Those looking to build custom luxury homes in Perth could suddenly find their dream home is more affordable than they previously thought. The announcement by the Reserve Bank of Australia (RBA) last week to cut the cash rate by 25 basis points to a record low 2.25 per cent will mean much more affordable home loans for those considering a new build this year.
What does this mean for the average home owner with a mortgage in Australia? According to Real Estate Institute of Australia (REIA) President, Neville Sanders, the affordability of housing costs is improving.
“Since the RBA began its cutting of the official interest rate in late 2011, the proportion of the median family income required to meet monthly loan repayments decreased 4.4 percentage points from 34.8 per cent to 30.4 per cent,” commented Mr Sanders in a February 3 statement.
While some worried that the cut in the cash rate may not be passed on to consumers, rate comparison website finder.com.au revealed that at least 30 lenders have announced an interest rate reduction on home lending for new or existing customers.
With many of these reductions coming into force towards the end of February, now is an ideal time to start talking to a builder in Western Australia about your custom home design.
The Housing Industry Association (HIA) points out that this change in monetary policy is not only beneficial for consumers, but could predicate a housing boom that will serve to bolster the economy at a time of less than stellar performance.
“A further ‘touch down’ to interest rates will help maintain very healthy levels of new home building while hopefully broadening the base of Australia’s economic growth. The Reserve Bank has also indicated that the Australian dollar needs to fall further and it sees another interest rate cut as helping to achieve that outcome,” said Harley Dale, chief economist for the HIA, in a February 3 release.
With housing becoming more affordable, it is essentially possible for homeowners to get more house for their dollar – an exciting opportunity for those looking at custom homes in Perth.