Housing prices are on the decline. It's the headline that we’ve come accustomed to over the last year and a half or so. But that doesn’t mean we should sit back and wait for the stars to align to start considering building a home.
Today, we explore three key (and arguably the main) factors that everyone should consider before embarking on the journey of building your own home: interest rates, the housing market and your lifestyle.
Interest rates are not only going to determine the monthly repayments on your home loan, but they also determine your capacity to borrow, and ultimately at what point you’ll have your house paid off.
Interest rates are set by the Reserve Bank of Australia and ultimately guide the home loan lenders mortgage rates. Commonly, loans over a 30 year term will see various rate rises and falls, and at the minute they can’t go much lower! Moreover, the increasingly competitive lending sector has banks somewhat scrambling to seduce customers with very competitive loans at comparison rates not seen for years.
Corelogic Research Analyst, Cameron Kusher notes, “With advertised stock levels remaining high and mortgage rates tracking around the lowest level since the 1960s, and potentially moving even lower later this year, active buyers are back in the driver's seat to take advantage of improved housing affordability and the low cost of debt.”
And that’s great news if you’re in the market to build a new home.
When will it rise, when will it fall? The great mystery of the housing market is as confusing as it is complicated. Of course, no one wants to lose money through housing investment, but how do you know when to build? The good news, it appears the worst of the uncertainty is behind us.
“We are seeing further evidence that the worst of the housing market conditions are now behind us,'' Corelogic's Head of Research Tim Lawless said. “In December last year, Sydney dwelling values were down -1.8 per cent, with the pace of month-on-month falls progressively moderating back to -0.7 per cent in April.”
Further backing the data, HIA Senior Economist Geordan Murray believes that “This moderation in the fall in new home sales suggests that the credit squeeze is easing as the market adjusts to the new lending norms.”
Encouragingly, HIA-Colorbond Steel housing data suggests that 2018 was one of the strongest for new home builders on record, with 220,000 homes commenced Australia wide. And as NSW’s number 1 ranked home builder Clarendon Homes contributed to 1,217 of those new homes.
So what does all this mean for the market? Of course there's no guarantees, but there is great optimism that things are on the up as noted by Moody’s economist Katrina Ell, “A slow housing recovery in 2020 is likely as the local economy improves thanks to population growth.”
Are you building a new house, or, are you forging a better lifestyle for yourself and your family? At Clarendon we see it as both!
A large portion of your life is spent at, and around your home. Whether it’s relaxation, entertaining, or coming home to a beautiful space to spend time with your family, creating an environment that makes life that much easier and complements your lifestyle is what we do best.
We have a huge range of beautiful homes and inclusions that are just waiting to be built in these more favourable market conditions for our customers. Sydney Mortgage Broker Scott Durannt summed it up perfectly a year ago when he said;
“If you’re a homebuyer with the intention of staying put for the next 10-20 years, I don’t see the point of putting your life on hold in the hope of saving a few dollars based on a possibility the market may fall.”
With signs pointing to the market bottoming out and interest rates at 1960’s levels, don’t put your life on hold. Come and visit one of our display centres and chat to our friendly staff about what it would be like if you lived in one of our Clarendon Homes!