As we welcome the year 2023, a rocky ride lies ahead with many macro-economic factors indicating an eventful year ahead. One area to keep a close eye on is the real-estate market, not only in Australia, but around the world. As inflation continues to be stubbornly high, the reprieve for borrowers still seem afar.
With Australia’s CPI going exponential, the RBA has little choice but to continue its hawkish stance. This spells a grim outlook for property markets and borrowers as mortgages are now unaffordable for most.
To further aggravate the already unstable market, many borrowers have thus far not felt the pain as previous fixed rates have yet to expire. Unfortunately according to statistics, the bulk of the fixed rate expiries are due this year. Many over-leveraged borrowers with little to no buffer in the tank will struggle to make ends meet as they are sandwiched between rising living costs and rising floating mortgage rates.
The “mortgage cliff” is a well known term throughout 2022 as economists and analysts warn about its imminency. But this isn’t the first time we are seeing a sizeable mortgage cliff. The GFC in 2008 still sounds all too familiar; the global event that was universally dubbed “The Great Recession” as foreclosures peaked close to the million mark. Although domestically in Australia the trajectory is unlikely to follow the exact path, there are eery similarities between the 2.
In the current economic conditions where property prices are in a correction whilst construction and renovation costs are still on the rise due to supply chain woes and shortage of labour, investors and home owners may soon be forced to make a difficult decision as they are driven to the hall and can no longer make ends meet.
During these challenging times, Simply Frameless is still working hard to provide for its customer. Striving for quality whilst keeping our price rises to a minimal, we are also managing the straining supply chain behind the scenes to ensure reasonable delivery within expectations. Get in touch with us today to see how we are able to help with your urgent renovation projects.