IntuitiveFinance's  Instablog

Those looking for a home loan in Melbourne have received some encouraging news over the past month or so. Home loan rates have now dropped two times in a row and the outlook for those in the market for a mortgage is looking more positive.

Mortgage brokers around Melbourne have noted a distinct fall in the levels of interest in new stock over the past few years. The property market in Melbourne had been posting solid gains for decades. Those with their eyes set on the dream of owning their own home were encouraged to buy by the Australian Federal and State governments who provided separate first home buyers grants to those looking to take the leap of faith into the property market. While the Australian Federal government will continue to provide 1st home buyers with a $7,000 grant towards the purchase of new homes, the Victorian State Government will withdraw its additional contribution to first home buyers on 30th June 2012.

There is some uncertainty as to whether the number of new home loan applications will drop sharply in Melbourne as this additional incentive for first home buyers is withdrawn.
Those looking to purchase their first home in Melbourne are caught in an awkward position. On the one hand there is the very real possibility that the market will continue to fall over the next few years. Many feel that 'waiting it out' may be the best thing to do. "Buy when the market well and truly flattens out". The problem with this is that no one, not even the very best property market experts in the country, can have complete and absolute confidence in exactly when that time might be. Many take the view that right now is the ideal time to take the plunge and to wait any longer would be tempting fate if the market were to rise sharply in the current months.

Regardless of short term trends it must be said that in the long term the Melbourne property market has a very high probability of returning to solid growth. If there is one thing that history tells us it is that prices will continue their general trend upwards before too long. The underlying factor that goes a way towards ensuring that this is the case is the fact that there are far more people needing houses in Melbourne than there are houses to satisfy their requirements. If the rate at which Melbourne's population is increasing remains the same demand will far outweigh supply in the future.

No one can put their hand on their heart and tell you exactly what the Melbourne property market will do over the next few weeks, months or even years. All we can do is use history as a guide to help us identify trends that recur over time. Is it time to take the plunge and get that home loan? There are too many personal and environmental market factors at play to provide one definitive answer to that question. One thing that we can say with confidence is that whenever the market has dropped it has invariably returned bigger than better than ever.

Over to you. Do you feel that the property market in Melbourne is just about to turn?