The latest from Integrity Finance Australia
It looks like 2015 will go down in history as the end of this property price boom in Melbourne and Sydney.
This does not mean the often media hyped impending doom / property crash is upon us! Though I am sure we will continue to see occasional headlines in the tabloid media to that effect. What it does mean is that the unsustainably high capital growth we have been seeing, particularly in Sydney, is at an end.
Buying your dream home is one of the biggest and most exciting purchases you are ever likely to make. What a great Christmas present to yourself and your family! The credit card will not stretch that far though.
Saving the required deposit can be the most difficult obstacle to overcome, preventing many people from achieving their dreams. So what can you do? You need to budget!
Major changes in the banking market have occurred since July, with competition heating up so much some are calling it a war – great for home owners! Most banks have been adjusting rates up and down since that time (despite no move in cash rates from the Reserve Bank). Are you paying too much to your bank? How does 3.99% sound?
Almost everyone wants to be able to buy a home sooner rather than later, however saving the expected 20% deposit is far easier said than done. Let's face it - with Melbourne’s median dwelling price now $563,000, saving a deposit of $112,600 plus purchase costs is no easy task, and would take strong discipline and many years!
New banking rules continue to be imposed on us all! In the July I wrote of rapid bank changes happening and in the two months since then the pace of change has increased, and has gained front page coverage. The majority of existing investment loans have had their interest rates increased in August, this should be prompting you to review your lending if you have not recently done so.
“How much can I borrow?” is a standard start point for many prospective residential property purchasers. The start point should be what repayments can you afford to make? Banks do not willingly issue loans to clients who cannot afford to repay them, they are also under regulatory pressure to lend responsibly, but you should always check your own numbers as well!
