A property market revival
As we enter 2020, we enter an exciting phase for the Australian property market. During the second half of 2019 we saw upward growth in a number of areas, with five out of the eight capital cities finished 2019 in positive growth and the market finished the year with the largest month-on-month gains since 2003.
But what does this mean for the next year? We take a look at some factors of the market that might impact your purchasing and financial decisions in the coming months.
Lower mortgage rates
A series of interest rate cuts from the Reserve Bank of Australia throughout 2019 means that all of the ‘big four’ banks lowered their interest rates for home loan borrowing. In turn, this of course means lower payments each month and more affordable mortgage payments. For those people who already own a property, it means this could be a good time to review your product, with the potential of refinancing to snap up a better rate. This applies whether your fixed rate is coming to an end or not – you may be able to save money in the long run, even with extra fees to pay.
Relaxation of mortgage lending criteria
Alongside a lowering of mortgage rates, we’re seeing a relaxation of mortgage lending criteria among the big four to stimulate buyer activity. This means that for those without a property, you may not only find that you can afford repayments where you couldn’t before, but that lenders who previously maybe not have considered your application may do so.
We’re not anticipating conditions to change over the first half of 2020 at least so now is the time to start seeking advice on financing your property purchase. As always, we don’t recommend maxing out the loan a month that a bank offers – they’re telling you what you could borrow, not what you should borrow, so it’s important to be conservative to cushion yourself from potential future events.
Housing affordability – one to watch
With a decline in property values and a rise in average household income in 2019, housing affordability was looking positive. It was good news for potential first time buyers, or indeed anyone looking to purchase a new property or refinance their mortgage. However, in 2020 housing affordability isn’t one to watch – with the steps taken by the RBA, we anticipate increased activity in many housing markets as more buyers are able and motivated to make their investment. In some areas, with more demand may mean an increase in house prices – good news for those who have already purchased, but may lock some out of the market.
Choosing your area wisely
At Reventon we are continually talking to our customers about the value of choosing the right area for their property investment – it was vital during the downturn but is as vital now. There are national averages when it comes to property prices, but a number of markets across states, cities, towns, and suburbs.
There are some particular hotspots to look out for in 2020 – in Victoria, regional towns such as Bendigo and Geelong are set to grow as many buyers are seeking more affordable alternatives to Melbourne’s metropolitan markets, but still with the convenience of commuting into the city within a couple of hours. Population growth in south-east Queensland is also promising for the Brisbane and Gold Coast markets, which have been steadily increasing over the past couple of years.
Make 2020 your year for property investment
There are plenty more high growth areas across cities and regions in Australia that our team are continually analysing and monitoring – and of course we’re happy to share these with our clients. All you need to do is get in touch with one of our team members for an obligation-free, in-depth chat.
Of course, its more than just finding the right area for you – its also about finding the right financing, investment plan, and property that suits your long-term needs. It’s hard to do this without help, so if you’re making 2020 your year for property investment be sure to book a free consultation with a Reventon expert as a first step.