Housing market moves into more active phase as interest rates fall
Falling interest rates are opening up favourable buying opportunities for both first-home buyers and first-time property investors.
The Reserve Bank of Australia on July 2 cut the official cash rate to an historic low of 1 per cent.
It was the second RBA interest rate cut in two months. The falling cost of borrowing money for housing will not only allow a proportion of borrowers to negotiate new bank loans at below 3 per cent – it’s also likely to work to boost stock levels, particularly of entry-level or budget-priced properties.
That’s because any downward pressure on borrowing costs encourages vendors, who may have been holding off from listing, to seize the moment. When interest rates go down, sellers recognise that the buyer pool for their properties is on the up. As a result, many make the decision to test demand and sell.
Nelson Alexander Sales Director Arch Staver says until now one of the easiest courses of action for many would-be vendors has been to “do nothing” and stay put in their current home.
Similarly, he says property investors have held off from selling properties. But this landscape is now changing as prospective sellers across the property spectrum recognise that the recent rate cuts have sparked renewed interest from buyers and hiked-up competition levels.
In recent weeks, Nelson Alexander’s office network has experienced an uptick in interest in listing from vendors. Buyer inquiry rates are also on the increase across inner Melbourne and the northern and eastern suburbs.
For first-time buyers or those targeting the purchase of their first investment property, here are some tips on what to look for before buying:
- Work out the value of the property by obtaining recent sales data in the area.
- Investigate up-and-coming developments and infrastructure.
- Look at floor plans and video walkthroughs online.
- Research local schools and shopping.
- Inspect the neighbourhood.
- Request a full copy of the contract.
- Organise a private inspection for a more detailed tour.
- Ask whether the vendor will accept an offer before auction.
Feel free to contact any Nelson Alexander agent to check on the new stock that’s coming onto the market.