Australians have unlocked new-found equity in their homes and are transforming them into dream properties, says a Central Coast finance broker.
Universal Mortgage Experts (UME) director Nathan Aird (pictured) said property values had increased across the country with lifestyle areas such as NSW’s Central Coast recording rapid growth.
“We are busier now more than ever before with people refinancing and tapping into their equity to renovate or value add to their home,” Aird said.
“People are more inclined to go into more debt and spend money on their own home as they were unable to travel, turning their own home into a holiday destination.”
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With equity growing and people capitalising on disposable income, Aird said it was a win for the local economy as residents hired tradies to carry out home renovation projects across the last two years.
Aird said the Central Coast median house price had increased by $200,000 during the past 18 months.
“Like everywhere, inflated property values make it more difficult for those trying to enter the market. It is great for those who are already in, but not for those who aren’t,” he said.
Aird said local first home buyers are finding it even harder to buy into the property market.
“They need more support,” he said.
“More and more families are going guarantors for their first home buyers who are dipping into the equity built up in their own homes.”
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Aird said the Central Coast had always been a more affordable area, however as people moved away from capital cities such as Sydney, it had driven demand and prices up.
“This means for local income earners they are getting driven out and cannot keep up with property prices rising,” he said.
Aird said people who had purchased property 12 months ago could already refinance and shop around for a more competitive interest rate from another lender.
“Under BID we can’t stop them,” he said.
“With banks offering rebates and extremely low interest rates, low-risk applicants can dictate their own terms which is a win for consumers.”
Aird said last week’s Reserve Bank interest rate hike announcement was mainly caused by rising inflation.
“My customers who have purchased a property in the last 11 years have not experienced a rate rise,” he said.
“I think it will see a softening in demand of people not overpaying for houses and inflation will drop over time. I am telling my clients it will be OK, we have done this before, and we will do it again.”
He said there will eventually be a correction in property prices instead of who pays the most wins.