What do the recent changes in the market mean for you and how can you take advantage of these changes? It’s the perfect time to get ahead of the pack and avoid paying a premium in 6-12 months time.
- With the Liberal Party winning the Federal election on May 18th, 2019, there has been a collective sigh of relief from property investors and home owners alike. The fear of changes to capital gains tax and negative gearing has dissipated and equally the public appears to be quietly confident of a stable government moving forward.
- APRA have publicly stated that they are looking to lower the stress test threshold from the requirement to pay the loan of 7.25% to a flat 2.5% above the negotiated mortgage rate. For example, if your mortgage rate is 3.5% then the stress test will take your level to 6% which is 17% better than currently. which roughly extrapolates to the consumer being able to borrow 17% more money.
- Interest rates. The RBA has lowered cash rates for the first time in 33 months from 1.5% to a new historic low of 1.25%. It’s widely expected the RBA will lower again in the coming months.
According to the financial and property press, the three events mentioned above will boost confidence dramatically and the property market will be off to the races again. It’s probably too soon (usually impossible) to predict the exact bottom of the property cycle, however all indicators are that we will see a particularly busy spring selling period this year. We would predict that we will see the bottom of the market this winter/early spring.
Where do we go from here and how can Rose & Jones help?
- Access to properties.
- Valuation and execution expertise.