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As the RBA has slashed the official cash rate, we have seen interest rates fall by 0.5% in just a 2 month window of time, causing everyone to ask the question, how strong will property grow on this cycle? Will the growth be moderate or will it boom again? Today let's explore these factors:
When we look at buying property, we always want to have the best timing of buying in at the lowest point in a market cycle and when we want to sell, aiming for the highest time in the future cycles. The lowest point in the Melbourne property cycle is now behind us. In the middle of winter, the signal came to buy property Now!
When purchasing property there are a few calculations that the lenders abbreviate and both the LVR and LMI are two of the most common ones. Often when I have spoken to people, they may have an idea on them but don’t actually realise the full meaning and how they are best used when it comes to property.
We have a distinct new phase in the property sector, one without parallels and without the fanfare! Since the smooth transition from the Federal Election we have seen two other key elements have impact on the property market. The lesser of these was the RBA interest rate cut, the other has far more long-term benefit but has hardly been mentioned. This is the APRA set levels for serviceability assessment and the banks own safe lending assessments. These appear to be a return to commonsense.
In this upcoming Federal Election, the Labor Party have put Negative Gearing as their major policy they will introduce should they gain Government. This policy had remained the same for almost 15 months, but are we now seeing signs that it may have only been appropriate to a small window of time in our property history and that time has now passed.
Property prices at present are very patchy, with some areas and price ranges lower, then others are still increasing in the Melbourne Metro region, now, today............ yes even in this current market. Why you may ask, well lets start with a firm understanding of how we truly examine and verify a real estate price in ANY marketplace.