Katie Bice: Why now is the perfect time to enter the real estate market
Conditions to achieve the great Australian dream of owning real estate have never been better, so stop complaining, quit making excuses and start planning to break into the market, writes Katie Bice.
Opinion
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Aussies have a strange relationship with real estate. We covet it as the Great Dream but then spend nearly all our time whining about it: the size of our mortgage, how expensive houses are, how banks aren’t giving us the full interest rate cuts …
But here is some tough love. For most people, there has never been a better time to buy a house.
If you are complaining about how you can’t break into the market, just stop. If you think you can’t afford it or that the odds are unreasonably stacked against you, then you’re never going to get into the housing market.
You might as well quit now, because it means you are either unwilling to compromise or
waiting to be gifted a house.
Look at it this way. Property might be more expensive than it was 20 years ago but interest rates have never been lower.
We’ve been enjoying this lucky break for a while now, with predictions of another rate cut to come.
The Reserve Bank has kept the cash rate at two per cent or lower since 2015. After this week it’s the lowest it’s ever been.
Its costing banks less to give us loans so — in theory — they are more willing to pass on the full cuts to us. They can also loan us more.
All that is quite a difference from the early 90s when it was as high as 17 per cent. Imagine trying to pay off a loan when the heavy interest rate made you feel like it outweighed the worth of your entire home.
The market isn’t rocketing along at the unsustainable rate it was two years ago and the softening has made it easier not just for people upgrading but first-home buyers to crack the market.
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We might have caught the rough end of the stick on the price ladder but its also made those who have sacrificed to buy either instant “asset” millionaires or given them the best return on an investment they will ever make.
Last week new research was released showing it’s now cheaper to pay a mortgage than rent in popular inner suburbs including Carlton, Kensington, North Melbourne and Southbank.
If that’s not an incentive to get out of the “I can’t afford it” headspace, I don’t know what is.
Without the upheaval a change of federal government would have brought, the economy is also stabilising after a short period of uncertainty.
Things are looking rosy and we need to start looking at it that way.
— Katie Bice is the Sunday Herald Sun deputy editor.
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