Property Prices on the move again is not a headline you would expect to see if you had listened to some of the
so-called property experts who were espousing doom and gloom over the first half of this year. In fact, if you acted on some of the free advice being thrown around by them, you would have sold your property and started renting!
It is hard to fathom that some were predicting up to a fifty percent drop in home values when just nine months into 2019 and we have now recorded price increases in Sydney, Melbourne, Brisbane, Canberra and Hobart Month on Month just gone!
There is no doubt that since the re-election of the Morrison Government, a strong belief in Real Estate being an asset to hold has reignited. Agents across the country are seeing record crowds at Open for Inspections, auction clearance rates at near boom levels, and a massive shortage of properties for sale needed to meet the demand.
Traditionally spring is the best time to sell your home however this spring seems to have doubled down and the only thing holding buyers back, apart from the lack of homes for sale, is the still strong control by banks when it comes to lending.
Responsible Lending has had more attention from the banks following the Royal Commission and despite banks commenting that little or nothing has changed when it comes to lending, anyone applying for a home loan right now will tell you a very different story.
Never has the scrutiny on personal spending played such a big part in whether a home loan is approved or declined, and this goes right down to your $9.99 per month spend on Netflix!
There is of course concern relating to global economics, but this has always played a factor when it comes to the Australian economy and Real Estate prices.
What we do recommend however, and this is where responsible lending is trying to achieve in part, is that you pay close attention to your interest rates and your ability to repay.
If and when rates start to increase, they could have a dramatic impact on your ability to maintain loan repayments and subsequently place you in a position where losing your home could become a reality.
Naturally there is inherent risk in all types of investment and I certainly do not recommend everybody rushes out and puts themselves into debt up to their eyeballs the way I did over the years, however, I will say that with not taking any risk at all, you can all but guarantee you will miss any opportunity that arises with real estate cycles. Therefore, is responsible lending really that or can it in part be irresponsible as a one size fits all approach by the Banks is being applied?
Source: Charles Tarbey
Chairman & Owner
Century 21 Australasia