At a time when real estate and property finance seems to have become a national obsession, it’s impossible to ignore the constant ‘chatter’. Which way are rates going? Are we in a property bubble? How can I afford a home? Whether it’s on the evening news or banter at a weekend barbecue, we spent some time with someone who has the insight and experience to cut through that chatter – Aussie CEO James Symond.
We open our interview with the big question on many Australians’ lips, particularly in Sydney and Melbourne markets where growth remains at record highs:
Are we experiencing a property bubble?
“In my opinion, no. There is no doubt that some parts of the Australian property market have shown extraordinary price growth over recent years, while others continue to be steady.” Symond advises “I believe the Australian residential property market is in pretty good shape. The media is great at publicising these wild assertions of property bubbles and busts. What they don’t advertise, is that from 2002-2012 the Sydney residential real estate market was the worst performing capital city in Australia; it effectively had zero growth less than inflation for 10 straight years. So if you average the last 5 years’ growth over the last 15 years it’s a different story, and the hype of a bubble wouldn’t be on everyone’s minds.”
“It is important for property purchasers to track price growth in the area they are looking to buy to ensure they are paying a fair price. And getting expert advice from real estate agents and mortgage brokers who can provide you with local sales data, such as CoreLogic reports, can help ensure they are making a safe and considered decision.”
Everyone’s an expert!
At work, in the press, at weekend sports and in seemingly every pub, barbecue or dinner party conversation, everyone seems to be an expert. And for every opinion – expert or otherwise– there seems to another completely different point of view. Who should we trust? From where should people get their information or take their advice?
“Everyone has an opinion about property in Australia – it is a national sport! However, people should listen to truly qualified experts who are informed about the latest trends in the market and have all the information required at his or her fingertips.”
While Symond concedes he may be biased, he points to the success of Aussie in helping hundreds of thousands of Australians to realise their property ownership dreams. “An Aussie mortgage broker is a true mortgage expert who is up to date with the market and can access a wide range of home loans to find the ones that are right for your short and longer term needs and aspirations. We have more than 1,000 mortgage brokers across Australia who can provide free mortgage advice to people who are looking to get into the property market or review a current loan to ensure it’s still appropriate and competitive in our ever-changing market.”
What challenges are most concerning Australians right now?
“I can’t speak for most Australians, but looking at the market and all the changes in lending rules and regulations, people may be concerned about how these changes will impact them. Rising interest rates for investment loans and interest only loans may be a concern for many.”
While interest rates have remained at unprecedented lows, Symond also says the prospect of rising rates is a concern for many. “It’s been over 12 months since the RBA changed the official cash rate, so some may be concerned that the downward trend has come to an end and interest rates will now start to trend back upwards.”
Are people right to be worried… or at least cautious?
“People should always be cautious and ensure they have a financial buffer in place to cover their future mortgage repayments if rates rise or some other unforeseen circumstance impacts their ability to make their mortgage repayments. It is always good to have a Plan B in case your circumstances go awry and protecting yourself with products such as Mortgage Protection that your mortgage broker can offer you is a sensible move.
However, if you’re asking if I think interest rates are about to bound upwards, then no, I don’t believe they are. I believe the current low interest rates are going to remain low for years to come. Now that doesn’t mean interest rates won’t edge up in six months or 16 months, but in my opinion they aren’t going to jump up 3% in the foreseeable future,” Symond explained.
While property is “Australia’s largest and best performing asset class”, Symond says that the best piece of advice he could give any property owner or potential buyer is to “ensure that they are not over-extended in their mortgage repayments.” But, above all, he advises, “It’s essential to get expert mortgage advice.”
Broker or bank? What’s the difference?
“Bank or broker is like chalk and cheese. Aussie brokers are dedicated to providing local, personalised mortgage advice and outstanding customer service – and it doesn’t cost our customers a pretty penny to use an Aussie broker.
With a bank you may also get great customer service at no cost, but importantly a bank can only present you with the limited home loan products they offer. A mortgage broker has a panel of lenders which may include the big banks to smaller mutuals and online lenders, giving the broker the ability to really look at a huge range of mortgage products to find the one that’s right for you.”
Find out for yourself what an Aussie expert can do for you. Whether it’s your first move or your next move, drop in for a chat with your local Aussie broker today.