In this week’s two minute property investment news video I talk about interest rates and affordable suburbs around Australia.
Borrowers are turning their back on fixed-rate loans. Australian Bureau of Statistics data indicates that the competitive banking environment is resulting in most borrowers wanting to stay on variable home loans.
The proportion of borrowers who fixed their home loan in June this year was at its lowest level in 17 months. Just 14.26% of all loans in the month were fixed, which is 11% lower than in May this year.
Fixed home loans aren’t as competitive as variable rate home loan deals according to some of the comparison sites.
The difference between the lowest variable rate and lowest fixed rate is around 0.5%, which is significant if you are borrowing hundreds of thousands of dollars over a long period.
Leading economists expect interest rates to start rising next year, if not sooner, and this could mean we won’t see fixed rates fall much further.
If you have been looking for the inner city bargain suburbs well here is some good news. RP Data has been looking at the cheapest suburbs for houses and units within 10 kilometres of major city centres.
Of course, “affordable” is a relative term with Sydney’s least expensive suburb being Wolli Creek with a median house price of just over $710,000, which isn’t exactly pocket money.
For other cities, however, there were some very attractive options. Rocklea in Brisbane has a median house price of just $330,000, while the Perth suburb of Glendalough has a median of $438,995.
RP Data research analyst Cameron Kusher says these suburbs provide great opportunities as buyers continue to move further away from city CBD’s and the less affordable real estate there.
As the ripple effect continues, these reasonably priced and reasonably accessible areas a little further out could well continue to firm in value.