Experts are predicting the first interest rate cut since November 2020 to arrive this month, hopefully easing financial pain felt in households across Logan.
But a local mortgage broker is concerned a cut could lead to another boom in house prices, marking the end of the “Australian dream”.
Economists from three of Australia’s big banks have anticipated the RBA to slash the interest rate currently sitting at 4.35%.
Shailer Park-based broker Aaron Wilson agreed a reduction was likely, as the big four had dropped their fixed rates mortgages.
“That signals to me that when the fixed rates are coming down, the variables will also change soon after,” he said.
“There is speculation that if interest rates come down half a percent or even more, it could spark another surge in the market.
“I would hate for prices to continue to go up because it takes that Australian dream away from people.
“Especially for those on lower incomes and without a deposit.”
Mr Wilson said the growth of Logan’s property market over the last two years was “phenomenal”, particularly around the Marsden and Slacks Creek area.
“You used to be able to buy a free-standing home in Slacks Creek for about $300,000. Now you’re looking at $600,000-700,000,” he said.
“People who sat on the fence and said they were going to wait for rates to come down have probably put themselves under more pressure to get into the market because prices have gone up so dramatically.”
Mr Wilson listed what he said were key tips for locals to maximise their borrowing capacity and make their lives as homeowners easier.
The first is to be willing to make sacrifices.
“Sacrifice a little now to be able to get into the market,” he said.
“My wife and I both worked two jobs for two years to help with our deposit for our first home at Eagleby.
“I know how hard it can be – I worked pubs at night and my wife stacked shelves.
“Unemployment rates are low, so go pick up a couple of shifts, go and work on a Saturday, do what you can to put some additional money away for your future.
“Because god forbid prices continue to go up – things may just be out of your reach before you know it.”
Another way to prepare for the burden of a mortgage is to “commit to the lifestyle”.
“If your rent is $500 a week and the mortgage you sought is $600 a week, if you were to save that extra $100 a week you are now putting yourself into the mindset of someone with a mortgage,” Mr Wilson said.
“And you are showing the banks you have good credit worthiness.”
Mr Wilson acknowledged this works only for those who have enough disposable income.
Another key tip Mr Wilson stressed was eliminating or reducing credit card debt.
He said credit cards were evil.
“An $8000 credit card can reduce your borrowing capacity by $38,000 – that is a lot of money,” he said.
“If you can, reduce it or learn to live without a credit card.
“If you’re going to have a credit card, you need to pay it off monthly.”
