Our property market right now? It all comes down to market confidence and sentiment ...
If you believe all reports post-election, the consequence of a Liberal win has steadied the ship and returned a rumbling of optimism to the market.
Investors know that they can now enter the market without the threat of changes to negative gearing rules which would impact upon them.
The signs are there that house hunters who may have been sitting on the fence as to whether it was in fact the' right time to buy', are entering the market again. If the report this week by CBA is anything to go by, the number of home loans applications the bank has received in the week following the federal election hit a ‘six month high’.
APRA last week also announced that the ‘mandated buffer’ at which most home loans are assessed (sitting around 7.25%) is no longer warranted, recommended the banks reduce this buffer.
The APRA recommendations are yet to be acted upon by any bank. If they are, a reduced assessment rate will benefit borrowers by increasing their capacity to obtain a loan.
The RBA has also strongly suggested that a cut of the base rate is highly likely at the June 4 Reserve Bank meeting.
It may be argued that cuts to taxes and other government stimulus measures (including the First Home Owner Scheme) may also have an impact in lifting market sentiment.
Whatever the case, I think we can all agree that considered measures which bring certainty and optimism to the market are of benefit to all.
Watch this space.