Brokers Optimistic About 2020
A survey of mortgage brokers has revealed a high level of optimism for residential real estate markets in 2020.
The HashChing 2020 broker survey has found that most mortgage brokers expect the recovery in major markets to continue, interest rates to fall further and investors to return to the market in large numbers.
HashChing CEO Arun Maharaj says brokers are “justifiably optimistic”.
“Brokers are reporting an increase in first-home-buyer activity, probably as a result of the cooling that happened in 2019 combined with lower interest rates,” he says. “With those rates predicted to stay low, it’s easy to see why brokers are looking forward to a strong 2020.”
There was an “almost unanimous” view that the recent increases in house prices in capital city market, notably in Sydney and Melbourne, will continue through 2020.
There are also expectations that first-home-buyer activity will increase and investors will become more active in 2020 than last year.
“It’s clear that investors took a step back in 2019,” says Maharaj. “With such optimism around prices and the government stepping in and loosening credit restrictions, it’s hard to argue with brokers that first home buyers will once again find themselves competing with investors.”
The Federal Government’s FHB mortgage guarantee scheme started on 1 January 2020 and mortgage brokers expect it be over-subscribed.
“While 10,000 places is small in the context of the entire Australian market, it will help keep the FHB group competitive, especially outside of the Melbourne and Sydney markets,” he says.
Most brokers also predicted another RBA reduction in the cash rate, although expectation is split between the rate coming to rest at 0.5% and 0.25% rate by the end of 2020.