Last issue I mentioned that fixed rates are up. But variable interest rates are low. The trend continues with more and more banks putting their fixed rates up. Variable rates are now also up by 0.25% p.a. after the Reserve Bank decision in May 2022.
The flow on effect has been the media running a whole series of doom and gloom for the property market and the economy in general stories. You don’t have to look too hard for forecasts of catastrophic failure in the broader economy in the news. There seems to be one a day at the moment from each publisher.
It’s no secret that house prices have increased significantly over the past couple of years. You’d have to be blind not to notice it. We could end up where the media are forecasting, but there are a lot of things that would have to come to pass before what they are forecasting actually happens.
Right now, based on the available information, it seems the media is making a mountain out of a molehill.
This is one of the times where it will pay not to panic. I’ll be the first to admit that I’m not too sure what’s going to happen. Everything feels uncertain. But feelings and facts paint a different picture.
The facts are, the RBA is rolling back the stimulus measures it had in place to combat the worst of the economic fall out of the pandemic.
Could we see a cooldown in the real estate market? Yes we could. Is that a bad thing? For some of us, it might be. However, at the same time, it looks like the number of people that have been pre-approved for a home loan, that hasn’t been able to find a property they can afford is significant.
I’ve got clients who have been back 2 and 3 times for pre-approval who have been priced out of the market each time. If this is indicative of what is happening in the broader market, I’m going to say that a lot of people will be jumping in should there be a softening in the market’s prices. Which in turn could push the market up.
For now, my advice is ‘don’t panic.’ Try and make your decisions based on facts, not opinions. Especially not the opinions of people who need to say really sensational things in order to garner attention, so they can make money.
If you have any questions or are wondering what to do. I’m just a phone call or email away. Just call 1300 661 211 or register online at https://www.mortgageworldaustralia.com.au/contact-us/ together we can decide what if anything is your best course of action.