Interest Rate News

This month, the Reserve Bank of Australia decided to leave the cash rate unchanged at 1.5 per cent, and it’s widely believed any change to the cash rate is still some way off. Meanwhile, some banks have dropped interest rates on investor and interest-only mortgages in recent months. If you have an investment property, it’s worth checking in with us to see whether your investment loan is right for you. We may even be able to find you a more competitive rate.

Property Market News Across the combined capital cities, home dwelling values fell by -0.31 per cent over the month ending April 30. Hobart was the outstanding performer, with home values rising 1.16 per cent. Canberra was next with a rise of 0.64 per cent, followed by Darwin at 0.58 per cent and Adelaide at 0.06 per cent. Perth and Brisbane experienced marginal home value reductions of less than .05 per cent, whilst Sydney home values fell 0.36 per cent and Melbourne saw the biggest monthly home value reduction of 0.45 per cent.

Auction activity increased across the combined capital cities in the week ending Sunday April 29, however clearance rates around the nation are showing significant declines. In Victoria, there were 1,419 auctions with a 66 per cent clearance rate. NSW held 975 auctions, but only 58 per cent of stock sold. In South Australia there was a 62 per cent clearance rate on 134 properties, and in Canberra, 92 properties went to auction and 64 per cent sold.

Clearance rates were even lower in other states. In Queensland, 305 properties went to auction and 42 per cent sold, whilst Western Australia saw 44 auctions take place, returning a clearance rate of only 38 per cent, and Tasmania had the lowest clearance rate of around 33 percent, but only eight properties went to auction.

Winter is coming!

It can be a dreary time of year in the property market. So why not take advantage of the busy autumn selling season while it lasts? With auction clearance rates generally softening, you may be able to negotiate a fantastic deal for a new home or investment property. Whether you’re a first-home buyer, next home buyer or investor, Element Finance can provide expert advice about all your finance needs. Please get in touch to arrange pre-approval on a loan for your next property purchase today!

Capital growth potential 

Capital growth is the increase in value of a property over a period of time. Investors use a range of strategies to build wealth, and looking for the properties that are most likely to experience significant capital growth, is often high on their radar.

So, how do you find an investment property with solid capital growth potential? Look for locations and suburbs experiencing economic growth. Economic growth creates jobs, which brings more people to an area, which may flow through to the property market via increased demand for housing. Greater demand means more chance of capital growth.

Next, be sure to choose an investment property that is close to amenities such as schools, shopping centres and public transport – when an area is experiencing economic growth, these properties will be in the most demand.

Rental returns

Some investors choose to focus on properties with a high rental yield, rather than just looking at capital growth potential. The rental yield is the rate of income return compared to the costs associated with the investment property. It’s typically expressed as a percentage, and may be calculated as a gross or net figure.

Investors who are following a rental yield strategy will typically look for areas where rents are high compared to the property value. Talk to us as we have access to have access to exclusive property tools to help you locate a suitable area.

Low maintenance costs

As an investor, it’s wise to opt for a low-maintenance property. They not only cost less to keep, but they’re less hassle too. Units can be easier and cheaper to maintain than old houses for example, but keep in mind you’ll most likely have to pay body corporate fees.

Ways to add value 

When choosing an investment property, ask yourself whether there is room for improvement, or ways to add value. You might not renovate it right away, but when you do, be sure to do plenty of research to find out what’s in high demand. Ask your local real estate agents what kinds of property features resonate well with tenants and future buyers in the area.

Choosing the right investment property requires careful research and planning. Luckily, one area you don’t have to worry about is finding the right investment loan for your specific needs. We can take care of finding you a loan product that matches your financial circumstances, while working with your investment goals. Please call us today!

This month, the Reserve Bank of Australia kept the official cash rate unchanged at 1.5%. The RBA’s decision to hold the cash rate was widely anticipated by economists. In September, some of the major banks lowered interest rates on fixed rate loans, so it could be a good time to speak to us to see if this option works for you. Overall, interest rates remain low and there are some very competitive products out there, so call us if you’d like us to check your home loan features and rate!

Property Market News

Dwelling values increased in all capital cities except Sydney and Darwin last month. Hobart led the way, with a month-on-month change in dwelling values of 1.71%. In Melbourne, values rose 0.86%, while in Canberra they were up 0.56%. Brisbane saw increases of 0.28%, and Perth experienced 0.08% growth. Adelaide was slower, with an increase of 0.03%. In Sydney, home values decreased by 0.13% and in Darwin they fell 0.68%.

While auction activity was strong earlier in September, it dropped off during the final week of September (week ending October 1). In Victoria, there were only 137 scheduled auctions, with 89% of properties selling, while in New South Wales, 690 auctions were held and only 67% of properties sold. That’s a big drop in volume compared to the previous week (ending September 24), when both states had a combined 2,672 properties go to auction and clearance rates of 74% for Victoria and 70% for New South Wales. Perhaps everyone was just too busy watching the footy Grand Finals!

In South Australia, 78% of the 45 properties scheduled for auction went under the hammer in the week ending October 1. The ACT held 45 scheduled auctions and achieved a clearance rate of 76%. Western Australia had 17 scheduled auctions (67% clearance rate) and Queensland had 306 scheduled auctions, with a 39% clearance rate. The Northern Territory had 6 scheduled auctions (25% clearance rate), while Tasmania only had one property go to auction, and it sold!

Spring is traditionally the most popular time of year for vendors to sell, and with more competition out there, you may score an attractive deal on the property of your dreams! So please give us a call to talk about your spring property plans, we’re here to help you find you a mortgage that is tailored to suit your financial circumstances and goals, and we’d love to help!

How does it work?

If the equity in your home has grown significantly because you have been paying off your loan for a while, have made extra repayments, or the value of your home has increased, then you may be in a position to refinance your home loan to access your equity. This could give you enough cash to go down to a dealership and buy that new car. Having cash-in-hand may even give you a little extra bargaining power!

Whilst refinancing may mean that your home loan repayments increase somewhat, the increase could potentially be less than the cost of a car loan repayment and your mortgage repayment combined. Car loans and personal loans tend to carry a much higher interest rate than your mortgage. Depending on where you get your car or personal loan, you could pay anything from 6.5% p.a. up to 14.5% p.a. in interest. (Always talk to us before taking out any kind of loan to be sure you’re getting a suitable loan for your needs at a competitive rate.)

Talk to us and we’ll help you to assess your financial position on your loan to see if it is the right move for you.

What are the drawbacks?

It’s important to be aware that if you take some equity out of your home loan, your home loan repayments are likely to increase. You probably won’t be paying as much as you would if you had a separate car loan and a home loan as well, but if you take the full 30-year term to pay it off, it may cost you more in interest over the life of the loan. So if you decide to access your equity to buy a car, we recommend that you make additional repayments and pay it back as quickly as you can. This will help you to maximize the benefit of the lower interest rate you get by using your mortgage rather than a car or personal loan.

Talk to us first

Before you make any large purchase that may require a loan, it’s important to talk to us about your finance options so we can help you find a solution that’s right for you. We’ll help you decide whether refinancing and using your equity to buy what you need is a viable option, or if another type of finance could be more suitable. And above all, remember that car dealerships only offer one type of finance, whereas we offer a variety of finance options that can be tailored to suit your personal financial circumstances and goals – so always talk to us first. We’re here to help you achieve your financial goals, so call us today.

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!