Property Price Plunge?! When is the right time to jump into a cooling market as a buyer?

01st Jul, 2022 | In The News, Articles, First Home Buyer, Refinance

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This week, Australia's major banks and lenders passed on rate rises to fixed rate home loan products.

Banks and lenders justify these rate hikes by saying that they need to pass on their rising costs to their customers. Borrowers and mortgage owners alike are facing a difficult few months ahead, with the strain of rising interest rates, inflation and general uncertainty in the property market creating a perfect storm of stress for Australian households.

It’s no secret that the property market is slowly cooling off. Sydney and Melbourne, in particular, are seeing major price reductions across the board. Mark Bouris says this trend will likely continue for the foreseeable future, “as long as we continue to hear the Reserve Bank Governor talk about interest rate increases, or the need for them.”

The decision to pass on rate rises by banks and lenders have seen fixed rate products increase “to nearly double what they were one year ago,” according to Bouris.

“So that is a discouragement for a borrower to go and borrow money on a fixed rate loan, or in fact, borrow money at all. In addition, as a lender, I can lend you much less because I assess you on a much higher rate.”

So borrowers can borrow less, meaning “you can afford to pay less for property and the places where it has had the biggest effect [on property prices] is in Sydney and in Melbourne, but it’s actually started to drift right across the country. The only place not being hit at the moment is Adelaide. Even Brisbane is being affected by these price reductions across the board.”

As buyers start to put the brakes on their purchase plans, the question on everyone’s mind is: when is the right time to buy?

Mark says  there’s no need to overcomplicate it: “My experience in these situations is never think you can arbitrage the market.”

For Mark, no individual has the information or knowledge to “outsmart the market.”

“If you find the property you want to buy, if you’ve got the deposit required by the lender, if the lender approves the amount of money that you can pay based on your current salary, and if you’re confident your wages will continue as it is, then the right time to buy is right now. So it’s the right time when you get the approval, you’ve got the deposit and you find the place you want to buy.”

With the competitive nature of the current home loan market, there’s never been a more important time for Australian borrowers to turn to the trusted and experienced guidance of mortgage brokers. 

Whether you’re looking to enter the property market for the first time, or you think your current mortgage could be better, our experienced YBR Home Loans mortgage brokers can step in and do the heavy work for you to make sure you get a fair deal. 

Start a conversation with us today to see how we can guide you to a better deal!

Get it right from the start with professional help.

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