market update

Mortgages & Loans,Personal Finance,Portfolio Management,Property

February Market Update

7 Feb , 2016  

Bessie Hassan

Bessie Hassan

Consumer Advocate at www.finder.com.au
Bessie Hassan is a widely published writer and currently Consumer Advocate at finder.com.au, one of Australia’s largest comparison websites. As well as being a word nerd, she’s passionate about helping Australians find better.
Bessie Hassan

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We’re already in February (where did 2015 go?) and the economy is already looking a little unsettled. Admittedly, it can be quite a struggle to wrap your head around the changing marketplace, but that’s exactly why we’ve created this wrap-up. Let’s have a look at the key recent changes in the property market.

 

  1. Speculation of a rate movement

The first cash rate meeting for the year kicked off on February 2, and while it was widely anticipated that the Reserve Bank would hold the cash rate at 2 percent, what has taken people aback is the forecast for the rest of the year. One survey of 29 Australian experts revealed that 34 percent expect a rate rise in 2016, while 52% are anticipating a hike in 2017. There is speculation that 2015 may bring about the end of the downward trend in this cycle – and if the cash rate goes up, so too do interest rates.

 

  1. Australians seem worried: Interest in fixed loans swells

Australian consumers may also be seeing the writing on the wall, with finder.com.au reporting exclusively to ProAdviser a surge in visits to their two and three year fixed home loans pages. To be more precise, two year fixed rates have swelled by 95% over the past 3 months in comparison to the same period one year earlier. Three year fixed rates are in a close second, with an 80% swell. It makes sense that consumers are looking to lock in a certain rate, given how low they start – for example, the lowest three year fixed rates on finder.com.au come from:

 

  1. Greater Building Society: 3.89%
  2. Newcastle Permanent: 4.09%
  3. Bankwest: 4.09%

 

  1. The property market may actually be cooling down

 

While everyone’s busy freaking out about property prices and the ever-increasing rents, it turns out there may actually be some cooling going on in the market. Primarily, investor lending was down by 6.2 percent in December, which comprised the bulk of a 9.2 percent fall over the entirety of 2015. For local owner-occupiers, a big thank you goes out to APRA, who implemented a 10 per cent per annum speed limit on investor lending growth. This significant change is still dripping into our economy now, and it’s a key time for potential first home-buyers to action those long-held property thoughts while the cashed-up investors are taking a back seat.

 

And there you have it – a concise roundup of where our market is right now.

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