2017 has been anything but typical.
From geopolitical instability, conflict and leadership changes abroad, to rising energy prices, regulatory changes and the marriage equality debate at home, 2017 has certainly been an unforgettable year.
Internationally, 2017 was punctuated by changes in political leadership.
In January 2017, Donald Trump was sworn in as the 45th president of the United States. His appointment combined with his love for firing shots at his perceived enemies 140 characters at a time, created a high level of unrest in some parts of the world.
Across Europe, Emmanuel Macron was elected president of France in May 2017. Meanwhile, Angela Merkel won her fourth term as the Chancellor of Germany, with constituents now looking to Merkel to rally a liberal Western order and lead the country in the aftermath of Brexit.
Closer to home, the Federal government delivered a budget that could be characterised as a ‘series of small pops and fizzles’. Unfortunately, there were no silver bullets and no truly substantive changes. Indeed, the Government did little to help any of the markets desperately seeking assistance.
First home buyers for example, were only given access to a first home saver scheme that was plagued with usability problems from the word go.
But where the federal government failed, the state governments rallied.
On 1 July, both Victoria and New South Wales introduced a variety of first home buyer incentives. In NSW, first home buyers purchasing a property up to the value of $650,000 no longer have to pay stamp duty - saving first home buyers up to $25,000.
In Victoria, the story was much the same. First home buyers purchasing properties with a dutiable value of $600,000 or less would no longer have to pay stamp duty. In addition, those first home buyers looking to purchase newly established properties in regional Victoria were also given a $20,000 first home owner grant.
In more pleasing news for first home buyers, the Reserve Bank of Australia continues to leave the official cash rate on hold at the historically low setting of 1.5%, keeping the cost of borrowing at all-time affordable levels.
But while the cash rate was unmoving, the mortgage market was anything but stable.
In March, the Australian Prudential Regulation Authority wrote to Australia’s lenders and asked them to reduce their level of interest only lending to 30% of all new loans written.
In response, many of Australia’s lenders implemented a raft of policy and pricing changes. In some instances, interest only pricing rose by as much as 40 basis points.
While there are still plenty of lenders offering sharp interest only loans, the vast amount of changes in this space means borrowers in this type of product should definitely review their options and make sure their current loan is the right one for their needs.
At Mortgage Choice, we can help you review your financial situation and make sure you are making the right choices to achieve your property and finance goals.
Speaking of Mortgage Choice, this year we celebrated our 25th birthday. As we reflect on this milestone, we are filled with pride over the number of people we’ve helped achieve their dream of homeownership. It is our mission to help Australians live a life of abundance and we plan to do this for many years to come.
Looking forward, we are excited for 2018. Interest rates are likely to remain low, keeping the cost of borrowing at affordable levels.
There will more than likely be increased lender and broker scrutiny from the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission - which will only serve to further evolve the banking and finance industry.
Certain markets, like Sydney and Melbourne, will continue to perform well, with the capital cities expected to enjoy moderate property price growth.
All in all, it would appear the future looks bright.