Could Now Be The Right Time To Get That Home Loan?

As property prices in Australia are continuing to rise and with the RBA (Reserve Bank of Australia) hinting they could go higher; you would be justified for giving serious consideration about whether it is time to get on the property ladder.  Before you decide to get a home loan from a company like State Custodians, there are two things you need to understand about the current state of Australia’s housing market – property prices and interest rates.  In the following article, that is what we will look at in more detail.

Understanding Australian Housing Market Property Prices

Corelogic RP Data shows that during February this year, Australia’s biggest cities experienced property value increase of 0.3%.  The result of this is that houses in those areas are 8.3% more expensive than they were during 2014.  Individually, Sydney had the largest property value rise at 13.7%, with Melbourne experiencing a rise of 7.4% and Brisbane 5.9%.

Although these property value increases are undoubtedly a good thing for those who already own property, it is not so good for people who are interested in climbing the property ladder, but haven’t yet.  The affordability of property is and should be a major concern if you are considering on whether or not to take out a home loan and purchase real estate.  If the cost is too great, it may cast a shadow over your plans.

You should note though, that this is not all bad news, because if the values and prices do continue to rise, it could mean that there are higher investment returns to gain if you buy real estate now.  Although it is always risky, with the market as it stands currently and prices showing no signs of not rising, if you can afford it; there is no better time than now to buy a house or property.

Understanding Australian Housing Market Interest Rates

During February this year, the RBA lowered interest rates to a record low of just 2.25%, which meant that borrowing is more than a little bit cheaper.  Economy and financial experts from all over Australia including Compare Forex Brokers are suggesting that this is not the end of the story and that further interest rate cuts could occur in either April or May. One more cut of interest rates should lower the Aussie Dollar to the 75c target the Reserve Bank of Australia earmarked in their March 2015 board meeting.

These interest rate cuts pose a dilemma if you are looking to invest in property, because you have to decide whether you want to take the current rate and be locked into it or risk waiting to see if they are pushed lower.  Experts agree though that the record low of 2.25% is unlikely to hold for the whole year, so it might be wiser to look at home loans now and, rather than waiting.

It is also worth considering that even if the official rate is cut down, it doesn’t necessarily mean that all lenders will pass on that lowered interest rate to their customers.  Depending on the particular lender and their attitude towards business, you may find some may still keep their interest rates at a level that is more profitable to them, while others will take a more competitive approach.

Keeping all of the above in mind now may be the best time to talk to a company like State Custodians to see what kind of home loan you could be entitled to.

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