Is buying a home or investment property on your list of new year’s resolutions? Despite the fact that most of the goals we set ourselves are quashed by the end of January, getting into the property market now could be one of the best decisions you’ll ever make. With the RBA setting interest rates at historical lows for 16 consecutive months, it’s not unreasonable to think that a rate hike is to be expected early this year however in actual fact, the probability of this happening is very slim.
So what can we expect from the market in 2018?
In all likelihood, the property market is expected to remain strong throughout 2018. With interest rates currently sitting at record lows, it is expected that they will remain as such throughout the year meaning lower borrowing costs and a highly competitive loans market. With so much contention for business, lenders are aiming to entice new business through consistently offering highly competitive mortgage solutions.
Throughout 2017 we saw very little property price growth giving the impression that a potential price crash is on the cards. However, this is very unlikely to happen in Australia anytime soon. But how can we be so certain?
There are various economic influences that would need to occur for this to eventuate, the first of which being an unbalanced relationship between supply and demand. This would need to be accompanied by a sharp rise in the cost of borrowing money and unemployment rates would need to increase substantially. Lastly, there would need to be a considerable number of people liquidating their properties at similar times in addition to the previous factors for a crash to be even conceivable. However, with the Australian economy remaining the way it is, we are pretty safe in thinking that a crash is unlikely to occur.
Fortunately for potential new home buyers, the opposite of this is far more likely. Prices are expected to idle but will not substantially drop. Interest rates will remain low and continuing changes made by the Australian Prudential Regulation Authority (the authority overseeing banks, credit unions, insurance companies and other industries) will assist in minimizing international property investors from coming to the table – expectedly keeping property price growth quite manageable.
For further information, and to put yourself in the best position with valuable information and guidance, contact a trusted consultant from Mortgage Choice on 07 3286 7711.