Government announces comprehensive credit reporting (CCR)

December, 2017 by

In early November, Treasurer Scott Morrison announced the Federal Government would implement mandatory comprehensive credit reporting (CCR) from 1 July 2018, as recommended by the Productivity Commission.

The CCR regime will be introduced with the Big Four banks and is likely to be rolled out to other credit providers in the Australian market, according to finder.com.au. The new regime will provide lenders with a better understanding of a borrower’s risk profile and their propensity to service debt.

For borrowers with a good credit history, the new regime and availability of data are likely to provide them with greater access to more competitive products.

According to a recent finder.com.au survey of 2,033 respondents, 67% of Australians believe a sound financial history should provide them with access to cheaper interest rates. Angus Raine, Executive Chairman of Raine & Horne, noted: “This change will be fantastic for first home buyers who are just coming to grips with their finances and who are seeking a suitable first home loan.

“More comprehensive credit reporting will give consumers realistic and factual figures to work with, which will take some of the emotion out of the borrowing process.”

Adelaide is the most affordable for renters

December, 2017 by

The South Australian Government is injecting billions of dollars into Adelaide’s infrastructure, and now there’s good news for renters too.

According to renter.com.au (ASX: RNT), the average weekly rent for an apartment in Adelaide is $290 a week. If you prefer a house, then Perth is for you. In the Western Australian capital, the average weekly housing rent is $350. The next most affordable is Hobart, where the average house rents for $395 a week.

Comparatively, average rents rose in three states in October, according to renter.com.au. Victoria was up 1.78% to an average weekly rent of $285, with Western Australia increasing by 1.56% to $325 a week and South Australia by 1.96% to $260 a week.

*All figures sourced from CoreLogic’s Hedonic Home Value Index November 2017

Buyer numbers at auctions in Brisbane and Sydney increasing

December, 2017 by

As the end of the year approaches, everyone is getting their Christmas shopping lists in order – and for many buyers, this seems to include a new property.

This trend bodes well for auction campaigns, which can significantly reduce the days on market it takes to sell a property, as it creates concrete deadlines for buyers and sellers. “We’re noticing that buyer numbers are increasing at both onsite and in-room auctions as it gets closer to Christmas and it’s evident most buyers want to secure a property before the holiday season,” said David Bennett, Chief Auctioneer, Raine & Horne in Brisbane.

Last week in Queensland, Raine & Horne Cleveland conducted in-room property auctions at the Pacific Resort Cleveland, with eight properties up for grabs. The auction event, led by David, attracted 45 bidders and interested parties, with local owners and buyers were impressed with the outcomes. David noted, “Over the past three weeks we’ve seen the sale clearance rate stay above 45% and post-auction sales increase to around 70% within days of the auction. These results suggest the demand for Brisbane property remains strong.

In Sydney, recent results at Raine & Horne Marrickville were similarly positive, with an in-room auction campaign resulting in multiple bidders for most properties and another large crowd on site testing the market. This successful auction campaign saw 10 out of 12 properties sold on the night or within a week of the auction, and is a significant indicator that there is plenty of life still in the Sydney property market, noted Angus Raine, Executive Chairman, Raine & Horne.

First home buyers returning to real estate

December, 2017 by

The September housing finance figures released in early November by the Australian Bureau of Statistics (ABS) show that first home buyers are continuing to make their presence felt in the housing market, according to the Real Estate Institute of Australia (REIA).

“The proportion of first home buyers, as part of the total owner-occupied housing finance commitments, increased to 17.4% and this is the highest proportion since November,” said REIA President Malcolm Gunning.

Angus Raine, Executive Chairman, Raine & Horne said a combination of low-interest rates and state government incentives were proving pivotal in attracting younger Australians to home ownership.

The Reserve Bank left the official cash rate at 1.5% in early November, and Angus noted that a rate increase is now at least 12 months away. “Historical low-interest rates present a valuable opportunity for first home buyers to shop around among the lenders to land the best home loan rate possible,” he said. “If you’re unsure about where to start the home loan journey, it might be worth seeking the advice of a finance specialist such as Our Broker.” To contact a mortgage specialist from Our Broker, call 1800 913 677.

Dwelling Approvals Support Low Rates

November, 2017 by

New dwelling approvals rose marginally in August but remain below the peaks of 2016, supporting the decision of the RBA to leave rates on hold, according to Tim Reardon, Principal Economist for the Housing Industry Association (HIA).

“Residential building approvals are around 11% lower than their peak last year. The slow-down in activity has been gradual but activity still remains at high levels,” said Tim.

The move to record low interest rates was instrumental in bringing new home building starts to an all-time high last year, noted the HIA economist. “A move to increase rates at this time would unnecessarily compound the decline in activity that is already underway.

“The market is already adjusting to constraints on domestic and foreign investors.”

Growth in approvals in August was driven by a 2.3% increase in multi-unit approvals. However, approvals for new detached houses fell by 1.1%. “We expect this modest decline to progress for the next couple of years,” said Tim. “Increases in energy costs have had a similar impact to an increase in interest rates by restricting both corporate and household consumption.

“Combined with low wage pressures and the Australian dollar having appreciated, it is unlikely that the RBA will need to move rates in the near future,” concluded Tim Reardon.

Slash your mortgage repayments by refinancing with Our Broker

November, 2017 by

Following the Reserve Bank of Australia’s decision to keep the cash rate on hold at 1.5%, industry research reveals the average mortgage holder could save tens of thousands by refinancing their home loan.

Owner-occupiers paying principal and interest at the average rate of 4.31% can save up to $50,076 by switching to one of the lowest rates on the market of 3.44%. At the same time, investors paying interest-only at the average rate of 4.89% can save up to $59,524 by switching to one of the lowest rates on the market of 3.94%.

“Just because the cash rate is standing still doesn’t mean mortgage holders should,” said Sally Tindall from financial comparison website, RateCity. “A $50,000 saving is not to be sneezed at. That’s a lot of people’s annual salaries, right there,” she said.

If you feel you need some help negotiating the mortgage minefield, why not call Our Broker today on 1800 913 677. With access to over 35 lenders, Our Broker can connect you with the best home loan products to suit your circumstances.

REA reveals Australia’s best lifestyle suburbs

November, 2017 by

Buyers seeking suburbs offering the nation’s best lifestyle can expect to pay $731,000-$2,615,000, according to new research from realestate.com.au

The research was collected using data from CoreLogic and the Australian Bureau of Statistics.

Brisbane suburbs make up seven of the national top ten lifestyle suburbs with the sunshine state delivering not only on proximity to the beach but also other key lifestyle factors such as faster commute times.

St Kilda West is the nation’s top lifestyle suburb, followed by South Brisbane, Dutton Park, Spring Hill and Kangaroo Point, says realestate.com.au. St Kilda West, in inner Melbourne, also grabbed the top spot based on price too, with the highest median house price of $2,615,000. On the other side of the ledger, Corinda in Brisbane has the lowest median price at $731,000 among the leading lifestyle suburbs. “Nationally the list shows some suburbs that buyers may have traditionally overlooked but which have great walkability,” said REA Group Chief Economist Nerida Conisbee.

Tasmanian real estate leads the housing charge

November, 2017 by

The latest CoreLogic Home Value Index results confirmed that dwelling values edged 0.2% higher across Australia in September, led by a 0.3% rise in capital city values and a 0.1% gain across the combined regional markets. National values are up 8.0% over the past twelve months. 

Hobart cemented its position as the best performing housing market. The past twelve months has seen Hobart dwelling values surge 14.3% higher. This is the highest annual growth rate for real estate values in the Tasmanian capital since 2004. Yet the cost of housing remains substantially lower in Hobart than any other capital city with a typical house value of $412,340 and a median unit value of just under $320,000.

Melbourne’s housing market remains relatively resilient with dwelling values increasing by almost 1% in September and by 2.0% for the quarter.

CoreLogic head of research Tim Lawless said, “The stronger housing market conditions in Melbourne are supported by auction clearance rates which have consistently remained above 70%. Additionally, advertised stock levels remain remarkably low and private treaty sales continue to sell rapidly, averaging 30 days on market.”

National housing conditions steady

October, 2017 by

Hobart with growth of 13.6% emerged as the country’s best performing capital city based on growth in dwelling values over the past twelve months, according to the latest CoreLogic Home Value Index.

Sydney came second with 13.0% growth just ahead of Melbourne with an annualised average increase of 12.7%.

For investors and self-managed superfunds seeking decent income returns, CoreLogic says that regional investments are producing stronger yields. The combined gross rental yield for houses in regional Australia is 4.9% compared with 3.1% for city houses. The difference isn’t quite as stark for apartments. However, regional units are still well ahead with gross rental yields of 5.2% compared to 4.0% for city apartments.

For what it’s worth, Darwin is generating the strongest rental yields of all Australian capital cities. In the Northern Territory capital, houses are producing gross yields of 5.5% and apartments are retuning 5.8%.

Compared to a year ago, national residential property listings are down by 4.3%, according to SQM Research. Listings were down in Hobart by 20.2% and in Melbourne by 15.3%. The tight supply in Victorian and Tasmanian capitals will help to maintain the mounting pressure on house and unit prices.

Cash rate on hold signals good news for property

October, 2017 by

At its meeting in early September, the RBA decided to leave the cash rate unchanged at 1.50%.

The RBA has cited several reasons for leaving interest rates on hold including improving global economic conditions. “Labour markets have tightened further and above-trend growth is expected in a number of advanced economies, although uncertainties remain,” said Philip Lowe, Governor of the RBA. Growth in the Chinese economy, for example, is being supported by increased spending on infrastructure and property construction. “Commodity prices have risen recently, although Australia’s terms of trade are still expected to decline over coming years,” said Philip.

In the United States, the Federal Reserve expects to increase interest rates further, which will most likely ease the pressure on the RBA to move rates up anytime soon, noted Angus Raine, Executive Chairman, Raine & Horne.

In Australia, the recent economic data has been consistent with the RBA’s expectation that growth in the Australian economy will gradually pick up over the coming year, as the decline in mining investment runs its course. The outlook for non-mining investment has improved recently and reported business conditions are at a high level. Residential construction activity remains at a high level, but little further growth is expected. Retail sales have picked up recently, although slow growth in real wages and high levels of household debt will restrict spending.

Employment growth has been stronger over recent months and has increased in all states, which is excellent news for real estate, notes Angus. “The low level of interest rates is continuing to support the Australian economy and will underpin real estate markets longer-term.”

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