Low interest rates plus a cooler market spells ‘opportunity’.
If 2015 was the year prices soared in a number of Australia’s largest capitals, 2016 may well be the year that price growth returns to more sustainable levels.
Figures from CoreLogic show property values were cooling at the end of last year across three of Australia’s eight capital cities – Sydney, Adelaide and Canberra.
We’re certainly not talking a property market crash. In Sydney for instance, values fell 1.2 per cent in December but price growth was still a healthy 11.5 per cent over the 12-month period. Add in rent returns, and Sydney property investors pocketed annual gains of 15.4 per cent in 2016. Not a bad result at all.
Home loan lending climbs
This could explain why home loan lending rose 1.7 per cent in November. The increase may have defied the expectations of many economists but faced with poor returns on cash and a jittery share market, residential property remains a very compelling asset.
Seize the opportunities
With price growth taking slower breaths in 2016 in some cities, there is no shortage of ways to take advantage of the current market conditions.
Upgraders are well-placed to secure savings on their next property. Or consider using their home equity to fund a long term investment property. Price falls in some areas have put a rental property within greater reach of more Australians.
This could also be the year to consider an interstate move and take advantage of significant price differentials. The median house price in Sydney for instance is $935,000 but you’ll get a lot more bang for your buck in Melbourne ($675,000) or Brisbane ($525,000).
More time to weigh up the options
A less heated market also means buyers aren’t under intense pressure to make a rushed decision. And that’s a good thing. You can probably afford to check out the market at your own pace and find the property that is right for your needs.
When it comes to selecting the right loan, a good mortgage broker will also take the time to explain the loan that’s right for you and help you secure it in the necessary timeframe.
Are you planning to capitalise on a cooler market? Tell us your 2016 property plan.