If you’re looking to be an owner-occupier, now might be a good time to buy, as suggested by a combination of a three recent figures.
1. The low cash rate
The Reserve Bank of Australia’s cash rate has been held at its record low of 2 per cent for the fourth consecutive month.
Why is this good? Banks borrow at that rate, so if the cash rate is low, the interest rates they charge you when you take out a home loan should be low as well.
A low interest rate is good for borrowers as it allows them to pay less to finance their loans, making it cheaper.
2. Higher building approvals
Between June and July 2015, the number of building approvals increased 4.2 per cent in seasonally adjusted terms, according to the Australian Bureau of Statistics.
“The rise in dwelling units approved will add further to strength to the pipeline of work yet to be done by residential builders with 223,000 dwellings approved in the 12 months to July,” said Peter Jones, chief economist of Master Builders Australia.
An increase in the number of homes available for purchase reduces the pressure exerted by the large demand in cities like Melbourne and Sydney. This means that prices will hopefully increase less as time goes on, making them more affordable.
Investor credit increased by 10.8 per cent in the 12 months to July 2015, according to the Reserve Bank of Australia. This may sound like a lot, but it is less than the yearly increase of 11.1 per cent in June.
3. Investor credit proportion is dropping
This is the lowest level it has been since March 2015, but it is only just at the beginning of showing a decline, so experts are warning not to conclude anything just yet.
However, this does look promising, as the Australian Prudential Residential Authority placed stricter regulations on property investment loans earlier this year. This was done to give people looking to live in their own homes more of a chance of being able to buy the property.
It looks like it is working, as other experts are thinking the housing market in Australia has finally reached its peak and has begun to level off.
You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.