Sydney and Australia’s housing price slide could slow and possibly even stabilise over the next few months as hopes of interest rate cuts and a loosening of mortgage rules start to have an effect.
Getting the right mix for the economy has proven difficult for government, lenders and policy makers over the past 18 months with the delicate balance of interest rates, inflation, lending and consumer confidence playing a role in pushing housing prices down, however there seems to be a more steady outlook for property prices over the coming months.
It’s clear there won’t be a return to boom times anytime soon, however there are some positive signs that suggest a bottoming-out for the housing prices will come sooner rather than later.
AMP and Citibank economists were among others who last week re-jigged their forecasts to pencil in a less steeper decline in home prices than previously predicted.
With the economy slow along with inflation at a low ebb, Philip Lowe, the governor of the Reserve Bank of Australia (RBA) last week gave the strongest indication that rates were about to possibly move lower soon. Economists are now predicting a cut in the cash rate to 1.25% from a record-low of 1.5% at the RBA’s June 4 policy meeting.
Later this year more good news for the economy and mainly middle-income earners with the promised tax cuts adding up to and extra $1,080 a year. It will be less for lower-income brackets.
The tax cuts will kick in a little later this year given the offset will only be paid once tax returns are filed. Based on taxpayers’ past behaviour, around two thirds — or $4 billion — of this year’s cuts will be delivered in the third quarter and another $1.7 billion in the fourth.
What Does This Mean For Property Investors?
We see this as a great time to be investing in property in and around Sydney thanks to lower prices along with a predicted bottoming out of housing prices and possible further interest rate cuts, which means now is really a great time to be actively looking for your next investment property.
So, if you are ready to take the next step with your property investing, and need some help, be sure to give the team at Plan Assist a call.