Buying a property in Australia has long been an uphill battle for first home buyers. Property prices have skyrocketed in the last decade with areas like Sydney achieving record high median property values exceeding $1 million and other cities following close behind according to CoreLogic RP Data.
Is it time for first home buyers to throw in the towel and give up on dreams of home ownership? Definitely not. Signs are emerging, telling us that things may be about to change. With this in mind let’s have a look how changes in Australia’s property market will affect first home buyers in the near future.
It may be time to start planning your first home again thanks to improving market conditions.
Low interest rates on home loans
The cash rate is low, and will likely remain that way for some time. As a result, banks are offering incredibly low interest rates on home loans, which will obviously make borrowing money cheaper.
While an interest rate that’s one, two or even three per cent lower than the norm may not seem like a big deal, over the period of a 30-year loan it could be quite a considerable sum. This will mean that in the long run you spend more money gaining equity in your home, rather than filling the bank’s pockets.
Decreasing house prices
The general sentiment regarding property prices in Australia has been near apocalyptic. Will prices ever come down, or will they just continue to increase until no one but the mega-rich can afford property?
A QBE report forecasting the future median prices of property in Australia’s major cities has revealed an opposing perspective. In fact, the forecasts state that house prices in several major cities will decrease in the near future, including Sydney, Melbourne, Adelaide and Darwin.
Forecasts on unit prices are even more promising. In fact, apartment prices in every city but Brisbane are forecasted to decrease, with Sydney prices dropping by as much as 6 per cent.
With this in mind it may be time to consider buying property, as it moves towards being more affordable. When you do make sure you get in touch with us. We can help make sure you choose the most suitable loan product, and know what’s happening every step of the way.