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1. Australian housing market continues to defy the odds.

Many predicted Australia’s housing market to cool significantly in 2017, and this has largely failed to play out. Apart from certain segments such as mining towns and inner city apartments (Brisbane and Melbourne), prices on a whole have continued to move forward. Sydney and Melbourne house prices have retracted of late, but there hasn’t been the significant drop off that was expected by many.

 


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2. The Australian Prudential Authority – APRA (the governments chosen body to monitor the banking system) made some sweeping changes.

They restricted the amount of interest only loans banks could have on their loan books and they restricted the amount of investment loans banks can fund each month. This lead to increases in interest rates for interest only loans and investment loans as a whole.

What we can expect from 2018


1 Brisbane and south east QLD house prices (units excluded) to continue to either remain steady or increase slightly (depending on the area).

As long as economic conditions remain the same, the Brisbane housing market looks set to continue to increase as the amount of people moving from Sydney and Melbourne to South East QLD appears to be on the rise again. as many baby boomers take advantage of selling homes down south for sometimes $2 million dollars and are able to buy a nice place to retire for $650,000.


2 Brisbane inner city apartment prices to continue to soften,
but by how much?

The fact that banks have started to ask for more deposit for people wanting to buy units in inner city Brisbane, says that they are concerned about the oversupply. Prices have already softened, but how much further they come down in 2018 is the real question.


3

Interest rates to remain flat or increase slightly.

Financial markets expect the RBA to put interest rates up this year. If they do choose to increase interest rates, we only expect it to by 0.25% and to be towards the end of the year.


My financial focus for 2018

1. I will be continuing to opt for a variable rate and pay a bit extra every month on the home loan – this continues to be one of the simplest yet soundest pieces of financial advice out there

2. Will continue to remember that property is just one asset class, and just on place to invest, others such as shares and fixed income (interest earning accounts often used in super funds) should also be considered as part of an overall wealth building strategy

3. Remember the basis – like good health, being in a secure financial position usually comes as result of good regular habits every week or month. As humans were often not great at this and want quick solutions, to long term areas of our lives. Therefore making an extra repayment to your home loan that is automatic and does not require you to think about the payment regularly is the best suggestion I could give.

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