In case you have been living under a rock the past few days (or maybe just aren’t property nerds like us), here’s a quick recap of what’s been going down in the world of finance and property. The Reserve Bank of Australia has changed the interest rate from 1.5% to 1.25%, this is the first time it has moved since 2016, and people are pretty excited about it. Why did this happen? In a nutshell, growth in the Australian economy has slowed down, and this is having a knock-on effect impacting things like consumer consumption, and people’s ability to buy a property. Basically, the mystical man behind the curtain that controls how much interest banks need to charge on loans, made it a little easier because your average joe has been struggling a bit (we are seeing record levels of house debt, actually). Still confused? That’s ok, we get it and that’s all you need to worry about. Moving on.
Despite all of this, the labour market is performing pretty well and inflation has been lower than expected. In the statement of monetary policy (the mystical man’s report of how stuff’s going), a number of labour market indicators remain positive and employment markers are strong. Because of all that, the minimum wage will be increasing from 1 July by 3%. Low-medium income earners should also get a tax break of around $1080 per person. So let’s just re-cap, the average joe’s are struggling a bit, so they are cutting interest rates down, tax rates down, and the minimum wage up. All sounding pretty good so far, right? Well, it’s about to get better.
Experts are predicting more rate cuts in August, and some say even more may come early next year. On top of this, APRA has announced that they are dropping their 7% mortgage serviceability rule, and instead of going to introduce a 2.5% ‘buffer’ on top of whatever the current mortgage rate is. That means that instead of having to be able to afford a 7% interest rate to get approved for a loan, you only have to afford 2.5% on top of your loans current rate. For a loan that’s 4% say, that means having to service 6.5% instead of 7%. (Hint: your income doesn’t have to be quite as high as it did before).
But, we’re guessing you don’t care so much about the ‘why’ and a little more about the, ‘how can this help me’. Fair enough, let’s get into that. Well, with interest going down, lending requirements going down, tax going down, and income going up… It’s the easiest it’s been in quite a while to get a home loan. This is your moment. If you thought that you might not be one of those people that can afford to get yourself a new home anytime soon, think again! But, if you’re thinking ‘hang on a minute, if I wait a little longer, won’t it just get even easier’ then think again too. Experts are also predicting that with all of these things happening to make things easier, later on in the year some sort of restrictions might increase to make sure we all don’t go too crazy with the property buying. So the best time to buy is likely now.
Alrighty, now if you’re still with us, here’s how we are going to make things even better. We are matching the first home owners grant for QLD buyers. The current first home owners grant is $15,000, meaning we will give you another $15,000 towards your new home. That means you will have $30,000 towards a deposit. When you couple that with all of the above, that new home purchase that was previously a little out of reach, suddenly seems very reasonable. Interested?
Fill in our form to see if you meet the criteria, then we will reach out to discuss your options: http://bit.ly/2K1zyFU