As we step into a new year, the world of Australian mortgages is full of both challenges and exciting opportunities for those looking to buy a home. Whether you’re a first-time buyer or thinking about refinancing, it’s crucial to understand what’s been happening in the market. Let’s break it down in simpler terms.

1. Home Loan:

In the past year, there’s been a significant increase in home loan activity, with investors taking the lead. Between February and September, the total amount of mortgage commitments went up by 9.5%, reaching $25.0 billion. People buying homes to live in saw a 6.1% increase to $16.1 billion, and investors saw a whopping 16.0% increase to $9.0 billion.

First-time homebuyers also took the spotlight, with a big 18.4% increase in the number of loans they took out.

2. Refinancing and borrowing

While refinancing with other lenders dipped by 7.1% to $18.5 billion, it’s still higher than usual. People also borrowed more for home improvements, with a 9.4% increase to $502 million.

3. Interest Rates

Even though the cash rate went up by 4.00 percentage points from April 2022 to September 2023, banks only increased their variable rates by 3.32 points for homeowners and 3.28 points for investors. This was because of competition between lenders.

4. Property Prices on the Rise

Most areas in Australia saw an increase in property prices in the three months leading up to October. Cities like Perth, Adelaide, Brisbane, Sydney, and Melbourne led the way.

5. Fixed Loans: Changes Coming

More fixed-rate loans are ending than new ones are starting. According to the Reserve Bank, most fixed-rate loans are expected to end by the end of 2024.

6. Predictions for 2024: What to Expect

Experts predict that home prices could go up by 7% nationally in the 2024 financial year because of a quicker-than-expected housing recovery. Big banks expect another rate increase in February 2024, making it the fourteenth hike since May 2022, with a potential peak at 4.60%. Keep in mind that big banks are also saying rates might go down again in late 2024.

Only time will tell if homeowners will see some relief in their mortgage payments next year and when the best time to invest will be. Crest Mortgages & Finance is committed to supporting you through these uncertainties, offering the confidence and expertise required to navigate market changes effectively. Feel free to contact our team at 02 4929 2552, and let’s arrange a meeting to customize the best strategy for your needs.