Australia’s property market continues to heat up as 2 major banks slash home loan interest rates while closing in on RBA’s cash rate decision for February.
Westpac, on an attempt to increase their share of the property market, slashed a range of its investment home loans recently. The bank’s five-year Premier Advantage Investment Fixed loan is now down to 3.19 per cent (4.40 per cent comparison rate) from 3.69 per cent. The major bank also made cuts ranging to 19 per cent to 50 per cent to other fixed home loan packages. Westpac is working to increase its investment market share with several investors planning to enter the market. According to the Australian Bureau of Statistics, new loan commitments for property investors increased by 2.2 per cent in November 2019.
ANZ axed a number of its savings account interest rates to lowest yet including home loan rates. ANZ’s Simplicity Plus now has a 3.12 per cent p.a. from 3.24% per cent p.a. The major bank also reduced its Simplicity Plus home loan package for borrowers with a loan-to-value ratio of at more than 80 per cent from 3.58 per cent p.a. to 3.38 per cent p.a.ANZ and Westpac are not the only banks to cut home loan rates. Bankwest, Commonwealth bank subsidiary and Bank Australia also joined what is now being called the ‘home loan rate war’.Bankwest made cuts on all of its fixed-rate home loans for both owner-occupiers and investors. Bank Australia now joins the lenders club offering rates below 3 per cent with a basic home loan rate of 2.95 per cent.
With January now over, the Reserve Bank of Australia will release its cash rate decision. RBA’s cash rate remains unchanged since October 2019 at 0.75 per cent. There are a lot of expectations for RBA to retain the cash rate or even reduce it further. According to RBA’s statement last December 3, 2019, “the outlook for the global economy remains reasonable. ”Westpac expects no changes in cash rate this coming month but they are hopeful for another cut in April. They also believe the cash rate will be down to 0.25 per cent in August.
Investors all over the country are making big adjustments with favourable property market conditions persisting. More properties are also entering the market with higher auction volumes in big cities like Brisbane. According to Corelogic, Brisbane city now has 45 per cent clearance rate and volumes. Investors and owner-occupiers will continue to take of these developments, mostly in regions that show great value like the SEQ. For more information about the property market in the SEQ or any specific area in the region, contact Gallery Group today.