There might not ever be a better time to enter the property market with official interest rates on hold at an all-time low.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The Reserve Bank of Australia opted to leave the official cash rate on hold for a fourth consecutive month with 4 per cent loans the norm.
The likelihood of future rate rises might be the only deterrent for first home buyers.
“There won’t be an easier time to enter the market,” Century 21 Ransom Real Estate owner Greg Ransom said.
“If I was a first home buyer I would be looking at locking in on some long-term rates.
“You would have to think there’s value in locking in at a rate that you can budget on.”
If past trends were any indication, Mr Ransom said the Maitland market would increase again in the not-too-distant future.
“If in five years time the market does go up 20 or 30 per cent, look how much equity they will have,” he said. “In 28 years I’ve seen it all come and go with three or four rise cycles in that time.
“It will come again and there’s no time like the present.”
The RBA left rates on hold partly because China’s economy continued to weaken and bring down stock prices.
But the RBA refused to cut rates any further in fear it would further stoke a red-hot Sydney property market.
Pitcher Partners tax and business advisor Michael Minter welcome the RBA decision, as widely expected as it was.
“The China slow down has created volatility, which we’ve seen in the stock market, and that tends to undermine confidence,” he said.
“With any investment you have to do your homework before you invest whether it’s in property or shares.
“With any investment it’s always long term, so there will be short-term ups and downs.”
The safest bet, the firm partner said, was for people to borrow in no more than they could afford to pay back regardless of the investment.
“If someone has to overstretch now to get into the market the risk is that rates will inevitably go back up,” he said.
With rates low and Maitland largely insulated from Sydney’s stove hot property prices the temptation to dive in is real.
“The banks are keen to lend if the fundamentals are right,” Mr Minter said.
“With some luck, the low rates might serve as a stimulus in regional areas, including Maitland, in housing and the commercial space.”
