G’day Viewers
Generally speaking, interest rates are bad news for most people. It usually means higher repayments, less disposable cash for the family, sports or hobbies.
With yet another one or two, possibly three, interest rate hikes to come, the future looks a little jaded for owner-occupier home buyers. While it is fairly doubtful that we will return to the rates of the late 80s at around 17-18%, heaven forbid, any increase in living expenses on top the effects of current world and local events has a drastic effect on the homeowner.
There is however one group of people who are rubbing their hands together gleefully. Who would that be? Those would be the people who watch the various segments of the property cycle and who plan ahead as to when to buy and when, or even if, to sell. These people are the investors! Many investors currently on our books have us on the lookout for fire sales so they can take advantage of fire sale prices to advance their own wealth.
What’s a property fire sale? This is the result of all those people who, over the last two years, either overpaid for their new home or borrowed more than they could actually afford further down the track. Have a quick look at this newsletter from a few months ago where we discussed buying what you can afford now as well as later: https://bit.ly/3GyBaTq. Paragraph two specifically.
I think we all saw some people paying well over the asking price for property over the last couple of years. With property prices stabilising and adjusting in many areas, these people will be starting to feel the pinch. Some may well be forced to sell at a lower price than what they paid, hence the “danger” we mentioned in the article referred to above.
In the early stages of buying a property, have a good talk to your mortgage broker about what you can afford and how much of a buffer you should have. Sometimes, you can plan ahead and be ready when life comes along and punches you right in the face. Be ready and roll with the punches.
As for keeping your property aspirations under control, come and speak to PPBA. We make a habit of buying what you want while keeping well inside your budget so you can roll with those punches if need be.
Call now – 0490 020 801
