Increased likelihood of Interest Rates falling
In this month’s monthly market update we discuss the possibility of interest rates falling further and the reasons why. This would be welcome news for all home owners as it would decrease monthly loan repayments and also help stimulate economic activity. It would also make it easier for both consumers and businesses to access funds.
Currently interest rates in Australia are at an all time low, yet on a world scale they are still high. For example in Switzerland you are able to lock in a home loan interest rate of 1.5% for ten years!
CLIENT ACTIVITY: FALLING MARKET HELPING CLIENTS
Properties out of reach 18 months ago now attainable
With the recent decline in Melbourne property prices, 2019 looks like being the year of opportunity for our First home Buyer and Owner occupied clients. We are seeing our clients purchase properties now in suburbs that they believed were out of their reach merely 18 months ago.
Last month we had a client purchase a single fronted house in the premium suburb of Albert Park. Our client was previously looking at townhouses and apartments in Albert Park but was able to secure a house on greater land size. This property was negotiated off-market.
We also had another client purchase a house in Ascot Vale. This house was just off the major shopping strip of Union Rd, had substantial accommodation and was on a deep block of 350 square metres. Going into auction, our client was not confident that this property was within their budget, but was able to secure the property one week after auction after it was originally passed in (with no bids).
Both of these clients had been pre-approved for their home loan which meant they could make strong offers that were not subject to finance. If you are thinking about purchasing it is imperative that you speak to your mortgage broker and get your finance pre-approved before taking action.
The case for RBA rate cuts
This article by William (Bill) Evans, Westpac’s economic spokesman and responsible for all of Westpac’s economic research makes the case for another interest rate cut by the RBA due to revised growth, inflation and unemployment forecasts.