In property, all things go in cycles. We have entered a new cycle and the clear winners of the next phase are people living in their own home.
Owner occupiers looking to buy a home now have a clear run – without being crowded out by investors.
Investor loans are now more expensive than owner-occupied loans. This, coupled with the fact that investors are no longer seeing the extraordinary price rises of the past, means that there is much less fizz in this market. As result, auction clearance rates were much more akin to normal levels rather than the extraordinary levels we see in property bubbles.
What this means is that buyers no longer feel as rushed. Nationally, there are now 363, 653 properties listed for sale – an increase of 7.3 per cent on the previous month; home buyers now have much to choose from.
But with Australia’s economy doing okay (if not stellar) and with our population still growing, there is enough fundamental demand to ensure prices hold.
Not only has property entered a new cycle, but finance has too; there is now a war between the lenders to get your business – and again it’s owner occupiers who stand to benefit.
One of the main drivers of property cooling down has been APRA (the Australian Prudential Regulatory Authority) pressuring the banks not to be over-exposed to investment property. As a result the banks will lend less and at a higher rate to investors.
Of course, the flip is true; the banks will be more generous to home owners. In fact, the banks are now falling over themselves to get the business of owner-occupied borrowers. As the property market cools down, rather than chasing buyers, the banks are now offering sweeteners to encourage borrowers to refinance.
One regional bank is now offering $1,500 cash to refinance. And for clients introduced by a broker, another is offering 250,000 airline frequent flyer points – where could they get you to?
With property prices flattening and finance still easy to come by – home owners are in the box seat.