Curtailment in Interest Rates Bestows New Lifeblood – Australian Property Market
The recent curtailment in the interest rates turned out to be a revelation to most of the people. Now, the country ‘s property market stands again back to its feet as the second largest bank; Westpac records a decisive 10% lift in the applications for the home loans. Due to the availability of lower mortgage costs, the consumers seem to be keen in order to spend more. The situation is not different if we talk from the viewpoint of ANZ Bank. The bank is observing ‘above decent’ levels of applications requesting for new loans.
As per the reports submitted by Sydney Agents, the demand is soaring at auctions and open homes since the curtailment in the rates of interest. In the last week or two, the auction listings are increasing up to a tremendous extent.
It is a fact that over 600 auctions are about to be held this weekend and more to follow in the due course of time. The financial regulators (including the Reserve Bank) are keeping a close eye on the real estate market. It is especially for Sydney as there are concerns that this race of landlords to purchase the best has made the market “unhinged”.
But there is one more challenge that the financial regulators are observing conspicuously. There is a segment of the consumers who are not showing much interest in the properties in spite of the low-interest rates. Instead, they are using this time to pay down their debts more swiftly. It is a challenge to convince this segment of consumers to give preference to the prevailing opportunities in the property market due to low-interest rates.
The anticipations of Westpac were higher than the present rush of the customers in order to save the loan payment in the household budgets. But things didn’t turn out to the bank as in the previous years. Westpac has curtailed the standard rate of variable mortgage slightly higher than the official cut this month by the Reserve Bank of Australia (RBA).
Due to the record decline in the rates of interest, the first home buyers are facing the bitter reality of the investment world. The first home buyers are lagging behind the investors while competing at the auctions. The reason is that the investors always have the edge of tax breaks when it comes to the payment of the interests.
Both Westpac and ANZ have expressed their concerns for the general occupiers/ owners. That’s simply because of the reason that number of people are purchasing the first property in the form of an investor.
The market reports clearly indicate that the standard age of the investor borrowers is dwindling on a constant basis. As there is quite a buzz in the Australian market about the problems that the young people are facing to get access to the housing market, the reports of Westpac are certainly encouraging. As per it, a first time buyers are now getting access to the bank in the cloak of investors.