Here’s a recap of where we have landed at the end of 2020 – and it’s all pretty good news!
- Consumer confidence is at a 10-year high, with the index rising for the fourth straight month to reach 112 in December.1
- Interest rates are at their lowest levels ever, with the cash rate likely to remain at 0.1% for several years.2 Lenders are offering some great deals, especially on fixed rate loans, so make sure you are taking advantage of what’s on offer. The savings available offer a fantastic opportunity to make additional repayments on your loan, saving you money in the long term.
- Big stamp duty changes have been proposed for NSW, with an annual property tax on property purchases likely to replace obligatory stamp duty. The Victorian government is proposing significant stamp duty discounts on eligible purchases until June 2021.
- HomeBuilder scheme extensions: A $15,000 grant is now available for contracts signed between 1 January and 31 March 2021. Application and construction deadlines have also been extended.3
- Tax cuts from the 2020 Budget will help most Australian workers, with savings ranging from $1080 to $2565 this financial year.4
- Loan deferrals are now largely back on track, with deferrals down by almost 70% from the peak in June.5
- Easier access to credit should follow the relaxation of responsible lending laws if the recommendation passes, meaning the loan process should be simpler and faster with less red tape and paperwork required.
- The value of brokers has been recognised as over 60% of residential home loans are now settled through a broker.6
- Property is doing well: According to REA Group’s executive director, Cameron Kusher, “the housing market has substantial momentum and I fully expect this momentum will be carried into early 2021 and potentially longer. The combination of ongoing restrictions on individuals’ expenditure, government stimuli, recent tax cuts and the lowest borrowing costs on record are likely to be positive for residential property.”
For what looked like being a disaster of a year, we have certainly come a long way!
SOURCES: 1www.tradingeconomics.com/australia/consumer-confidence, 2www.treasury.gov.au/coronavirus/homebuilder, 3www.treasury.gov.au/coronavirus/homebuilder, 4www.abc.net.au/news/2020-10-22/when-will-i-get-my-tax-cut-federal-budget-pay/12798620, 5www.ausbanking.org.au/majority-of-deferred-loans-back-on-track, 6www.theadviser.com.au/breaking-news/41061-broker-market-share-surpasses-60