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Did your Christmas spending get out of hand this year? You are not alone! According to a recent news report, our 2018 Christmas spending binge is expected to leave us with a $29.7 billion credit card debt – that’s equivalent to $1,863 per credit card!

The good news is that mortgage and finance brokers don’t just organise home loans – we’re also fully qualified credit advisors. If you need help to get your debts under control, here’s some info that may help.

What is debt consolidation?

Pay day loans, credit cards, store cards and credit facilities like after-pay accounts often carry high interest rates that can eat up your income and make it difficult to pay off the debt.

Debt consolidation is a way of potentially reducing the amount of interest you pay, making your debts more manageable. Put very simply, the idea is that you take out a low-interest loan and use it to pay off all your high-interest debts, rolling everything into one loan.

What are the options?

There are a couple of ways to consolidate debt. You can:

Refinance your home loan

Refinancing your home loan could help you to access the equity in your home to pay off your debts. Basically, you take out a new home loan that is larger and you keep some of the money to pay off your debts.

Take out a personal loan

This involves using the funds from the personal loan to pay off all your other debts. This is a good option if you want to pay off your debts in a shorter time frame (which could potentially save you much more interest than refinancing your home loan).

What are the benefits of debt consolidation?

It makes debts easier to manage

Instead of having to get keep on track with multiple repayments to multiple parties, debt consolidation means you’ll only have to make one convenient repayment.

Potentially save money on interest

Different types of debt come with different interest rates. For example, credit cards usually have sky-high interest rates, as they are a form of unsecured debt. Home loans and personal loans, on the other hand, usually come with lower interest rates. That potentially means less of your money will be gobbled up by interest payments.

Repayment flexibility

Debt consolidation gives you the option to spread your loan repayments out over time, which could make personal budgeting and repaying your debt easier. You may even be able to get a loan that allows you to make extra repayments and pay off your debt sooner.

To consolidate or not to consolidate?

Using your home loan for debt consolidation purposes is not necessarily right for everyone – it all comes down to your financial situation and goals. Some people, for example, may end up paying more interest on their debt over the life of the loan (25 to 30 years), even though the home loan interest rate is lower than a credit card.

What’s more, by turning your unsecured debt into secured debt (i.e. your home loan), you could lose your home if you default on the repayments. For these reasons, it’s important to speak to a professional credit advisor before proceeding.

Are there other options?

Absolutely! If debt consolidation isn’t right for you, we may be able to suggest other ways to manage your debt – like creating a budget and repayment plan, for example.

If you’ve blown the budget this Christmas, it’s important not to panic. There are many ways to regain control of your finances, so get in touch. If you think your debt levels may affect your capacity to make your home loan repayments – don’t wait! It’s important to get things under control before you miss any repayments. Please call us at Element Finance today.

We hope you enjoyed some quality time with family and friends over the Christmas and New Year break.

Welcome to our first newsletter for 2019. As many people are still on their summer holidays, there’s not much happening in our property markets this month. Few auctions have been listed around the country and most property movements are occurring through private sales.

Property market activity

Declines in property listings are quite typical in summer, however the drop in national property listings in December 2018 was higher than expected at 9.2%. In Sydney property listings declined by a huge 17.7%, Melbourne 17.2% and Canberra 15.5%. Hobart experienced a decline in property listings of 5.8%, Adelaide 4.1%, Darwin 2.9% and Perth 9%.

Home value movements

In 2018, there was a general softening in property values, for both units and houses across the country. Sydney experienced a year on year decline of 8.88%. Melbourne experienced a year on year drop in values of 7.04%. Perth’s home value decline for the year was more moderate at 4.73%. Darwin experienced a year on year decline of 1.54% with most of this fall occurring in December when prices dropped 1.84%.

Other markets experienced year on year growth. Canberra’s yearly home values were up by 3.27%. Brisbane/Gold Coast’s prices were up 0.02% year on year, while Adelaide’s yearly growth was 1.33%. The outstanding performer was Hobart, with an annual home value increase of 8.66%.

Interest rates and lending news

Interest rates have remained stable during the holiday period and we can expect the RBA to keep the official cash rate at 1.5% for some time. The next RBA board meeting will happen on February 5. Some market analysts predict an improvement in economic conditions which may prompt an RBA cash rate rise later this year, whilst others are predicting a cash rate cut. It’s a game of wait and see!

From January 1 the Australian Prudential Regulatory Authority (APRA) removed its 30% limit on interest-only residential property lending. This may prove to be a big bonus for property investors, as it will likely prompt an improvement in lending conditions for them across the board.

What are your plans for 2019?

Did you overspend during Christmas? If you are experiencing a Christmas debt hangover, read our article about how we can help if you’re struggling to organise your finances. We’ve also provided some guidance for those needing to refinance an interest-only loan and ideas for achieving your property goals in 2019. Remember, we’re always happy to chat about your needs and goals so please don’t hesitate to give us a call.

Sincerely,
Mike & the Element Finance Team

Christmas is just around the corner and isn’t it a wonderful time of year? It’s a time for family and friends, a little self-indulgence, of recognising how hard you’ve worked all year and rewarding yourself for your efforts. If you’ve been contemplating a property purchase, why not make that dream a reality? Talk to your mortgage broker about the right finance for your needs today.

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 2019.

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 2018, 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, talk to your mortgage broker at Element Finance Fremantle. They’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 2019 – hopefully one that includes an exciting new property purchase!

 

Everyone looks forward to Christmas and the summer holiday season. After all, ‘tis the season to be jolly. To indulge in festive fare. To get out in the great outdoors and enjoy quality time with family and friends. But this year, it could also be the right time to buy a home. Here are 5 reasons why clever property buyers are considering making a purchase this holiday season.

Motivated sellers

Spring is one of the busiest times of year in Australia’s property markets. That’s when all the buyers are out in force and vendors have the best chance of getting their price. If a vendor is still trying to sell come summer, they’re often highly motivated – or even desperate – to get a sold sticker on that notice board.

This year, spring auction clearance rates were lower than they’ve been for a while. Now summer has arrived, there are many more properties on the market than usual. Motivated sellers are good news for you – they may be more willing to negotiate.

Less competition

Looking for a property during spring can be a nightmare. Open home inspections are packed and by the time you decide you might be interested in a property, there’s usually several offers already on the table. This can be frustrating and detrimental to your capacity to negotiate.

If you start your property hunt when others are away on holidays, you can avoid all the hassle and drama. Again, fewer buyers means vendors may be more willing to negotiate.

Lower prices

Traditionally, property prices fall in December. Last year, the average national home price fell by 0.3%. This year, we can expect this drop to be larger than usual – particularly as there was still a lot of properties left on the market at the end of spring. Prices are already starting to drop in our bigger property markets like Brisbane, Sydney and Melbourne.

The moral of the story? Summer could be the time to buy property – it’s a buyer’s market right now and it probably won’t last for long. CoreLogic are predicting home values are likely to move back into growth territory in most markets by June 2019.

More time

There’s no getting around it. Buying a property takes time and energy. It takes considerable research and a lot of time travelling around to open home inspections.

If you’re working full-time, it can be hard to make time to do it right. You’ll likely be devoting weekends and evenings to your property hunt. The solution? Do your research and inspections while you’re off work and on holidays. That way you’ll get it done faster.

Smoother settlements

Nothing motivates people to wrap up a deal quickly like the idea of taking a break. That goes for real estate agents, lenders, vendors and buyers! Things tend to go much more smoothly when demand is less, so you’re more likely to see a hassle-free settlement during summer than a busier time of year. There are also more special home loan offers available during the off-season, so talk to us to find out more.

So, why not put beach life on hold for a while, and spend the holiday season looking for a bargain on a fantastic new home? If you’re in the market to buy, talk to us at Element Finance about getting pre-approval on your home loan now. It could be a great way to start the new year off with a bang!

Last month, we continued to see considerable property market activity, despite the arrival of the cold weather. Auction clearance rates continue to fall, indicating that conditions are currently favouring buyers. Interest rates remain low and there are plenty of opportunities out there for savvy property buyers and investors. If you’re looking to buy or refinance your existing home loan, call us now.

Interest Rate News

At its July meeting, the Reserve Bank of Australia (RBA) decided to leave the cash rate on hold at 1.5%, where it has remained since August 2016. Most economists now believe the RBA will leave the cash rate on hold until next year, and some are even predicting it will be 2020 before we see a change.

Meanwhile, lenders have been making changes to interest rates outside of the RBA’s decision. Several lenders raised interest rates marginally last month, citing funding costs as the driver.

If you haven’t had a home loan health check in a while, it’s important not to be complacent. Check in with us and we’ll compare the market to determine whether your mortgage still stacks up.

Property Market News

Dwelling values fell by -0.29% across the combined five capitals in the month to June 30. In Melbourne, prices fell -0.41%, while Sydney saw prices decline by -0.33%. Perth experienced a decline of -0.53% and Canberra -0.30%. Darwin experienced the largest monthly fall, with home values decreasing -1.12%. Hobart, Brisbane, and Adelaide all experienced very marginal increases.

Auction volumes have declined in recent weeks, although they are still quite strong for this time of year. In the week ending June 30, Victoria had 873 scheduled auctions and cleared 61% of stock. In New South Wales, there were 726 scheduled auctions, and 56% of properties sold under the hammer. Queensland had the third highest volume – 226 scheduled auctions, but only 32% of properties sold.

In South Australia, the clearance rate was 58% for 75 scheduled auctions. The ACT held 43 auctions, and achieved a clearance rate of 66%, while things were quieter in Western Australia – 38 scheduled auctions and a 22% clearance rate. The Northern Territory had only one auction and the property sold, while neither of the two properties to go to auction in Tasmania were sold.

Winter is a great time to purchase property, as there could be fewer buyers to compete with. What’s more, because the winter months are generally slower in the housing market, vendors may be more willing to negotiate on price. Remember, we offer finance solutions tailored to your specific financial situation and goals, so please speak to us at Element Finance about your finance needs, and if you’re in the market to buy a property, talk to us about pre-approval on your loan today.


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