You’ve probably noticed the housing market is going a bit crazy at the moment. The property market is currently experiencing a boom phase, which means housing affordability is gradually becoming tougher.
It is currently predicted that Sydney’s median property price would increase by 7% to 11% in 2021. Heres all the details you need to know about Sydney’s current property boom.
Interest rates are unlikely to rise for “at least 3 years”
Interest rates have never been this low.
Home loan rates seem likely to stay at ultra-low levels for the foreseeable future. Reserve Bank governor Philip Lowe has also stated that the RBA board did not expect to increase official interest rates “for at least three years”.
Naturally, when interest rates are so low, they tempt people into the market. With so many people in the market, there will be hot competition for Sydney properties in 2021, which will push up prices.
Government reforms will stimulate buyer demand
Two big reforms, which are due to be introduced in 2021, are also likely to increase buyer demand.
1. Under the NSW government’s stamp duty reforms, buyers will have the chance to either pay stamp duty upfront, or an ongoing property tax. A lot of borrowers will choose to pay the property tax, which means they’ll need less savings to buy a home. So we can expect more buyers to enter the market.
2. The federal government introduced a new legislation on December 9, which had removed the ‘responsible lending obligations’.
Under the government’s reforms, lenders have more confidence to approve loans, which will speed up the process, lead to more borrowers being approved, and for larger amounts. Again, this will lead to more buyers entering the market.
The sooner you buy, the less you’ll pay
Thinking about buying in 2021?
If this is the case, it might be best to take action sooner rather than later, because if the market keeps progressing as everyone expects, the earlier you buy, the less you’ll have to pay.
A good first step is to speak to our team at KBRZ to assess your options. If you are currently interested in purchasing a property, or if you have any further questions, please feel free to contact us today. With our extensive network and years of experience in the industry, our team at KBRZ can provide tailored investment loan solutions that will allow you to maximise your wealth regardless of your circumstances.