Property prices are running hot as we head into summer, and the market is tipped to dial up even further over the next 12 months. Here’s how it could shape your home-buying plans.
Aussie home values are sprinting into summer, with property price growth hitting the fastest pace in over two years in October.
The price hikes are unlikely to stop there.
A record nine out of ten (88%) respondents to a recent API Magazine survey expect home prices to climb higher.
It seems the experts agree.
PropTrack believes we could see further price rises over spring and summer, while the Commonwealth Bank says “we still expect further gains” this year.
If forecasts of rising home prices prove accurate – and as we’ll see, there’s a decent chance they could – now could be the time to bring forward your home-buying plans.
Home prices jump 6.1% in the past 12 months
It’s been a big year for property, with home prices nationally climbing 6.1% over the past 12 months.
Several factors have come together to push home values higher.
Lower interest rates have boosted home buyer demand.
Tight rental markets have fuelled investor activity, with investors now making up around their highest share of lending since 2017.
Further piling pressure on home prices is the additional demand created by the newly expanded 5% deposit first home buyer scheme.
On the flipside, supply remains tight. And supply doesn’t look like catching up to demand any time soon. New home completions are already 15.6% below average for the past decade.
The bottom line is that the potential for further price rises might be a compelling reason to bring forward home buying plans.
Home price growth is eating away at borrowing power
Buying a home is never a decision that should be rushed.
But with no end in sight to property price gains, now may be time to advance your buying plans.
Speak to us – we can let you know if you are home loan-ready right now.
This is not about sprinting in to buy the first home that comes along.
Rather, it’s a matter of making the most of the buying power you have today, because it could be lower tomorrow if home prices keep rising.
You see, while the Reserve Bank’s interest rate cuts have given households on the median income a $51,000 increase in borrowing power, median home values across our big cities have risen almost $54,000 since February.
Put simply, home prices are rising faster than home buyers’ borrowing power.
Call us to get the ball rolling
An unexpected jump in inflation has put a question mark over possible future rate cuts.
So home buyers can’t rely on future rate cuts for an uptick in personal borrowing power.
A better strategy is to talk to us today.
We can explain if you’re home loan-ready right now, and how to get the ball rolling on home finance before prices rise further.
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