The property market in Australia has seen wild times recently. In the last decade, we have seen Australia enter some less than desirable top 5 lists and the dream of home ownership was looking like a distant memory. The bubble kept getting bigger, with some experts declaring the end is nigh. There is still much debate as to the nature of this “bubble” and investor have been getting nervous at even the mention of a collapse.
Other experts, however, insist that instead of an apocalyptic crash, we will see a controlled and calm deflation. Whatever happens, one thing is certain, now is a better time for someone looking to purchase a property. What better place to start than to compare Competitive Mortgage Interest Rates. Just make sure your credit history is free from issues and make sure you don’t have Midland Credit Management on your credit report, for it hurts your home loan application.
Sorry To Burst Your Bubble…
Many economists and speculators have warned of an impending crash with house prices at historically disproportionate levels to average rent and wages. As of 2014, this trend was noted globally with many developed nations experiences similar surges in pricing. A variety of factors contributed to this bubble. The main contributors being shady practices employed by Banks and lenders, a tax system geared towards investors and government restrictions on land supply and development. If the market was to “burst” we could see some devastating consequences, with predictions of a stalled economy and widespread bankruptcy in homes. On the upside, the market would become a buyers’ market, meaning the demand for homes is low, this will see a decrease in land value. Someone looking to buy in these conditions would get a very good deal compared to today’s prices.
It’s All Good
Despite the hellish specter of a market crash looming on the horizon, many signs point to a slow correction instead. A tightening of lending standards following royal commission in 2017 and more land becoming available seen a small downturn in prices for the first time in over a decade. As of 2019, it is reported that capital cities have experienced a small and stable decline in house prices. Some economists predict a stabilization of house prices in relation to wages and average rental rates.
Regardless of the outcome, visit your local Newcastle Permanent Building Society representative and find out how they can help you take control of your economic future today.
Now What?
So, is it worth getting a home loan now? Mortgage rates are still incredibly low, and the RBA has opted to freeze this rate for the next few years at least. As a first home buyer you have access to some considerable rebates from the Australian government, and as an investor, you have some almost unbelievable tax breaks. The market seems to now be in decline so you may be able to get into the market at a favorable price.
On the opposite end side of the coin, we may still yet experience a crash will bottom out the value of your new home and may even send you into negative equity. It is an exciting time for Australians, with a reprieve from soaring house prices the dream of home ownership is looking to make a comeback. While an apocalyptic burst has seemingly been avoided, it is not impossible and should give you some pause to the idea of taking out a home loan.
Do your research before committing and weigh up your needs and means thoroughly. Mortgage interest rates are still extremely low and buying now could ensure you enjoy the benefits of our tax system before they are changed or adjusted. Buying during a dip could be well worth it as prices could very well stabilize and in the future experience more growth.
