As predicted by most market forecasters, the Reserve Bank of Australia (RBA) decided to keep the official cash rate on hold at 1.75% once again at its July meeting. The RBA has indicated that it’s waiting for more information before deciding if further cuts to the cash rate will be necessary.

However, an Aussie dollar that’s strengthening against other currencies in light of global market volatility, combined with a lower than expected national inflation rate would seem to suggest that further rate cuts may be on the horizon. Whilst some analysts are speculating the cash rate could go as low as 1%, others believe a rate cut in August to 1.5% could see the end of the RBA’s easing bias in 2016.

It is usual for property markets to slow somewhat at this time of year, and the Federal Election also caused a reduction in the number of auctions held at the start of this month. For the week ending Sunday 03 July, there were only 850 auctions scheduled nationally, which is a significant drop since the same time last month when there were 1960 scheduled auctions.

Auction clearance rates also registered a significant drop in most markets. Queensland held 68 scheduled auctions with a very low clearance rate of just 36%. Western Australia held 30 scheduled auctions with a clearance rate of 38%, ACT held only 27 scheduled auctions with a clearance rate of 54%. NT was also low in activity, with just 9 scheduled auctions and a clearance rate of 22%.

The larger markets performed a little better however. Victoria had 270 auctions with a clearance rate of 67%, NSW had 365 scheduled auctions with a clearance rate of 78% and South Australia had 70 scheduled auctions with a clearance rate of 62%.

During June, average home values didn’t show much movement at all. Sydney’s home values increased by just 1.15% and Hobart’s home values increased by 1.81%. Melbourne showed a marginal rise in home values of just 0.77%, Brisbane/Gold Coast also had a marginal increase of 0.11%. All other markets showed marginal declines, with Darwin showing the most significant decrease in home values at -1.55%, Adelaide following with a decrease of -1.27%, Canberra next with a decrease of -1.11%, Perth showing a decrease of -0.79% and Brisbane showing a home value decrease of -0.11%.

Following the RBA’s decision to cut the cash rate in May, lenders have improved their interest rates for owner-occupier, property investment and commercial property buyers. Interest rates are very competitive and with the property market finally showing signs of slowing down for winter, lenders are offering some great deals to stimulate more business – so please call us today.

Getting your budget under control and your finances in order is absolutely essential to anyone looking to apply for a home loan, but it’s particularly important for first home buyers about to take the first step on the property ladder. Now the end of financial year has arrived and you’re getting all your paperwork together for your tax return, why not take stock of your financial situation and plan your budget for the year ahead at the same time? Here’s a few things to consider if you’re looking to get financially fit for a home loan application in the new financial year.

Reassess your budget and get serious about your savings.

When you apply for a home loan, particularly as a first home buyer, it is important to have a thorough understanding of your financial situation and good savings habits. Lenders will want to see an established history of regular savings before they will give you their best rate on a home loan and for this reason, you should take a realistic look at your spending habits and create yourself a budget to ensure your savings will grow at a steady rate.

Work out how much deposit you’ll need and set yourself a savings target.

If you set yourself a savings target, you may find it will be much easier to stick to your budget. To set your target, first you’ll need to work out how much you need for your deposit. The amount of deposit you will need will depend on the cost of the property you want to buy, but if you have an idea of the kind of property you want to purchase you’ll be able to set a goal. It’s recommended that you have a deposit of at least 5% of the purchase price, however if you can possibly save 20% of the purchase price you’ll avoid paying Lenders Mortgage Insurance.

Make an accurate assessment of any debts and ongoing expenses.

Lenders assess your creditworthiness on the amount of money you already owe, your ability to repay your debts and your capacity to take on more debt. Paying down any credit card debts or personal loans prior to applying for your home loan will improve your borrowing capacity and give you the best chance of loan approval when you apply.

Even if you don’t have any debt on your credit cards, lenders take into consideration the credit limit on your credit cards and count this as potential debt. So if you have several credit cards, it may be a good idea to cancel some of them now if you are planning on applying for a home loan in the next financial year.

If you have a lot of debts, think about consolidating them.

If you take stock of your debts and realise you won’t be able to pay them all off anytime soon, it’s a good idea to look at ways to reduce your interest liability. Credit cards, store cards, short-term personal loans and cash advances all carry high interest rates and this can make them quite difficult to pay down. Getting your finances in order may mean it’s time to consolidate your debts.

Consolidating your debts means rolling all your debts into one, usually using a loan that has a lower interest rate. If you have quite a few expensive debts it may be possible to roll these into your home loan if you have one, or perhaps a personal loan that carries a lower interest rate overall. This may save you a great deal of money on interest payments, which is money you could use to pay off your debts faster. It could also allow you to spread your repayments over time, making them more affordable. If you want to be eligible to apply for a home loan in the next financial year, consolidating your debts sooner rather than later may be a good idea.

The end of financial year is a great time to get your finances in order and you never know, you may get a tax refund that could really give a boost to your savings efforts for a deposit for your home! Remember, we’re here to help you get your finances under control so you can save your deposit and get into your new home sooner. If you’re planning on applying for a home loan in the next financial year, don’t hesitate to give us a call today.

The Reserve Bank of Australia (RBA) met for its June meeting last week and decided to keep the official cash rate on hold at 1.75%. With low inflation rates and the Aussie dollar creeping higher, forecasters are predicting that the next rate cut may come as soon as August.

Despite a wild start to winter in many capital cities, property markets have been performing well around the country. For the week ending Sunday 05 June, there were 1960 scheduled auctions. Victoria had the highest number of auctions with 959 achieving a clearance rate of 71%. NSW held 654 auctions which achieved a clearance rate of 77%.

During May, home value growth was strong across all capital cities except for Perth where home values fell by 2.65%. Sydney home values increased by 3.09%, Melbourne 1.63%, Brisbane/Gold Coast 0.21%, Adelaide 0.08%, Darwin 0.74%, Canberra 2.49% and Hobart 2.16%.

Following the RBA’s decision to cut the cash rate last month, lenders have cut interest rates on home loan products across the board. Call us now to check your rate on your existing home loan, or to switch to a fixed rate product. We can also access some amazing rates if you are a first home buyer, next home buyer, property investor or are just looking to refinance – so please call us today.