Real Estate News Brings Relief to Buyers & Sellers
It is refreshing to see the news outlets reporting some positive news about the real estate market this week. A combination of factors is set to invigorate the market and bring some certainty back to sellers and some confidence back to buyers.
The hesitancy of the election is behind us and the status quo has been restored. Negative gearing was a high priority for many property owners and the coalition victory allayed concerns of its abolishment.
Other positive news was to follow, starting with the likelihood of yet another cash rate cut. Our reaction was a little ‘ho hum’ about this forecasted rate cut, in that if they didn’t loosen the lending regulations then a cheaper loan is irrelevant if buyers can’t meet the criteria. Then the news we had been waiting for…the ability for more people to access money to buy property.
“The Australian Prudential Regulation Authority (APRA) has begun consulting on possible revisions to its guidance on the serviceability assessments that authorised deposit-taking institutions (ADIs) perform on residential mortgage loan applications. In a letter to ADIs issued today, APRA has proposed removing its guidance that ADIs should assess whether borrowers can afford their repayment obligations using a minimum interest rate of at least 7 per cent. Instead, ADIs would be permitted to review and set their own minimum interest rate floor for use in serviceability assessments.
APRA has also proposed that ADIs’ serviceability assessments incorporate an interest rate buffer of 2.5 per cent. Currently, APRA expects ADIs to assess loan serviceability using the higher of either (i) an interest rate floor of at least 7 per cent, or (ii) a 2 per cent buffer over the loan’s interest rate. APRA’s guidance also indicates that a prudent ADI should use rates comfortably above these minima; most ADIs use 7.25 per cent and 2.25 per cent respectively.”
More Information here: APRA
What this means for vendors is that there will be more eligible buyers looking for property, which will lead to an increased chance of buyer competition. This will undoubtably lead to a steady and more predictable property market. For buyers it is a great time right now because house prices have been adjusted to meet the market, the only way is up from here!
First home buyers are also now certainly back in the game! Stamp duty savings and reduced deposit requirements are set to give these buyers a helping hand to bring them back into the market. From the www.vic.gov.au website:
“We abolished stamp duty if you’re a first home buyer and buying a house for $600,000 or less.
If you’re buying a home for between $600,000 and $750,000 we’ve tapered the stamp duty. It is zero at $600,000 then increases slightly as the cost of the home increases to $750,000.”
More Information here: First Home Buyers
ScoMo is helping too, with this excerpt from the Liberal Party website:
“The Morrison Government is helping first home buyers into their first home.
Our First Home Loan Deposit Scheme helps eligible first home buyers purchase a house with a deposit as low as 5%.
First home buyers could save around $10,000 in Lenders Mortgage Insurance under our scheme. Smaller lenders will be prioritised to help boost competition.
First home buyers with an income of up to $125,000 (or $200,000 for a couple) will be eligible. This will help make the Australian dream a reality while protecting the value of homes.”
More Information here: Helping Australians Buy Their First Home
In Ocean Grove six months ago, there were very few, if any, homes on the market with price ranges starting in the $500’s now there are more than 20 in Ocean Grove and many more than that in Leopold, Clifton Springs and Drysdale. This means first home buyers have a great opportunity to get in the market.
The real estate outlook for our region is sending good vibes! Buyers should act now because the only way for prices is up!
If you’re considering selling or buying don’t hesitate to contact Hayden Real Estate on 5255 1000 or call into our office at 75 The Terrace, Ocean Grove.
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