It’s no secret that the property market in Sydney has seen a major slowdown in recent times with prices down significantly from their heady peaks during the latest boom. However, the upside of the downturn is the opportunities it presents for buyers. If you’re in the market to buy your first property or investment property, upgrade your home or downsize, now could be a great time to dive into the market.
Property prices across Sydney have fallen by as much as 15-20% from their peak to what some think may have been the market’s bottom around May or June. However, we are now seeing tentative signs of recovery, including a recent rebound in auction activity.
The silver lining of a weaker property market is that it reduces some of the challenges buyers face when consumer confidence is high. First time buyers may find that they can finally get their foot on the (notoriously expensive) Sydney property ladder. For those looking to upgrade, the gap between property price brackets is narrower. Those in a position to buy now face less competition and can take their time researching comparable properties, negotiating with vendors, and making a well-considered decision without as much pressure to act fast.
Interest rates are at record lows
With the Reserve Bank holding the cash rate at a record low 0.75% and downgrading its economic growth and inflation forecasts, interest rates are at a historically all-time low. What’s more, experts are predicting that interest rates will likely stay low for a long time to come.
Financing conditions are easing
In the wake of the Royal Banking Commission, banks significantly tightened their lending conditions, which reduced buyer activity. However, the Australian Prudential Regulation Authority (APRA) has now asked banks to relax lending rules. APRA has flagged that it will lower its minimum serviceability buffer from 7% to a level determined by banks and other lenders.
Help for first home buyers
The NSW Government has introduced a range of measures designed to improve housing affordability. Among them, the First Home Buyers Assistance Scheme allows eligible first home buyers in NSW to get an exemption or concession on transfer duty (stamp duty). Homes valued at less than $650,000 qualify for a complete exemption and properties valued between $650,000 and $800,000 qualify for a reduced transfer duty.
Make sure you’re covered
When you’re increasing your financial commitments it’s important to make sure you’re properly insured in case of any unforeseen changes in circumstances. Besides your home and contents insurance and Landlord’s insurance – if you’re buying an investment property – your to-do list should include reviewing your income protection insurance, life insurance, TPD and Trauma cover. We’re always help to sit down with you and review all of your coverage to make sure it’s comprehensive and suits your changing needs.
Picking the best time to buy or sell
Unless you own a crystal ball, you can never be guaranteed that it’s the ideal time to buy or sell as far as the market goes, as it always moves in cycles. What you can control, however, is keeping a clear eye on your own financial and lifestyle goals and what’s right for you and your family.
If you need help reaching your financial goals or making sure your insurance is up to date, pleasecall us anytime on (02) 8268 for an obligation-free talk.