2021 was a record year for lending with Australians borrowing more on housing than any other year on record. Many economists are now saying that they believe lending frenzy has likely peaked as borrowers are now seeing a return to higher interest rates.
Over the final months of 2021 we started to see a lift in interest rates for fixed rate loans as the global money market started to rise again. With changes that were also brought about by APRA, lending criteria has also tightened, meaning that the average Australia can now borrow around $50,000 less than they could before.
So, what does this mean for lending in 2022? We’re a lucky market in Brisbane. We’ve not struggled through Covid like our neighbours, and what we are now seeing is people moving north. There is a new influx of people moving to Queensland but we are also seeing a large rise in interstate investors as they take advantage of what is cheaper property prices than Sydney or Melbourne. These people are finding that their banks are not as accommodating to let them get to where they need, and that is why they are reaching out to mortgage brokers. We know the policies across the lenders and where to assist clients to maximise their affordability for a new property. This can move clients from one price point to the next.
We believe that the growth will continue strong in our Brisbane market and we are excited for the year to come.
Although some bank branches may be temporarily closed during lockdown periods, the vast majority of bank staff are working and ready to help.
Are the banks taking longer to process loans than usual?
Not really, banks are currently taking longer than normal but this is not due to any lockdown. Most lenders already have protocols in place so that day to day life carries on as normal. Signing of mortgage documents can be a little slower if you are unable to meet up with a qualified witness but we do have work arounds in place.
Is now a good time to refinance?
Absolutely. Now is an amazing time to review your situation. The official cash rate in Australia continues at its record low – however – we have seen some longer term rates increase, so now is an ideal time to review your loan. Home loans are no longer a set and forget product as our lives are increasingly varied. At Time Home Loans, we recommend you review your home loans annually – or every two years at a minimum.
While rate is important, how you use your loan and the way it is structured is vital – and will save you in the long run. With access to over 50 banks and hundreds of different loan products we work with you to find the loan that suits your individual circumstances.
Can I still view open homes or attend auctions?
Every agency has their own procedures in place, but many are holding private in-person viewings. Many agencies have really upped their game to allow you to virtually inspect properties and even hold virtual auctions. If you are a home buyer and have not yet secured pre-approval, now is a good time to do so.
What will happen to the Brisbane property market?
“Over the past 12 months, the median house price has gone up by almost $78,000, which is around the average Queensland annual salary. Property experts claim this moment in Brisbane property history is just the beginning, with the city’s successful success Olympics bid tipped to fuel further growth.” (Sarah Webb, domain.com.au July 29, 2021) Interestingly – our median price is $731k less than Sydney’s, 344k less than Melbourne and 337k less than Canberra. Additionally, Auckland’s median price is $1.14m. Mix this with growth associated with the 2032 Olympics and it would be a reasonable prediction that prices will continue to grow for some time. Having your finance sorted in this market is vital – whether it be a pre-approval for a purchase or reviewing your current lending to make sure you are appropriately structured – they key is to get in contact earl