Mortgage brokers in Baldivis and the entire Rockingham area were wondering how Australian Prudential Regulation Authority (APRA) guidelines concerning investment loan growth would work out. Nearly a year later, we are beginning to get a better view of the bigger picture.
In December 2014, APRA told banks that they were no longer allowed to have a growth in investment loans of more than 10%. The decision were in response to what they saw as a non-sustainable growth in property investing and the effect that growth was having on owner-occupiers.
APRA intended their regulation of investment loans to help keep prices down for owner-occupiers. This has not only slowed price growth but also made more homes available to owner-occupiers. For a year, we have seen a “flat” housing market. This is in a market where average growth was more than 10% the last few years.
Another reason that now is a great time to buy a home: the record low RBA cash interest rate. Banks have been passing on the savings to consumers, resulting in some very low and affordable rates.
The other main reason that it is a great time to buy a home: higher building approvals. Across Australia, 223,000 dwelling permits were approved in the twelve month to July 2015. More inventory means better prices.
Putting it All Together
When you put it all together, you have flat prices, record low interest rates and a growing selection of homes to choose from. This may be the best “sweet spot” we are ever going to see in the housing market.
Housing is flat right now, but prices will eventually rise. So will interest rates. If you are a first home buyer or you just want to move up to a better home, there probably isn’t going to be a better time in the future. The moment you purchase a home, you begin developing equity in that home. If there is any way you can swing that home purchase you want, now is the time to get started.
To learn more or for a free consult, call us today: (08) 9527 1800.