should the cut be passed on by the banks, this directly reduces the holding costs of anyone with a mortgage.
At this point you’re probably thinking that the market is getting back on track, markets are about to kick off again and all is right with the world. Well, not quite. The truth is that it takes time for all these great changes to take effect – for people to arrange to see their broker, to get their paperwork in order, to submit an application and even to find the right property to make an offer on. Despite best intentions, life just gets in the way and stuff like this takes time to organise. The way I see it, by the time all these positive changes work through the system we’re going to be in February of 2020. Now if you haven’t spotted the opportunity, let me line it up for you.
Market pricing has deflated to the tune of 10% - 20% in Sydney and Melbourne depending on where you’re buying.
Consumer sentiment is improving, but it will take another 3 to 6 months for buyers to bring more money to the market.
The crossroads of these two events - the gap between the market bottoming out and buyers gaining both the confidence and credit to push prices higher – is your opportunity! You have a chance to buy property at a price that you may never see again in your lifetime, at a time when most of your competition is still sleeping. If you want to talk about how you can take advantage of this moment in time, schedule in a quick call with me on 0414 708 091 for a free strategy consultation!!