Westpac Chief Economic Predicts Rates To Fall To 0.5%
Your mortgage payments could shrink even more over the next 12 months.
Despite the Reserve Bank of Australia (RBA) slashing interest rates to a record-low of 1% in July, Westpac’s chief economist, Bill Evans, is predicting rates to drop to an even lower 0.5% by early next year.
According to Evans, the RBA has little choice – struggling to meet its own targets around the unemployment rate and wages growth.
A drop of 0.5% could save many homeowners over $100 a month on mortgage payments.
More Than 300,000 ‘Mortgage Prisoners’ Caught In $4 Billion Trap
According to the Australian Financial Review, more than 300,000 people are trapped in higher-rate mortgages.
As a result, they could be overpaying by more than $4.2 billion on their home loans.
Push To Abolish Stamp Duty
Stamp duty costs buyers tens of thousands of dollars, but puts billions of dollars in the government’s pockets.
The Real Estate Institute of Western Australia (REIWA) has recently called for the WA government to abolish stamp duty, claiming it to be one of the biggest barriers to home ownership.
REIWA president, Damian Collins, said, “Despite WA currently being the most affordable state in the nation, many still find themselves priced out of the market or unable to move homes due to the heavy tax burden. It is imperative that the single greatest barrier to housing affordability is removed”.
Be careful when buying off the plan…
Many who bought off-the-plan in the past few years are now being hit hard by the property downturn.
A recent report released by CoreLogic showed 62% of off-the-plan apartments in Sydney settling with a valuation lower than the contract price.
This is leaving many struggling to get finance to complete their purchase, with banks refusing to lend the full amount required by buyers.