As we settle into March, there is plenty of movement in the finance world. Whether you are looking to secure your next investment property or finally get the keys to your first home, staying on top of the “money side” of real estate is key.
Here is a quick look at the three big things you need to know right now:
Following a period of relief last year, the Reserve Bank (RBA) raised the cash rate to 3.85% in February. While everyone hopes for a steady path, inflation has been a bit “sticky,” and the RBA board meets again on March 17. For buyers, this means being mindful of your borrowing capacity, and for landlords, it’s a great time to review your current portfolio’s health. The uncertainty around the extent and severity of the US/Iran conflict and the impact on markets is changing rapidly, although in the short term, all four major banks are forecasting another 0.25% rate increase next week and potentially more to come.
As of February 1, new APRA rules have come into play regarding Debt-to-Income (DTI) ratios. In short, big banks are now more restricted on how much “high-debt” lending they can do.
For Investors: If you have a large portfolio, you might find the big banks a little more selective.
The Good News: Non-bank lenders aren’t under these same restrictions, so there are still plenty of options to keep your investment goals moving.
Despite the rate tweak, demand remains incredibly strong. Brisbane and Perth are seeing double-digit growth, while Sydney and Melbourne continue to show steady resilience. We’re also seeing a huge surge in buyers using the expanded 5% Deposit Scheme, which has really opened doors for those who were previously priced out.
The bottom line? The market is shifting, but it isn’t slowing down. If you’re wondering how these new rules affect your specific situation, wanting to get a pre approval in before higher rates chew into your borrowing power, or considering fixing a portion of your mortgage to protect against further hikes, reach out and let’s crunch the numbers together!
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