Financial Relief Ahead: What to Expect for Home Loans in Early 2024
In This Week’s How's The Market | Edition 89
Financial Relief Ahead: What to Expect for Home Loans in Early 2024
The Final Push For Real Estate In 2024
A Mid-Century Gem: The Story Behind an Iconic Estate
Financial Relief Ahead: What to Expect for Home Loans in Early 2024
Borrowers anticipate financial relief in 2025 as they seek relief from mortgage pressure.
Mortgaged homeowners are eagerly anticipating lower home loan rates, as they anticipate leaving 2024 behind.
Commentators anticipated interest rates to be cut by now, but the decision to introduce rate cuts has been repeatedly delayed throughout 2024.
The Reserve Bank of Australia has maintained the cash rate at 4.35%, indicating a potential rate cut in February 2024.
The RBA maintains that despite a decrease in headline inflation, underlying inflation remains high, indicating a need for a more restrictive cash rate.
Mortgaged homeowners anticipate multiple rate cuts starting in 2025, benefiting over 1.6 million at risk of mortgage stress, with the good news being that these cuts will eventually occur.
REA Group's senior economist Eleanor Creagh predicts that interest rates will begin to decrease in February, despite differing forecasts from major banks and economists.
Ready to pounce
Australians are resolute in their pursuit of property, considering various financial options such as refinancing and property purchases.
Mozo survey reveals 39% of consumers are waiting for property price drops, 11% caution about mortgages, and 6% anticipate better financial conditions with rate cuts.
Waiting for lower rates may seem safe, but the stakes could be higher than realised, with 7% of buyers fearing higher property prices once rates drop.
Many of the buyers we are chatting with (admittedly, many of the clients we work with are likely more sophisticated in the world of real estate and finance) want to purchase properties before interest rates drop as they anticipate higher growth and more competition at that time.
We do tend to believe this will be the case and that the remaining months of this year look like a great time for buyers in Melbourne.
What The Agents Are Saying
We are in the final push for a lot of real estate agents this week and the more agents I speak with, the more I am noticing that we are in a buyers market.
Chatting with an agent in the outer east this week, he was telling me that buyers have a lot of choice right now and that the vast majority of properties are being sold with only one buyer.
Their market is dominated by 4 bed, 2 bath, 2 car properties on full-sized blocks of circa 600m2, and currently, there are so many to choose from that only properties with wow factor appeal are getting inspected.
Speaking this morning with another agent from South Yarra, she was telling me that the apartment market is really struggling with anything that is slightly compromised. I inspected a property with her for a client in Hawthorn a few weeks ago that goes to auction on Saturday.
This property was priced well but had some privacy concerns, even though it is cheap buyers have been reluctant to come forward and she believes it will pass in over the weekend.
Last Saturday we successfully purchased a property in Camberwell for a client that sold for less than what I initially expected. This was a beautiful period property that had a modern extension at the rear in a good position on its own block.
The agents were telling me it was very well inspected and they were expecting 3 - 5 bidders on the day.
We ended up being up against only one other bidder and had the property passed in to us which was a surprise to all involved.
As we get closer to Christmas, a lot of buyers are also becoming quicker to pounce on good properties and having multiple properties lined up that they are ready to make offers on.
This has made it harder for agents as they will have 3 hot buyers for a property, but come to auction day, 2 of those buyers may have already purchased other properties which makes it very difficult to then sell for great prices with no competition.
The Wow Factor!
58 Hopetoun Road, Toorak, Vic 3142
Hopetoun Road in Melbourne boasts 6000sqm of botanical gardens, lawns, pool, court, and an enduring mid-century master's work, showcasing its beauty and exclusivity.
The home features spacious rooms and a parklike surround, showcasing the mid-century sophistication of the city.
The property's unique past and future promise make it a stage for a glorious future, as evidenced by its long-standing ownership by its current owners.
Check out the facade and the period details!
Price Guide:$58,500,000 - $64,000,000
In The Media
What does a Trump government mean for Aussie mortgage holders?
Trump's reelection to the White House has raised some concerns among certain Australians about international markets' reactions and the extent of US politics' impact.
Australia is making progress in combating high inflation, with mortgage holders facing the highest interest rates in over 12 years post-COVID to counteract inflationary effects.
Australian Governor Michele Bullock has vowed not to be influenced by similar economies, including the US, in its response to the Reserve Bank's desire for rate cuts.
RBA assistant governor Christopher Kent predicted higher US deficits due to tax cuts following the Republican victory in the senate.
The US's significant borrowing demand and significant funding source will have upward effects on global interest rates.
Exchange rates play a crucial role in Australia's economy, influencing financial flows and trade with other nations, despite being far from the US.
The US's higher inflation could raise the federal fund rate, but its impact on Australia is uncertain, primarily due to speculation.
Final Thoughts
According to the RBA, some buyers are holding out for a rate decrease before assessing their purchasing power and trying to enter the market so they may feel more at ease about their repayment obligations.
My thoughts are, if you are ready to buy now, you would likely be better off buying now and having interest rates come down after your purchase than waiting for everyone else in the market to have higher borrowing power too, as this will likely also cause a rise in competition.
If you or someone you know would like assistance to buy this year in these markets, book in a call and we can discuss if we can help.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
