Could interest rates go lower still?

In a week that produced more good news for many Melbourne residents, from the ability to sit down at a café for a cup of coffee to the prospect of being able to attend sporting events again in the future, it’s been interesting to see a couple of pieces of good news for everyone with a home loan as well.

One interesting topic is the possibility of the Reserve Bank introducing ‘negative interest rates’ to stimulate the economy. Even respected economic commentators like Bill Evans, the chief economist at Westpac, has said that the RBA board should consider this move.

It sounds a bit bizarre, but there are actually several countries around the globe that currently have negative interest rates in place…Switzerland, Sweden, Denmark, Japan, and the European Union are among them. In fact, there are banks in Denmark that pay borrowers 0.5% interest to take out a home loan with them! Most market commentators say that this is unlikely to happen in Australia, but it does give you something to think about!

The topic that is of more interest to most homeowners is the possibility that we could see home loan rates dropping below 2% in the not-too-distant future.

A tour of several home loan websites this week showed that there are currently two-year fixed loans available at 2.09%, three-year loans at 2.14% and variable loans starting at 2.39%. However, several home loan brokers have been quoted recently as saying that they expect competition for business to push some smaller lenders to offer rates under 2% to lure customers away from the big banks.

Whether either of these options becomes a reality, it is clear that 2020 is a great time to negotiate hard on your home loan, whether you are purchasing a property or simply refinancing. Indeed, here’s an update on some of the recent sales activity our team has been able to achieve as buyer confidence grows:

Land Sales: Following hot on the heels of the sale of the unusual block adjoining McMahons Road that we mentioned last week, our team has also completed sales on a vacant homesite just down the street from Kingsley Park Primary School, and one of the few remaining vacant sites with sweeping views of Port Phillip Bay on Nepean Highway in Frankston.

Unit Sales: Among recent several strong results we saw the SOLD sign go up on a tastefully renovated three-bedroom villa located within walking distance of Karingal Primary School, John Paul College and Peninsula Golf Club.

House Sales: One of the recent off-market sales that has got so many locals talking involved a character-filled five-bedroom home (pictured) situated right around the corner from the Peninsula Aquatic Recreation Centre. This one achieved an outstanding mid-week sale comfortably above $800,000, a positive result for all the homeowners in that area.

With the combined strength of our Barry Plant network reaching over 5 million people every month, (as you may have read in Saturday’s Herald-Sun), there are definitely some outstanding opportunities out there for local homeowners who are ready to sell at the moment. If you’d like to discuss how to maximise your opportunities in the current market, you can call the team at Barry Plant Frankston on 9781 3100.

Cheers,

Barry Plant Real Estate

Frankston & Cranbourne