Despite all the doom and gloom surrounding the Federal Government’s property tax changes, we believe that if you have a secure job, a steady income, and your spending is under control, now could be the right time to make what finance experts call a ‘counter-cyclical play’ and buy a suitable property. 

In simple terms, a counter-cyclical play means buying when others are sitting on the sidelines. Interest rates have risen, the so-called expert commentary on property in the media is on the negative side, and buyer competition has softened a bit. For well-prepared buyers armed with a home loan pre-approval from Our Broker and a long-term outlook, those conditions may create opportunities to negotiate better prices and secure quality property before confidence returns to the market. 

Whether you’re a first-home buyer with decent savings or an experienced investor considering a block of flats, periods of uncertainty and political change can create opportunities for buyers prepared to take a long-term view. 

Don’t forget that Australia’s housing market continues to be underpinned by powerful long-term fundamentals, including strong population growth and a chronic undersupply of new homes. History suggests that some experienced investors choose to make their move when confidence is low, and others are sitting on the sidelines. 

The team from Our Broker tells us that real estate transactions are continuing to take place because plenty of vendors are meeting the market, and as current market conditions evolve, loan activity may start to strengthen. 

Softer markets can also favour upgraders. For example, if you sell a $1 million home and buy a $1.5 million property, and both properties decline in value by 5%, you’ll receive $50,000 less for your home, but the property you’re buying will be $75,000 cheaper. In this scenario, you would be $25,000 better off than if you had upgraded before prices softened. 

Similarly, if you're planning to buy a $800,000 first-home with a 10% deposit ($80,000) and the market falls by 5%, that same property would cost $760,000, a saving of $40,000. Your $80,000 deposit will now represent more than 10.5% of the purchase price ($760,000/$80,000 X100), and you would only need to borrow $680,000 ($760,000 - $80,000) instead of $720,000 ($800,000 - $80,000). That's a $40,000 smaller home loan, which also means lower repayments and less interest paid over the life of the loan. 

Some of the major banks are now forecasting that the next move in official interest rates could even be downi. Historically, lower interest rates have tended to improve buyer confidence and support property prices, although future market performance is never guaranteed. 

For first-home buyers, that could also mean facing increased loan competition from investors seeking entry-level properties that typically offer relatively stronger rental yields, particularly if borrowing costs begin to ease. 

Moreover, with less home loan applications to process, the lenders are generally less busy now in processing and assessing mortgage applications than earlier in the year. With the assistance of a finance specialist from Our Broker, this can mean faster home loan turnaround times and a smoother approval process for well-qualified borrowers, which will get them into the next property faster. 

If you're considering buying a property, speak with Our Broker about your borrowing capacity, how to get a home loan pre-approval and whether you may be eligible for first-home buyer assistance based on your personal circumstances. 

For a home loan preapproval or to discuss whether you are eligible for first home buyer support, contact Our Broker today on 1800 913 677.