Experts warn: Buyers about to strike as Reserve Bank cut looms
Fresh APRA data shows Australians added another $6.3bn to their bank balances in May, pushing total household deposits to $1.62 trillion.
The figures come as buyers return to the housing market, encouraged by growing expectations of a July Reserve Bank rate cut and more favourable borrowing conditions.
But high-interest savings accounts are disappearing fast.
Just four banks are still offering ongoing rates of 5 per cent or more, according to Canstar.
Two providers, BCU and P & N Bank, cut their highest rates from 5.00 to 4.90 per cent last week, reducing the number of 5 per cent products on the market.
BOQ's Future Saver account has the highest ongoing rate at 5.10 per cent, but only for customers aged 14 to 35 who meet monthly deposit and spending conditions.
Other top accounts with 5.00 per cent offers include ING, Westpac and MOVE Bank.
Canstar insights director Sally Tindall said further rate cuts would likely bring the curtain down on high-yield savings options.
'Rates starting with a '5' are fast becoming an endangered species,' Ms Tindall said.
'If the RBA cuts next week, they could be extinct within days.'
At the same time, banks are growing their mortgage books.
CBA added almost $3bn in residential loans in May, the largest monthly increase among the major lenders.
Over the past year, the bank's mortgage portfolio has grown by $34bn.
NAB and ANZ also recorded solid growth in the month, up 0.5 and 0.6 per cent respectively.
M R Advocacy director and co-founder of Scale Lending Mortgage brokers Madeleine Roberts said more clients were re-entering the market, often with full deposits.
'A lot of our buyers are coming to us with 20 per cent deposits,' Ms Roberts said.
'That shows real discipline, especially considering how expensive life is right now.'
Ms Roberts said falling savings rates and the threat of rising prices had pushed many buyers to act.
'There's a real sense of urgency,' she said.
'Some buyers are desperate to get in before rates fall further.
'That's leading to more competition — and in some cases, overpaying.'
She said younger buyers in particular were more willing to look at long-term strategies, but warned that rapid purchases could limit future capital growth.
'If you're buying at auction and paying top dollar, you need to think about a 10-year plan,' Ms Roberts said.
'Otherwise, it could take years to make that money back.'
Buxton ACOM's Peter Serafino said enquiry levels at open homes had picked up since May.
'We're seeing more buyers and more interest, but not all of it is converting just yet,' Mr Serafino said.
'People who have been saving steadily are starting to feel like it's time to move.'
Mr Serafino said move-in ready homes priced between $1m and $2m were performing strongest.
'Anything turnkey under $2m is still seeing solid competition,' he said.
Mr Serafino added that falling rates would give many buyers more financial firepower.
'As borrowing power increases, so will prices, particularly if stock levels remain tight,' he said.
The Buxton ACOM agent said. sellers, meanwhile, were becoming more realistic.
'A lot of our sellers have already bought, so they're more motivated and open to negotiation,' Mr Serafino said.
'Last year was more about investors cashing out. This year feels different.'
With the Reserve Bank meeting due next Tuesday, analysts say the July decision could shape buyer sentiment into spring.
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