If you are looking for information about what lies ahead for buying property in 2016, you will find an abundance, but as someone once said, “Bad news sells papers. It also sells market research”.
It doesn’t take too much internet research to find a lot of information packaged to sell, focusing on the negatives.
Instead, it’s time to take an unashamed “glass half full” look at the 2016 property market. Here are four reasons to approach 2016 with confidence when it comes to buying a home.
1. Interest rates continue to be low and are tipped to go down.
In May 2015, the Reserve Bank of Australia cut its cash rate to a record low 2%, a rate which has remained unchanged ever since.
Many economists are saying that it is becoming highly likely that on the back of global market shudders and the prospect of a weakening Chinese economy that the reserve bank will cut interest rates mid-year in 2016. Reserve Bank Governor Glenn Stevens hinted at this in November when he stated that the next rate move would “almost certainly” be a cut.
The resultant savings in interest payments could easily amount to hundreds of thousands of dollars over the life of the mortgage.
2. Home prices are stabilizing
For the first time in years, economists and industry experts are predicting that rather than prices steadily going upwards, they will be stabilising in many regions.
Although different markets across the country will vary, as house price growth slows, buyers should ready themselves to capitalise. A slower market is particularly good news for first home buyers.
3. Big picture Australia
Renowned social commentator, Bernard Salt, suggested that buyers need to ignore the doom-and-gloom headlines, and look more broadly at what Australia has to offer.
He argues that Australia is a young, vibrant country with strong levels of population growth, very aspirational and rich in terms of income per capita.
“We are as rich as Americans, some say even more so depending on how you measure it. We are more egalitarian. Our cities are more attractive places to live. We are an overnight flight away from China.
Mr Salt rightly points out that if buyers heeded the headlines that inevitably circulate each year, no one would ever buy a home.
2016 will be a year to scratch the surface, to discover the gold underneath the inevitable doom and gloom.
Property will remain a great investment for those prepared to do the research and build relationships with those who may have a better understanding of property. As financial guru Warren Buffett advised, “Be fearful when others are greedy and greedy when others are fearful.”