Interest Rate News

Thankfully, there was no pre-Christmas surprise this month from the Reserve Bank of Australia. The board decided to leave the cash rate on hold at 1.5 per cent. The central bank’s board will next meet in February 2018.

Property Market News

On the whole, national dwelling values were largely steady in November. Again, Melbourne seems to be proving more resilient than Sydney, with dwelling values up 0.52%. In contrast, Sydney’s housing market saw prices fall -0.72% in November. Canberra’s dwelling values rose by 0.86%, while Hobart experienced 0.64% growth. Things are looking up for property owners in Perth, where values rose by 0.21% in November. The city recorded the first rolling quarterly capital gain since late 2014 (up 0.3% in the three months to November). In Brisbane and Adelaide, there was less fluctuation (0.07% and 0.01% growth respectively). Darwin, like Sydney, experienced a fall in property values – the month-on-month change was -0.42%.

In the week ending December 3, there were 3,276 auctions held across the combined capital cities. According to CoreLogic, the preliminary clearance rate was 63.5% – up from the previous week’s clearance rate of 61.6%. Auction volumes remain in line with last year’s figures, but this time last year the clearance rate was much higher, at 72.3%.

Melbourne and Sydney’s clearance rates picked up compared to previous weeks. In Victoria, there were 1,800 scheduled auctions and a clearance rate of 67%. New South Wales held 1344 scheduled actions and cleared 62% of the stock. Meanwhile, the ACT had the highest clearance rate – 76% on 105 scheduled auctions. Tasmania only held 11 auctions and cleared 67% of stock, while South Australia had 148 scheduled auctions and 65% of properties sold. In Western Australia, 61 properties went to auction and 46% went under the hammer. Queensland held 395 auctions and the Northern Territory had 17. Both had clearance rates of 36%.

As the sun sets on 2017, we’d like to take the opportunity to wish you a safe and happy festive season. Remember, now is a great time to purchase a new property for the New Year, or to re-evaluate your mortgage. If you’d like advice about finding a mortgage that suits your financial circumstances and plans, we’d love to help! We’ll do the hard yards for you, so that you can concentrate on the fun stuff this summer, like playing beach cricket and being with the family. Here’s to an exciting 2018 – hopefully one that includes an exciting new property purchase! 

Objection 1: “I don’t have a big enough deposit”

If you’ve been working hard to save a deposit and feel like it’s never going to be big enough, we have some exciting news for you! Size doesn’t always matter, especially not in this scenario. Being approved for a home loan is not necessarily dependant on how much of a deposit you have, but rather your capacity to repay the mortgage. There are all sorts of options available to aspiring homeowners who don’t have a 20% deposit.

Some lenders still offer home loans for up to 95% of the purchase price. The borrowing criteria can be more stringent than other types of loans, but if you have a clear credit history, stable employment, a solid income, minimal debt and are in a good asset position, you may qualify. Most home loan providers will want to see evidence you’ve saved at least 5% of the purchase price, and you may have to pay Lenders’ Mortgage Insurance with this type of loan – but you’ll have your foot on the property ladder! Speak to us to find out whether this kind of loan could work for you.

Another way to get a foot on the property ladder could be to ask your parents or a family member to be your guarantor. This is when they use the equity in their property as security for your loan. The right time to buy your first home is as soon as you can afford to do so!

Objection 2: “I think the market will downturn”

Whilst the property market does go up and down in cycles, “timing the market” is not as important as “time IN the market”. The sooner you buy a property, the sooner it will be possible for it to start to experience capital growth (which is the term we use to describe how much your property goes up in value whilst you own it).

There is always a possibility that your property will go down in value after you purchase it. However, you need to remember it has only gone down in value ‘on paper’ – you won’t actually lose any money unless you sell it. Market fluctuations are common and it is likely it will have recovered in value by the time you want to sell.

Choosing the right home in the right location can help protect against property market fluctuations and improve your chances of long-term capital growth. When you locate a property you’re interested in buying, we can help you check its capital growth potential with a free property market report – so please ask us.

Objection 3: “I can’t afford a home where I would want to live”

Most people don’t get to buy their dream home the first time around – it’s a goal you can work towards once you get on the property ladder. If you can’t afford to buy your dream home in your preferred location, you could look for something in another location, consider a smaller property that’s more affordable, or opt for a fixer-upper that has potential but just needs a little love. Another option that’s becoming increasingly popular is to rent-vest – rent where you want to live and buy an investment property somewhere else. That way, you can grow your nest egg to enable you to eventually buy the home you want.

There’s no time like the present to chat with us about your plans and finance options. Please get in touch and we’ll explain your borrowing capacity, home loan options and help you get pre-approval on your loan so you can start looking for a property to buy sooner. 

Interest Rate News

This month, the Reserve Bank of Australia decided to keep the official cash rate on hold at 1.5%. Lenders continue to cut rates for owner-occupiers on principal and interest home loans, and at the same time, try to ensure the proportion of their loan books for investment purposes and interest-only loans meet APRA’s lending guidelines. Despite these restrictions, some lenders have cut interest rates for investors on principal and interest loans in recent weeks. Overall, interest rates remain low and there are competitive deals for both home owners and property investors.

Property Market News

Last month, dwelling values increased by 0.11% overall across the combined capital cities. Sydney’s growth was flat during August, while Hobart led the way for growth in dwelling values, at 0.61%. Hobart was also the strongest capital city performer for the past 12 months (13.61% growth). Canberra experienced 0.57% growth in August, while Melbourne remained resilient, with property values increasing 0.54%. Brisbane and the Gold Coast saw an increase of 0.18% for the month, and in Adelaide property values edged 0.03% higher. Perth’s dwelling values slipped -0.83%, while in Darwin they fell -2.17%.

Auction volumes remained high in Victoria and New South Wales, with 1987 combined scheduled auctions in the week ending September 3. Both had relatively strong clearance rates of 73% and 70% respectively. Across the other auction markets, clearance rates were varied. Tasmania had 10 scheduled auctions, with an impressive 100% clearance rate. The ACT had a 68% clearance rate for 69 scheduled auctions, while South Australia’s clearance rate was 62% for 80 scheduled auctions. In Western Australia, 28 properties went to auction, but only 58% sold, while in Queensland there were 292 scheduled auctions, with a clearance rate of 36%.

If you have property plans this spring, talk to us about a competitive home loan, investment loan, or renovation loan that works to your advantage. We’ll compare the market and line you up with a mortgage that ties in with your personal financial circumstances and goals. Please get in touch today – we’d love to help!