Over the next year, mortgage brokers expect the Sydney and Melbourne housing boom to continue, interest rates to be cut further, and investors to come back into the market, according to the HashChing 2020 broker survey.
HashChing CEO Arun Maharaj feels the brokers surveyed are “justifiably optimistic.”
“Brokers are reporting an increase in first home buyer activity, probably as a result of the cooling that happened in 2019 combined with lower interest rates. With those rates predicted to stay low, it’s easy to see why brokers are looking forward to a strong 2020,” he said.
The “almost unanimous” view the continued increase in house prices for Sydney and Melbourne will continue through 2020 was accompanied by expectations first home buyer activity will increase and investors will reappear on the scene in the new year.
“It’s clear that investors took a step back in 2019. With such optimism around prices and the government stepping in and loosening credit restrictions, it’s hard to argue with brokers that first home buyers will once again find themselves competing with investors, especially in the Sydney and Melbourne markets,” said Maharaj.
“The government’s first home buyer mortgage guarantee scheme comes into effect in Jan 2020. We expect this will be oversubscribed, and whilst 10,000 places is small in the context of the entire Australian market, it will help keep the FHB group competitive, especially outside of the Melbourne and Sydney markets.
“Inside of Sydney and Melbourne, first home buyers will struggle to utilise the scheme. The $700,000 NSW and $600,000 VIC price caps will soon be surpassed by virtually all properties within commuting distance of the respective CBDs if price rises continue in 2020.”
Most brokers also predicted another RBA cash rate, although expectation is split between the rate coming to rest at 0.5 and 0.25 rate by the end of 2020; very few brokers predict interest rates will go negative.
