Dee Why / Collaroy Blog

The RBA has as expected left the official cash rate on hold this week, but lenders have been making significant cuts to interest-only rates across the market, which is excellent news for buyers and vendors on Sydney’s Northern Beaches.

Australia’s biggest bank, CBA cut their 2-year fixed interest only investor rate from 4.84 percent to just 4.34 percent on Friday – a significant drop of 50 basis points. The bank also shaved owner-occupied Principal & Interest (P&I) 1 and 2-year fixed rate mortgages by 0.10% p.a.

Westpac also joined the interest rate cutting crusade, reducing some loans by 14 basis points, while a selection of smaller lenders also cut some interest-only rates over the last month, according to financial comparison website, RateCity.com.au.

With some lenders appearing to be more willing to provide better deals on interest-only loans, it’s fair to assume more buyers will consequently be in a more robust position to enter the market. For vendors, buyers armed with more finance is good news, especially if you’re seeking a sale before winter.

At the same time, while Sydney property prices continue to take a breather, improved lending conditions could prove just the tonic to get market values moving north again. Longer-term our city’s strong market fundamentals remain in place.

We have a population of 5 million, which is growing by about 100,000 every year. These people need somewhere to live, and this will continue to drive demand for quality, well-located property on the Northern Beaches.

At the same time, government red tape continues to stymie enough residential developments to keep pace with population growth and property demand. It’s economics 101, but if real estate demand outstrips supply, we’ll continue to see longer-term price growth. 

So, if you’re considering capitalising on the strong growth enjoyed by the Northern Beaches property markets over the last six years, and with the banks freeing the reins on interest-only loans, now could be a good time to test the market value of your home.

If you’re considering selling a property on the Northern Beaches, contact Raine & Horne Dee Why/ Collaroy on (02) 9971 9000 to discuss your options or to seek an appraisal.