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Property Market Update – June 2021


Borrowers rush to lock in as banks increase fixed rates

It was predicted at the end of last week that fixed interest rates would begin increasing, and we’ve already seen banks rising their 2 year fixed rates as of Monday.

AMP Capital Chief Economist Shane Oliver said buyers who fear missing out on historically low-interest rates are likely to head to the market to lock in a loan this month, creating another spike in house prices in an already red-hot market.

It is important to speak to your broker to discuss how your options will affect you not only now but also once the fixed-rate term has expired.

Housing & rental affordability slides

Overall housing affordability across Australia has declined according to REIA’s latest Housing Affordability report.

The proportion of income required to meet loan repayments is up 0.1% over the quarter to 34.7%). Rental affordability has also followed the downturn with the proportion of income required to meet median rents increasing to 24.4%, up by 0.4 of a percentage point over the March quarter and 0.7 of a percentage point over the last 12 months.

As a result of this data, REIA pointed to a decrease in first home buyers entering the market, down by 4.4% this quarter.

Credit tightening might not be as close as we think

The RBA and APRA have repeatedly warned they would be watching for any signs of worsening lending standards. However, according to CoreLogic, although riskier types of lending are rising, it doesn’t seem to be substantial enough to trigger any sort of regulatory response, for now. However, it will be interesting to see how policymakers and regulators share the same view. Click here for the full CoreLogic’s report.

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We recently refinanced a client who was absolutely thrilled to hear that we saved her over $15k in the first 12 months of her new loan! What a brilliant result!

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