Loanscape is a premium provider of credit advice for professionals, small business owners, first home buyers and property investors. We are based in Sydney's inner west, serving clients in all states of Australia, as well as expatriate Australians currently living and working abroad.
In news this month, tighter credit conditions are still having a broad dampening effect on buyer activity. This isn’t just with investors, there has also been a considerable decline nationally in owner-occupier lending, according to CoreLogic.
consumers are displaying cautious attitudes towards the property market thanks to the upcoming federal election and potential changes to taxation policy.
The Australian property market peaked in mid 2017. Since then prices have fallen by 6% on average nationally. Prices are down 13% in Sydney and 10% in Melbourne. These falls are the largest since the 1980s, albeit off the back of a large growth spurt which commenced in 2013. Overall, Justin Fabo of Macquarie expects the overall drop may be around 20% in Sydney but that it is very difficult to predict its timing. He says that it is too early to say whether recent improvements in auction clearance rates point to a bottoming in the market.
He says that although the level of housing approvals has dropped dramatically it will be 3 to 4 years before net migration turns the demand/supply balance to lead to a strong recovery in prices.
Choosing which loan structure is best for you depends on your personal situation, possible changes in income or expenses, and your short term expectations with your property. Your overriding approach should be to understand that fixed interest rates are a risk management tool; they are not necessarily a way to save money. Do not try to second guess the interest rate market. My rule of thumb is that 80% of the time lenders will end up ahead on any fixed rate loan contract, simply because they understand money markets much better than their customers.
An increase in the size of your family can be the catalyst for upgrading your living circumstances. But what issues do you need to consider before you prepare your loan application?
In news this month, the demand for mortgages continues to weaken. Cameron Kusher of CoreLogic has speculated that if the fall in house prices is to be attenuated then we could see the RBA cut rates and APRA relax its tightening of lending conditions. Westpac’s chief economist Bill Evans is now predicting 2 rate cuts before the end of this year.
As we start a new year, consumer confidence continues to decrease, with -4.7 per cent on the Melbourne Institute and Westpac Bank Consumer Sentiment Index.