‘Buying frenzy’ expected amid cheapest mortgages in history

first_imgQueenslander Colleen Hehir with her sons Reilly Norman, 9, and Arden Norman, 6, at their investment property 23 Black Street, Mt Morgan, which is on the market for $129,000. Picture: Steve Vit.Housing demand will hit red hot levels as the cheapest mortgages in Australian history hit the market – but experts warn the frenzy will be tough as buyers fight for a smaller pool of property. Real estate agent Matt Lancashire of Ray White New Farm said Brisbane was seeing record sales in the first two months of the year, and cheaper mortgages would trigger “a buying frenzy”.“Our January we forecast $20m, we got over $40m (in sales), in February we forecasted $30m for the shortest month of the year and we did just shy of $50m, there’s a number of factors and cheap money is the biggest.”He said it was now “more affordable to buy rather than rent”. “We’ve got a supply and demand issue so that coupled with the low interest rates is going to create a bit of a buying frenzy. Our March we are day three and have already hit $10m (in sales). The good thing about Brisbane is we’re affordable so it may encourage more investors up here. They say our purchase prices are Sydney and Melbourne’s deposit cheques so we will see. Bring it on.” Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 2:03Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -2:03 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD540p540p360p360p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenVeronica Morgan on how to be the highest bidder 02:04 Experts believe the Reserve Bank’s historic official rate cut to 0.5 per cent would trigger a return in investors back to housing, with RateCity trackers already showing mortgage rates dropped to as low as 2.44 per cent immediately after the RBA announcement. Australia’s Big Four banks – ANZ, CBA, Westpac and NBA – have all passed on the rate cut in full, triggering falls across the entire loan spectrum.Brisbane economist Pete Wargent, co-founder of AllenWargent Property Buyers, said “very, very cheap money” will lift investor activity – but it comes amid a tight listings market. 23 Black St, Mount Morgan, is on the market for $129,000, with owners hopeful that the lowest mortgage rates in Australia’s history will seal a deal for them.Queensland investor Colleen Hehir was yesterday among sellers hoping the tight market would drive up sales.“I would be (very hopeful),” she said. “I bought for a lot more than I’m selling. I got it in 2007 at the height of the market. I have been trying to sell on and off for the last five years,” she said of her investment property at 23 Black St, Mount Morgan. She has now slashed the price of the property to $129,000 to land a sale. RELATED: Coronavirus sees RBA drop rates to record lowcenter_img Brisbane home prices keep rising RBA Governor Philip Lowe said there were “signs of a pick-up in established housing markets, with prices rising in most markets, in some cases quite strongly”. Picture: AAP Image/Joel Carrett.“Historically rate cuts have always been followed by more investors coming into property, I guess it will be the same,” he said. “ … Generally mortgage rates for new customers are very, very low. It’s very, very cheap money.” SQM Research figures out Tuesday showed the property hunt was already tough for buyers, with new listings for sale in Brisbane dropping significantly in February (-10.3 per cent) compared to the same time last year, as did Melbourne (-11.9 per cent) and Sydney (-26 per cent).SQM Research managing director Louise Christopher said traditionally February should see a rise in properties listed for sale, “however, we are down for the year in all cities as absorption rates have picked up”.“There are many more buyers now compared to last year and so surplus stock is being sold and taken off the market.” Colleen Hehir with her sons Reilly and Arden have their fingers crossed that the current market will finally seal a sale for them. Picture Steve VitMore from newsParks and wildlife the new lust-haves post coronavirus10 hours agoNoosa’s best beachfront penthouse is about to hit the market10 hours agoRateCity research director Sally Tindall said with Westpac and CBA immediately committing to pass on the rate cut in full to customers “we’ve now got two of Australia’s biggest banks offering variable rates under 3 per cent”. ANZ also shocked the market, dropping it rate for investors (-0.35 percentage points) more than it did for owner occupiers (-0.25 pp).RBA Governor Philip Lowe said there were “signs of a pick-up in established housing markets, with prices rising in most markets, in some cases quite strongly”.Mr Lowe acknowledged that “mortgage rates are at record lows and there is strong competition for borrowers of high credit quality”.The market swing towards a rate cut was sharp, in just four days going from an 82 per cent expectation of a hold at 0.75 per cent on Friday to 100 per cent prediction of a cut to 0.5 per cent by Monday. The RBA board has warned that it is prepared to cut rates further to support the economy.Mr Wargent, who co-authored Low Rates, High Returns, said if the market was pricing something 100 per cent, it was very difficult for the RBA to not move. “The main thing that’s changed is the global economy there’s just been a massive demand shock related to coronavirus,” he said. “It’s not the virus itself, it’s more the second order impact, particularly factory activity in China has just dropped off a cliff.” “If that’s replicated around other countries like Korea and other parts of Europe then it’s a real jolt to global demand and growth, so markets moved very, very quickly.” He said the US was also widely expected to start dropping rates again.Announcing Tuesday’s rate cut, Mr Lowe confirmed “the Board is prepared to ease monetary policy further to support the Australian economy”. FOLLOW SOPHIE FOSTER ON TWITTERlast_img

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