This article was originally published here and although a couple of years old, most information is still valid.

Northern Perth’s Joondalup region is adjusting to the moderating market of the city.

The northern beaches Joondalup region includes Burns Beach, Edgewater, Joondalup, Connolly, Heathridge, Kinross, Currambine, Iluka and Ocean Reef. The suburb of Joondalup itself acts as a hub to Perth’s outer northern suburbs.

The push to establish Joondalup as an urban centre extends back to 1970, with the Corridor Plan for Perth. A number of retail and transport infrastructure initiatives have been implemented around the area in the past 40 years to facilitate urban development and direct activity to Joondalup. Joondalup was highlighted in the West Australian state government’s Directions 2031 strategy as one of two primary centres in the Perth metropolitan area, along with Rockingham.

The area’s CBD has a strong retail focus and has seen considerable residential development in recent years, with a relatively high density of townhouses and apartments. With the presence of Edith Cowan University, a healthy retail and entertainment district, established parks and in close proximity to the beach and Lake Joondalup, the area has attracted demand from the middle class lifestyle market.

The greater region of Joondalup had a median house price of $588,750 in March, while units in the area sold for a median price of $415,000. A two bedroom Joondalup apartment in the block pictured below sold for $408,000 in February.

According to Australian Property Monitors senior economist Andrew Wilson, Joondalup’s appeal to middle income earners has lent the area some resilience against the changes seen in Perth’s market.

“Joondalup is in the middle price range area,” said Wilson.

“There’s a bit of a lifestyle market there. With all the new developments that have been established in that area, we’re seeing middle price bracket, executive type buyers.

“Because of that nature of the market, it tends to be quite resilient. The big picture is that Perth is moderating. The latest data shows that Perth’s market has plateaued.

“We’re seeing quite a significant upward shift in unemployment in Perth, which has moderated lately.”

According to data from the Real Estate Institute of Western Australia, listings in Joondalup and the neighbouring Wanneroo jumped earlier this year, up 28% in the March quarter from December.

Despite Joondalup’s relative strength, its property market must still deal with exposure to Perth’s labour market, said Wilson.

“The Perth labour market has seen some difficulties with absorbing eastern state migration, which saw rents get pushed up quite sharply in some suburbs of Perth. Perth prices rose 10% last year, and with rising unemployment, we’re starting to see some affordability issues.

“And the lifestyle market can certainly be affected by job security and affordability issues. But as the economy does pick up and absorb that unemployment, incomes will grow.”

The slowing mining sector in Western Australia has seen a shift in focus for the region, with the city of Joondalup launching new initiatives to market the region as Perth’s “knowledge capital”. How well the region responds to the state’s shifting economy remains to be seen, but strong infrastructure investment in the area in the past and extending into the future ensures that it will remain a significant urban centre for Perth’s northern corridor.

Photo courtesy of Wikipedia/Creative Commons.

If you are considering buying an investment property in the Joondalup area, research should be very important to you. We have a lot of home loan and property tools available for our clients looking for their next property purchase. Some of these tools are not available to the general public. Just one small way mortgage brokers beat bank branches for investors 100% of the time.

There is still also some great data readily available to everyone via REIWA and the property websites, like the link below. Keep in touch with Element Finance Joondalup via our Facebook page where we will release some of our private tools soon.

http://www.realestate.com.au/invest/house-in-joondalup,+wa+6027

Saving up your deposit is the first step in buying a home and when your bank account balance starts to look good it’s easy to get excited. But it pays to be realistic. Exactly how much money is enough? In this article we take a look at some of the upfront costs involved with buying a home to help you set a proper savings goal before you make your move.

The deposit you contribute towards your mortgage is only part of the funds you need to purchase a property. Many first-time buyers assume that 10% of the purchase price will be enough to cover everything, but unfortunately that isn’t necessarily the case. There are many costs involved in purchasing a property, let’s take a look at other things you need to think about as part of your purchase.

1. Deposit on your mortgage

It used to be possible to borrow nearly 100% of the purchase price of the property, and use your savings to cover the other expenses, but these days that’s usually no longer the case. Most lenders require you to have at least 5% of the purchase price to put towards your mortgage. Depending on the home you want to purchase, the lender may even require you to put 10 – 20% of the purchase price towards your mortgage. Have a chat to us about different lender’s criteria to ensure you know what you can afford.

2. Stamp duty

Stamp duty is a cost that varies from state to state and it is calculated against the price of the property you wish to buy. We can help you calculate approximately what your stamp duty costs will be on the price range of home you’re looking at, so talk to us when you’re planning your budget.

3. Lenders mortgage insurance

Unless you have a deposit of 20% or more to contribute towards your mortgage, the lender who is providing your loan will require you to pay lender’s mortgage insurance (LMI). Unfortunately, the cost of this will also vary. LMI is calculated according to how much deposit you have, how much you intend to borrow and how much the home costs to purchase.

4. Borrowing costs

There are a range of different fees that apply to getting a mortgage. These differ from lender to lender and loan to loan, but generally speaking, you will need to allow for things such as application fees, lender valuation fees and a settlement fee. Some lenders also charge for legal supervision at settlement and document processing. Again, ask us what these costs could be with your chosen lender, and we’ll help you to fit them into your budget.

5. Pest and building inspections

Getting a building and pest inspection usually costs around $400, but this will vary depending on the size of the property. It really is worth the expense because it could cost you a lot of money to fix any problems the property may have after you purchase it. By getting a building and pest inspection before you buy, you’ll know exactly what you’re up against and have the opportunity to choose a different property if it looks like you can’t afford the repairs.

6. Conveyancing

You will need to employ a solicitor or conveyancer to legally transfer ownership of the property you are buying. They will also perform all the property and title searches necessary and take care of the documentation. Conveyancers can also explain sales contracts, take a look at your section 32, auction terms and any other legal elements of purchasing a property so that you fully understand what you’re getting into.

7. Insurance

Your lender may require you to take out building insurance on any property you wish to purchase. This is not only an upfront cost, it is ongoing and you’ll need to maintain this cost annually. You have the freedom to shop around amongst the various insurance carriers to get yourself a good price. Once you move in, it is also a good idea to get contents insurance as well. Usually the two can be bundled together so you can save on purchasing them individually.

8. Moving-in costs

Many people get so excited about getting their first home they forget to calculate their moving in costs and include them in their budget. Remember that you may need to hire the services of a removalist to move in your stuff, and that can be expensive! There’s also likely to be items of furniture you’ll need to buy and most people want curtains and blinds at the windows.

You’ll also need to pay to have your utilities connected. These may include telephone, internet, gas and electricity.

9. Contingency funds

Last but not least, it’s important that you have some funds put aside for any unexpected expenses. Of course, it’s difficult for us to predict what these may be, but you never know when you might encounter a problem. Perhaps you’ll have a blocked drain that requires a plumber, or light sockets that don’t work and require an electrician. It’s all part of the fun of owning a home!

Although this may sound daunting, remember, we’re here to help you budget to purchase your property and help to make sure there are no hidden surprises. If you’re getting ready to purchase a home, please don’t hesitate to give us a call for a chat. We’ll help you determine whether you’ve saved enough money to cover your deposit and all your expenses. We can also help you get pre-approval for your home loan so you can get started on searching for your dream home! Please call us today.

Christmas is in the AIR and so that means our BIGGEST giveaway ever is happening. We have a brand new iPad Air 2 64GB with wifi and cellular valued at $1,000 PLUS a $100 iTunes voucher here in the office ready to wrap for you. For your chance to get your name on the Christmas label, enter our competition with these 2 easy steps:

1. LIKE the Element Finance Facebook page right here
2. Visit the Element Finance page and comment on iPad image with the name of your favourite (or least favourite!) Christmas carol.

But hurry, competition closes on 18 December. Winner announced 19 December. For full T&Cs, please email mike@elementfinance.com.au

Home loans are changing with the times. You can now get home loans in a variety of different forms, all with different facilities and features. Deciding which home loan suits your needs can be quite daunting and that’s where sound advice from your professional credit adviser can be invaluable. We’re here to help you sort through all the different home loan options and help you choose the one that’s right for you. But where do you start? What features do you need to consider?

Choosing the right home loan

Before you start shopping for a home loan, why not sit down and discuss your personal circumstances, financial situation and goals with us? Once we identify what’s important to you, it will be easier to decide what features and facilities you might need from your home loan

While the first question some clients ask us is ‘what is the best interest rate I can get?’, choosing your home loan isn’t just a matter of picking the one that has the lowest interest rate. The home loan with the lowest interest rate isn’t always the least expensive option when you take into consideration fees, charges and some of the advantages you might get from a loan with features that better suit your needs. These may include:

  • The ability to make additional repayments
  • Interest only options
  • Lump sum repayments
  • Offset account
  • Transaction account/credit card facilities
  • Redraw option
  • Split loan option.

Two common facilities that could help you save money on your home loan include transaction or savings offset accounts and redraw facilities. We get quite a few questions about these features, so let’s have a look at these in a bit more detail below.

Transaction or savings offset accounts

One of the newer and increasingly popular financial products on the home loan market is a transaction or savings offset account and most lenders have one on offer. Whilst they may not come with the lowest interest rate on the market compared to your basic home loan product, they may help you to save money on how much interest you have to pay and may also help you to save on bank fees you would usually pay for your transaction account and credit card.

A transaction or savings offset account can be used like an everyday bank account, but it is linked to your home loan so that the money you have in it reduces the amount of interest you have to pay on your home loan. In other words, the money in your offset account counts against the amount you owe on your home loan – so the more money you have in there, the less interest you have to pay on your home loan!

You use the account like you would your ordinary transaction account – your salary is paid into the account and your spending comes out of it. With good budgeting, you can really make it work to reduce your interest obligation and help you pay off your home loan sooner. This kind of account can also help you save money on overall banking fees as they usually offer fee free use of ATMs, credit cards and more.

Redraw facilities

A home loan with redraw facilities is a popular choice for many home buyers. It allows you to make extra repayments and gives you the option of withdrawing those extra repayments at a later date if you need the funds.

Usually redraw facilities are only available with variable interest rate loans, as other types of home loans like fixed interest rate home loans or basic home loans do not give you the option of making extra repayments.

Every extra repayment you make to your home loan goes toward reducing your term and therefore the amount of interest you will need to repay over the entire life of the loan. If you make extra repayments diligently every month or even every fortnight, you could save years on your mortgage term and thousands of dollars in interest over time. Even an extra $50 a fortnight could have a dramatic affect!

However, redraw facilities give you a safety net in the event that you should ever need to access the funds quickly. A home loan with redraw facilities can give you almost instant access to your money when you need it – say your fridge goes on the blink or your car needs some major repairs, you’ll know you can get at your money right away.

What type of home loan is right for me?

There’s a home loan type available for just about any property purchase. If you want a home loan with a low interest rate and no redraw or offset facilities, credit card or transaction account then a basic variable rate home loan may be the right choice for you.

However, if you need to make sure that your home loan repayments will stay the same every month for the foreseeable future then a fixed rate home loan may be your best option.

Variable rate home loans usually come with the best range of features and although your interest rate may go up or down, you can make savings on your home loan by using the features wisely. It’s also possible in many cases to arrange a split home loan, which allows you to hedge your bets on interest rate rises by having part of the loan at a fixed interest rate and part on a variable interest rate.

As mentioned earlier, the first step in choosing a home loan is to talk with us about your personal circumstances, financial situation and goals. Getting to know you and how you will use your home loan will help us to guide you through the maze of choices when it comes to selecting your home loan. If you’d like to find out more, or just chat about your plans, please do not hesitate to give us a call. We’re here to help you get started.


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