The growth of house prices in Australia may be slowing down, but it is still going up—"exactly what it's supposed to do at this point in the cycle," says property expert John McGrath from Switzer Daily.
"This period of moderate growth will go on for a while at that's healthy. After boom conditions, you want to see some moderation in prices without major falls," he added.
According to the latest report from CoreLogic RP Data, Sydney house prices have risen by 4.5 per cent from the start of the year to April, with apartment prices also growing at 4.2 per cent. Melbourne house prices also went up to 3.7 per cent. Only two capital cities—Perth and Darwin—experienced a fall in house prices, but the decline is pretty small.
The rate cut of 0.25 per cent last week also presented more opportunities for both investors and owner-occupiers in the property scene. Though it does not necessarily mean that you can borrow more, it does translate to low-cost repayments and the possibility of extra repayments to help pay off your mortgage in a shorter period of time.
But McGrath also issues a word of warning regarding the very low 1.75 per cent cash rate. "Official rate cuts mean the Reserve Bank is concerned about the economy," he said. "The most important consideration is your employment. As long as you're employed, you can make repayments."
That being said, those working in volatile industries like mining should have a decent back-up in case of unemployment.
"If your job is secure and you're doing well, then this is an absolute 'golden era' for financing your next property purchase," McGrath said.
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