Is it really a bad time to buy a property or invest in real estate? With home prices holding steady and mortgage rates at an all-time low, the seemingly correct answer to that question is no. Now is the best time to get in on the game.
Yes, Australia has entered into an official recession after two consecutive quarters of negative growth. New South Wales was hit hard, with its state economy shrinking around 8.5 per cent. It is important to note this decline is due to outside circumstances — a pandemic. The state and federal governments have taken measures to help boost the economy and protect consumers during this downturn. Whilst it may seem a bit bleak now, the International Monetary Fund predicts the Australian economy will rebound by 6.1 per cent in 2021.
Despite this post-COVID economy, it still is a favourable time to invest in residential or commercial real estate for sale in Canberra.
There is nothing like a recessed economy to encourage lower interest rates for borrowers. Competition is fierce among lenders, with the official cash rate at 0.25 per cent. This is an all-time low. As of 31 August, the average interest rate for a variable-rate mortgage was 3.4 per cent and 2.97 per cent for a fixed-rate loan. There is room for negotiating a bit on rates and terms, with so many creditors hoping to entice businesses away from their competitors. The good news is that whether you’re buying residential or commercial real estate, the low mortgage rates are applicable across the board.
Tip: This rate war is expected to intensify as the year finishes out. Take care to compare loan options across multiple lenders to achieve the maximum benefit of these low-interest rates. Do not be afraid to haggle amongst lenders.
Real Estate Inventory
Real estate inventory for sale is tight heading into the fourth quarter of 2020, giving homebuyers less of an edge when it comes to negotiating a sales price.
Tip: If you are in the market for either a residential or commercial property, do not wait. Work with a knowledgeable real estate professional to help narrow down properties within your budget so you do not miss out on these incredibly low-interest rates.
Real Estate Pricing
Broadly speaking unlike interest rates, the sales prices for residential and commercial real estate are not dipping. In fact, they are holding steady and, in some cases, are on the rise. Whilst this is not the best news to buyers hoping for a bargain, the consolation is that interest rates are low enough to offset the pain. It also helps to know that even amid an economic downturn, property value has held strong.
Tip: Whilst some price negotiation may be possible, do not risk losing out on the property of your dreams by waiting too long to put in a reasonable offer. Buyers might need to prepare themselves for the possibility they will need to craft offers higher than the asking price if they are determined to snag a particular residential or commercial property.
Trying to get a pulse on the real estate market in uncertain economic times can be frustrating. The Trilogy team leverages its knowledge, experience, perspectives, and purchasing power to help clients get the most bang for their buck. Phone us on 1300 657 132 to schedule a no-obligation consultation today.