Confidence returning to property market
By Carey Smith, Ray White CEO
Potentially there is a higher level of lending occurring through the main stream banks. This has been facilitated by a further reduction in the Official Cash Rate which now sits at 2.5 per cent, the lowest it has been since the Reserve Bank introduced the OCR.
One other key factor which is being seen in the mortgage market is the number of home loan pre-approvals that are occurring. This has hit its highest level and has been a catalyst for people purchasing property in a particular price range rather than a geographic area: a buyer used to attend a property and then seek finance, whereas now, a buyer seeks finance and attends multiple properties to find the most suitable.
The finance sector has seen a need for more deposits and while banks are indicating that interest rates are dropping, this has been offset by deposit rates, which remain around 2 per cent higher than the OCR because of the need to attract money to pass on to lenders.
This month Loan Market has increased its mortgage broker numbers to 46 and the increase in lending was 46 per cent up on the same time last year.
A degree of confidence has returned to the financial and property markets, as indicated through the April real estate sales figures released during the past week. The turnover of housing continues to strengthen from last year’s figures and this means a back-to-back increase in sales numbers, which has generated a degree of optimism in the market.
There is a shortage of housing stock in the marketplace and this has been caused by the increased sales numbers and also vendor confidence. This may be an indication that prices will continue to strengthen and that will in turn be holding vendors back from listing their property.Tags: banks, Finance, home loan pre-approval, home loans, housing, lending, Loan Market, mortgage, OCR, official cash rate, property, Reserve Bank