Traditionally, the real estate experts crown spring and summer seasons as the ideal time to buy property. Even online, you can find many figures pointing toward the real estate industry going into hibernation during the colder seasons.
So, should you slow down your dream home search this winter? Our answer is NO!
Why is it a good time to buy now?
One needs to understand that the seasonality of a market varies from location to location. Yes, for many cities, the summer months tend to be the top-selling season, and nationwide considerations like the school year – contribute to a seasonal slowdown in the winter months, but each market has its nuance.
After the COVID-induced property boom, the South Australian housing market with robust buyer demand and unseasonably high sales volumes is showing no signs of depreciating in the coming months. Furthermore, Adelaide’s rising housing values make it a consistent charmer to the property investors. This change in trend can also be attributed to the record-low interest rates that continue to keep buyer demand hot in the Adelaide property market.
Why property investors choose to buy property in Adelaide? Click here
At Ouwens Casserly, we are still seeing preliminary weekly sales at levels similar if not higher to those seen in the hotter seasons, and demand remains strong. While it can’t be defined as ‘the new spring’, the winter housing market this year is expected to be busier than ever.
The RBA cash rate will impact borrowing power
Earlier this month, the Reserve Bank of Australia lifted its official cash rate for the first time in more than 11 years. Since then, the majority of banks & lenders have lifted their variable interest rates accordingly, so what does this mean for potential borrowers & homebuyers?
“When a bank assesses someone’s capacity to meet the required repayments on a home loan, they don’t use the actual interest rate & repayments the customer will be charged. Instead, they use a “buffer rate” to calculate the repayments they assess the affordability of the loan at, which the government regulators have set at a minimum of 3% above the actual rate that the borrower will be charged. The key reason for this buffer is to ensure that one or two interest rate rises don’t suddenly make everyone’s mortgages unaffordable overnight.” explains Mikael Liddy, Mortgage Broker at Fresh Home Loans.
While this most recent rate rise will have reduced buyers’ borrowing power slightly, the expectation from most economists is that we will see more rate rises over the coming 12-18 months. These market changes reflect it is worth consideration to secure your property this winter before those predicted subsequent rises reduce your borrowing power further.
Generally, colder seasons aren’t seen as the ideal time to buy property as one would expect less stock in the market, but with historic-low borrowing costs – it seems like you can move into your dream home this winter!