Friends, clients, and prospects often ask if we’re nearing or at the top of this cycle in the residential property market. My replies have been consistently the same – probably not. Bank economists over the last 12-18 months have stated that the Sydney market is grossly under-supplied and will likely remain so well into 2017. So, prices continue to rise, aided in part by the six-year plus downward trend in interest rates.
An article in the weekend Fin Rev provides further evidence, the most interesting part being the graphs based on data from Stockland. If they’re anything close to accurate, those who want to buy but think that prices will fall in the next year or two, may experience an expensive regret.
A few years back, my wife ordered a new car, and we were presented with the usual post-sale options of rust protection, window tinting, and finance. To my surprise, they were offering a really low interest rate that they said was subsidized by the manufacturer, which may or may not have been true. So, she filled in the forms, and we left feeling pretty good about it all.
Because she wanted a special configuration, we had to wait for the factory to build it. Then the delays started and went on for months. By the time it arrived, the special finance offer had expired. But since she had already lodged an application, we decided to see what the dealership’s ‘Finance Specialist’ could deliver. I disclosed in advance my role as a broker with access to the best interest rates in the market.
Their Specialist came back with documents that included the 36-month term and zero residual that we requested, but the repayments seemed high, so I worked it back and found that he had the audacity to expect us to accept a rate of over 14%, which at the time was about double the going rates! After suggesting that dealership’s owner should know about this outrage, he changed his tune and provided repayments based on a competitive rate.
Bottom Line: You cannot trust a car dealership’s finance specialist, because he’s not working for you. Get your finance pre-approved with the help of a good broker, then go shopping.
Fixed rates are the norm for Medical Equipment Finance, and they’re now a much larger percentage of the loans for residential mortgages at over 33%, according to Mortgage Choice. It appears that I’m not alone in the opinion that we’ve seen the bottom in this rate ‘cycle’. While variable rates remain more popular, it’s surprising that over 23% of borrowers have undiscounted rates. They all need the services of a good finance broker.