The recent out of cycle interest rate increases by banks may see the property market slow down. Property demand according to relestate.com is driven by interest rates and housing affordability issues. While demand for housing has grown by approx. 16% in 2016 this is not expected to continue in 2017.
Victoria has seen some of the largest drops in demand but this has been largely driven by drops in demand for apartments. Mortgage Broker What If We Finance believes this has been driven by the rapid growth in supply of apartments, the tightening of bank credit policy when it comes to lending off the apartment and also property buyer nervousness.
Consequently demand for apartments according to realstate.com has dropped off by approx. 7%.
What If We Finance believes this sets ups for an interest 2017 as the RBA has indicated further cuts to the cash rate may come later in the year but banks are indicating by their recent behaviour they may not pass on the rate cuts. This may impact investors and first home buyers.
What If We Finance do not believe property prices will fall across the board and a targeted strategy and ensuring you have the home loan best suited to your needs will ensure you are best placed to take this period of uncertainty. This means you should contact your mortgage broker today to review your home loan.