It’s no secret that the Reserve Bank’s cut to official interest rates is designed to help the property market continue to recover, as experts predict a bottoming out of the recent price falls.
History was made last week when the Reserve Bank cut the cash rate to 1.25 per cent, from 1.5 percent. It was its first move on rates since August 2016. Owner-occupiers and investors who bank with the Commonwealth Bank and NAB will be pleased to receive the full 25 basis point cut, but ANZ Bank declined to pass on the full rate to their customers, electing to only pass on 18 basis points.
An estimated 277,000 first home buyers have entered the market since the last move in August 2016, it remains to be seen how much this recent cut will stimulate the property market. However cheaper finance along with the prospect of the bank regulator relaxing a key stress test, meaning borrowers would be tested (to repay a loan) at lower hypothetical interest rate than in the past – would be welcome news for the market and property investors.
Last year, under the scrutiny of the Royal Commission, the banks became more cautious about writing loans particularly to investors and riskier borrowers but now the bank regulator is indicating plans to relax these measures to further stimulate the property market.
Adding to the confidence in the property market is the Liberal Party’s clear win and the stability it brings by leaving housing tax policy unchanged.
Tim McKibbin, the Chief Executive of the Real Estate Institute of New South Wales (REINSW) summed up the current property market with these statements, “Our new market analysis shows most property markets across Sydney and NSW have seen price falls or stayed flat across the first quarter of 2019. Now’s one of the best times to buy a home in over a decade.”
“With the elections over, we have stability at a government level, together with the lowest prices the state has seen for a long time. Prices are bottoming out, the market is starting to settle after the banking Royal Commission and there’s talk of more interest-rate cuts”.
“It’s the right time to buy!”
Here at Plan Assist we agree with the positive property market expert commentary as we are currently busy helping our clients buy smart across NSW and the growing south-west corridor of Sydney. Now is the right time to secure a bargain and if you need help, so you don’t miss out, be sure to give the team at Plan Assist a call.