This year’s spring selling season could present a unique opportunity for savvy buyers. The property market has held up remarkably well despite dire forecasts from economists and with restrictions eased across the majority of the country, it could be a bumper season.
Read on to see how the property market has seen a marked improvement in recent months, as well as our top tips for those looking to buy a home this spring.
Property market rebounding
The pandemic saw an almost complete shutdown of the real estate industry. Open homes and in-person inspections and auctions were banned, bringing sales and clearance rates to a shuddering halt. Property prices were tipped to fall by as much as 30%. However, the easing of restrictions across the nation has seen somewhat of a return to normality to the property market.
Figures from the Australian Bureau of Statistics revealed home buyers rushed back to lenders in droves as restrictions were eased in July. New home loan commitments (which excludes refinancing) rose to pre-COVID levels, climbing 10.7% from June to $14.3 billion, the largest month-on-month gain since March 2009. New loan commitments were up 11.8% from their level a year earlier. The figures were then bested by August data, with new home loan commitments rising 12.6% to $16.3 billion, the largest month-on-month rise in the history of the series.
House values have also seen a turnaround recently. CoreLogic reported values have declined for five straight months, with September seeing the national average decline by 0.1%. However, this was led by declines in Sydney and Melbourne who make up for 40% of the housing stock by number and 55% by value. Every other capital saw a rise in home values over September, with consumer confidence increased and a rise in new listings.
Five tips if you’re buying this spring
Here are our top five tips if you’re looking to buy a home this spring:
Take advantage of low rates
Interest rates are the lowest they’ve ever been, with Australia’s cash rate at a record low 0.25%. There’s even talk the Reserve Bank could cut the rate to 0.10%! There’s perhaps never been a better time to refinance to a low rate.
We’ve recently launched our Smart Booster Home Loan, Australia’s first-ever variable owner-occupied home loan with a rate under 2.00% p.a. The 1.99% p.a. introductory variable rate (2.47% p.a. comparison rate) is available for one year before reverting to a rate of 2.48% p.a. In addition to this, we’re also offering a two year discounted variable rate of 2.09% p.a. (2.71% comparison rate). Both loans are available to borrowers with a Loan to Value Ratio (LVR) of up to 80% and have a maximum loan amount of $1,000,000.
Take advantage of home loan features
An offset account can be a great way to save money on your home loan. It functions like a normal transaction account would, where you can deposit and withdraw funds as you please. The money in the account is offset against your home loan debt, reducing the amount of interest you’re charged on the home loan, potentially saving you tens of thousands over the life of your loan, An offset account is available on the Smart Booster Home Loan, as well as our Smart Home Loan.
Get in early
Experts are tipping there to be a flurry of buyers with lower than usual advertised stock, depending on where you are in the country. More stock is expected to flow into the market as the year goes on, but getting in early could see you nab a bargain. Competition for a property is expected to be fierce, so an early offer may put you in better stead with the seller.
Do your research on the suburb
Researching the suburb you want to buy in is always vital when buying a home, but even more so this spring. With house prices falling across the country for five consecutive months, it’s worth researching what other properties have been sold for and selling for in the area to see whether the house you’re interested in is selling for a suitable price. Having this information also gives you great leverage when negotiating with the seller.
Talk to the professionals
Despite much of the industry grinding to a halt since COVID hit, most real estate agents have been working through the pandemic. Going into the spring selling season they just might be your best friend, with a wealth of knowledge about the suburb, recent sales, and where you may get a bargain. Keeping an open line of communication with an agent could be a great way to get off-market alerts or get in before other buyers.
In preparation for the spring selling season, see how much you could borrow with us.
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