It’s what all buyers have been waiting for the end of the election. With the uncertainty of Labors new reforms now at rest experts believe we will now see a stabilising of the property market.
Buyers retreat from uncertainty, which is exactly what has plague the property market since the election was announced.
Investors who have been in a holding pattern awaiting the election result will now become more active in the market. The decision for the Reserve Bank to hold rates earlier this month have made experts more adamant of an impending rate cut to stimulate our declining market.
In a report from SQM Research, investment advisers specialising in property investment, it states “with no changes to tax breaks for investors, and where the Reserve Bank cuts interest rates by half a per cent, they predict property prices would rise between 8 per cent and 14 per cent” by 2022.
First Home Buyers
The coalitions First Home Buyer Scheme is set to assist 10,000 homebuyers. The scheme is to assist first home buyers with a top up on their deposit.
Buyers with a 5% deposit and earning up to $125,000 for individuals or $200,000 for couples will be eligible to receive a top up of 15% through National Housing Finance and Investment Corporation.
For those struggling to make the 20% required deposit this will assist them and also assist in avoid lenders mortgage insurance. Lending checks are still part of the eligibility process so applicants will be required to prove they have the ability to repay their loan.
The restriction to 10,000 first home buyers who are already able to service a loan. So little impact on the overall market is expected. For first home buyers to step back into market but there are many other economic factors to account for as well as tight lending restrictions.
With the Royal Commission now complete the coalition will now work through the findings. There will be no real changes proposed for lenders in the remuneration structure of mortgage brokers. The financial lenders will still remain as the contributor to mortgage broking fees not the borrowers.
Lenders are still reviewing internal processes and product offerings so tight lending restrictions aren’t set to alleviate in the short term.
With the election now behind us the outlook for property prices is positive. Managing Director of Market Economics, Stephen Koukoulas comments that there are more important long term factors for the property market. “Really important are the level of interest rates, demographics, supply and demand in driving house prices.”