What to keep an eye out for in 2022’s property market.
The falling unemployment rate and arrival of immigrants with borders reopening, are key catalysts for the growth of Australia’s
economy. It’s nonetheless tipped that it will take until the fourth quarter of 2022 to see a rate rise to achieve the current level of growth in a sustainable manner.
The likely outcome for owner-occupiers and investors on the market would be to fix the low rates where the opportunity best presents itself; the most preferred fixed rate period remains from two to three years. The Australian Prudential Regulation Authority (APRA) also remains an additional consideration for 2022, with lending restrictions amended within the quarter that increased the minimum interest rate buffer to alleviate higher debt ratios.
Borrowers must be now able to service a loan if their interest rates rise by 3%, as opposed to the current 2.5%. As a result, new loan amounts could decrease by approximately 5% if such circumstances prevail.