property Archives

Why now may be the time to buy – but be careful.

May 12, 2023

The property market is changing, creating opportunities for some and traps for others.Today I tried playing with Chat GPT and asked it to write my blog on the Sydney property market – and was amazed by the results!

“Now, we all know that Sydney is a fabulous place to live with its vibrant city life, beautiful beaches, and stunning harbour. And, unsurprisingly, the property market is always bustling here. So, what’s happening now?” it said as if Sydney’s streets were paved with gold.

Now, there’s no doubt that Sydney property investors have done well over the years. But a simple request to write about today’s property market produced gushing results.

Over the years, my clients have done well where they have made wise investments rather than just following the latest fad.

But, as we start to see the property market pick-up, many are starting to rush headlong into investments that could well be too good to be true. This week’s Australian ran an article stating “NDIS property promotions underplay the complexity of these increasingly popular investments”.

The article cautioned against gullible investors being blindsided by property spruikers.

And yet, at the same time, many economists are predicting growth in the property market – it’s just a case of choosing widely. This week we arranged finance for a young couple Sydney who have been clients for a few years who were wise-enough to sit out all the speculation that was occurring in the property market of Covid days.

Now they have worked out that, with interest rates almost at a peak, the market may be about to lift-off – so they have taken the plunge.

But I am also hearing other stories of project marketers flogging house-and-land packages to people who are on disability benefits and who hope to have enough income by the time the property settles in 2024. It may work out for them, but there’s a lot of risk.

There’s no doubt we are entering into a Brave New World. But that doesn’t stop us doing our due diligence before we buy.

If you want to talk more about your property and finance needs, please contact me on 02 9922 5055.

By Graeme Salt

Australia enters a two-speed property market

May 5, 2023

By Graeme Salt

For the rest of the year Australia will have a two-speed property market.

For those with strong incomes and healthy savings, Australia is a land of opportunity with a property market starting to rise.

But for others, trapped by high interest rates, there’s limited opportunity. For them – refinancing or buying will be tough.

According to Corelogic housing values look to have bottomed out, with Sydney now 3.0 per cent higher than the recent trough recorded in January according and CBA now predicts prices will jump 5 per cent this year.

If you’re looking to get into the market – this could be your chance.

However, at the same time, up to 880,000 existing homeowners will need to find hundreds, or even thousands, of dollars more each month when their fixed-rate periods expire this year.

According to NAB close to 40 per cent of their existing home loan customers would struggle to meet the lending criteria of a different bank.

Get ready for six months of bad news as households servicing a $550,000 mortgage will suffer an $891 increase in monthly repayments. And someone with a $1 million mortgage would have to fork out an extra $1,620 each month.

As a result, it’s hard to envisage a really buoyant market for some time.

Until interest rates fall, or credit policies ease, house prices are unlikely to rise significantly.

But the long-term prediction for housing remains rosy. With 400, 000 arriving here from overseas this financial year alone, demand for property remains strong.

The bell has been rung for the bottom of the market – where to next?

If you want to talk to me about your lending needs, I can be contacted on 02 9922 5055 or message me here

Mortgage Rate Increase – Need a Break ? Contact your Broker Now!

March 7, 2023

Rates Concerning you? Call your broker to get a Rate Reduction

If you’re a homeowner with a mortgage, you know how important it is to stay on top of your payments and make sure you’re getting the best deal possible. Interest rates can play a significant role in the cost of your mortgage, and a high interest rate can end up costing you thousands of dollars over the life of your loan.

Fortunately, there’s a way to reduce the interest rate on your home loan and potentially save yourself thousands of dollars in the process. By calling your mortgage broker, you can take advantage of their expertise and access to a wide range of lenders to find a better rate that suits your needs.

Why Call Your Mortgage Broker?

Mortgage brokers are licensed professionals who specialize in helping people find the best mortgage rates and loan terms for their specific needs. They work with a variety of lenders and financial institutions to find the best deals for their clients and can help you save money on your mortgage in a number of ways.

Here are a few reasons why you should call your mortgage broker to help reduce the interest rate on your home loan:

They can negotiate on your behalf: Mortgage brokers have established relationships with lenders and can negotiate on your behalf to secure a lower interest rate. They know the ins and outs of the industry and can help you navigate the complex mortgage market to find the best deal for your unique situation.
They have access to a wider range of lenders: Mortgage brokers work with a wide range of lenders, including banks, credit unions, and other financial institutions. This means they have access to a larger pool of mortgage products and can find you a better rate than you might be able to find on your own.
They can help you refinance: If you’re already locked into a high-interest mortgage, your mortgage broker can help you refinance to a lower rate. This can save you a significant amount of money over the life of your loan and help you pay off your mortgage faster.

How to Get Started

If you’re ready to reduce the interest rate on your home loan, the first step is to call your mortgage broker. They can help you understand your options and guide you through the process of finding a better rate.

Here are a few tips to keep in mind as you get started:

Gather your documentation: Your mortgage broker will need to see your current mortgage statement, credit report, and income documentation to help you find a better rate. Make sure you have all of this information on hand before you call.
Be clear about your goals: Let your mortgage broker know what your goals are for reducing your interest rate. Are you looking to save money on your monthly payments, or do you want to pay off your mortgage faster? Be clear about what you’re looking to achieve so your mortgage broker can help you find the best deal.
Ask questions: Don’t be afraid to ask questions or clarify anything you don’t understand. Your mortgage broker is there to help you, so make sure you’re comfortable with the process and understand your options.

Conclusion

Reducing the interest rate on your home loan can be a great way to save money and pay off your mortgage faster. By calling your mortgage broker, you can take advantage of their expertise and access to a wide range of lenders to find the best deal for your unique situation.

If you’re ready to start saving money on your mortgage, call your mortgage broker today and see how they can help you reduce your interest rate.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to save your money and sanity!

Doug Daniell – CEO – Origin Finance

New Home Loan Borrowers Getting Cheaper Loans than Existing Bank Customers

March 6, 2023

If you’re considering taking out a home loan, you may be wondering why new borrowers seem to be getting much cheaper loans than existing bank customers. It’s a trend that has become more pronounced in recent years, and it can be frustrating for those who have been loyal to their bank for many years. If you’re an existing borrower, call your broker now!

There are a few reasons why this is happening, and it’s important to understand them if you want to make informed decisions about your home loan.

Firstly, competition in the home loan market has increased dramatically in recent years. There are now many more lenders offering home loans than there were a decade ago, and this has driven down interest rates and fees. New borrowers are often able to take advantage of these lower rates, while existing customers may be locked into higher rates that were set when there was less competition.

Secondly, banks are increasingly using incentives to attract new customers. These incentives can include lower interest rates, fee waivers, cashback offers, and other benefits. While these incentives can be attractive to new borrowers, they may not be available to existing customers.

Thirdly, banks are more likely to offer their best rates to customers who have a strong credit history and income. New borrowers who meet these criteria may be able to secure much lower rates than existing customers who have had a change in their financial circumstances since taking out their loan.

So, what can existing bank customers do to ensure they are not paying more than they need to for their home loan? The first step is to shop around and compare rates from different lenders. Even if you are happy with your current bank, it’s worth seeing if there are better deals available.

Another option is to negotiate with your bank. If you have a good credit history and income, you may be able to negotiate a lower rate or fee waiver. It’s also worth asking your bank if they have any loyalty programs or incentives that you may be eligible for.

In summary, it can be frustrating for existing bank customers to see new borrowers getting much cheaper loans. However, it’s important to understand that this is a result of increased competition in the home loan market, and banks’ efforts to attract new customers. By shopping around and negotiating with your bank, you may be able to secure a better deal on your home loan.

To see how much you can save contact your broker or call 1300 30 67 67 or fill in the enquiry form on this page.

Doug Daniell

CEO – Origin Finance

Fixed vs. Variable Loans Which is right for you?

March 4, 2023

As mortgage brokers, one of the most common questions we receive from home loan borrowers is whether they should fix their loans, especially at the moment as rates have been steadily rising. While there is no one-size-fits-all answer to this question, there are a few factors that borrowers should consider before making a decision.

First, it’s important to understand what a fixed-rate home loan is. With a fixed-rate home loan, the interest rate remains the same for a set period of time, typically between one and five years. This means that borrowers will know exactly how much their mortgage repayments will be during this period, making it easier to budget and plan their finances.

On the other hand, a variable rate home loan has an interest rate that can change at any time, depending on market conditions and the decisions of the lender. While variable rate loans can offer more flexibility and potentially lower interest rates, they also come with the risk of higher repayments if interest rates rise.

So, should borrowers fix their home loans? Here are a few factors to consider:

Interest rate trends: If interest rates are currently low and are expected to rise in the near future, fixing a home loan could be a smart move. This will protect borrowers from potential rate hikes and help them budget with certainty.
Budgeting needs: If borrowers prefer to have a set repayment amount each month to make budgeting easier, a fixed-rate home loan may be the way to go. This is especially true for those who are on a tight budget or have limited income.
Flexibility needs: If borrowers anticipate the need to make extra repayments or pay off their loan early, a variable rate home loan may be a better option. Fixed-rate loans often come with restrictions on extra repayments or may charge fees for early repayment.
Risk tolerance: Finally, borrowers need to consider their risk tolerance. Fixed-rate loans offer stability and predictability, but they may also come with higher interest rates. Variable rate loans can be more volatile, but they may also offer lower interest rates and the potential for savings.

Ultimately, the decision to fix a home loan comes down to each borrower’s unique circumstances and preferences. As a mortgage broker, it’s important to help your clients understand the pros and cons of each option and guide them towards the loan that best meets their needs.

In conclusion, fixing a home loan can offer stability and predictability for borrowers, but it may not be the best option for everyone. It’s important to carefully consider the interest rate trends, budgeting needs, flexibility needs, and risk tolerance before making a decision. As always, working with a knowledgeable and experienced mortgage broker can help borrowers navigate the options and make an informed decision.

Please call 1300 30 6767 to discuss or fill in the form here to receive a call or book an appointment

Rising rates put brakes on home loan growth

November 3, 2022

Clancy Yeates| 1 November 2022| Sydney Morning Herald

Mortgages: Rising rates put brakes on home loan growth (smh.com.au)

As the Reserve Bank prepares to raise interest rates again to tame the highest inflation in decades, loan growth in the $2 trillion mortgage market is showing signs of softening and analysts say the slowdown in lending has further to run.

New RBA figures, released on Monday, showed housing credit growth – a key long-term influence on bank profits – slowed to a 10-month low of 7.3 per cent in the year to September, from 7.6 per cent a month earlier.

Housing credit growth is slowing, and analysts say the trend has much further to run.CREDIT:PETER RAE

With the RBA expected to raise the cash rate by at least 0.25 percentage points on Tuesday, analysts say it is still early days in the mortgage lending slowdown, which has occurred as house prices have fallen and banks have cut how much they will lend.

Westpac senior economist Andrew Hanlan said the RBA figures provided further confirmation of slowing credit due to higher interest rates, saying overall credit growth of 0.7 per cent in September was the weakest monthly reading since March. Hanlan said while borrowing had grown strongly in 2021 and early 2022, this trend was now reversing as interest rates rose.

“The RBA is quickly removing ultra-easy monetary policy, on the way to a contractionary stance, to fight a significant inflation challenge. The tightening of policy will reduce demand for credit – across households and, in turn, businesses,” he said in a note.

“The housing market is showing the adverse impacts of sharply higher interest rates.”

Some investment houses such as Jarden expect annual housing credit growth will fall to about a third of its current pace by late year, while the Commonwealth Bank said it expects housing credit growth to slow to 4 per cent next year.

Despite the expected slowdown, investors remain upbeat towards the major banks, as lenders are benefiting from a dramatic widening in net interest margins, which compare funding costs with the price of loans. Lenders are also reporting low levels of borrower stress.

Managing director of White Funds Management, Angus Gluskie, said over the next year banks would get the full benefit of rising interest rates across their loan portfolios, and the majority of bank customers could handle higher interest rates.

“These rates are not that expensive. They are a long way below where interest rates have been over the last 20 or 30 years,” Gluskie said.

Chief investment officer at Atlas Funds Management, Hugh Dive, said slowing loan growth was a secondary issue for the market, compared with the risk of bad debts and changes in net interest margins. Dive said that although banks’ bad debts would rise, the increase would be from historically low levels.

“Going into this tightening cycle, unemployment is so much lower than it was in previous cycles,” Dive said.

Jarden analyst Carlos Cacho said growth in outstanding credit was lagging the sharper drop in new lending, partly because banks typically took months to change customers’ mortgage payments. Carlos said he expected housing credit growth to drop to about 2.5 per cent in the second half of 2023.

In business lending, meanwhile, the RBA said credit growth accelerated to 14.7 per cent in the year to September, which was the fastest annual growth since before the global financial crisis in 2008.

Cacho said this was an “incredibly robust” result, noting that other data on business conditions was also still positive. “It just seems like the business environment remains really strong,” Cacho said.

State and Territory Benefits for First Home Buyers

June 27, 2017

The first home benefits have changed dramatically this year with more changes due from 1 July 2017. All of the grants and stamp duty concessions are state administered so vary in each state and Territory.

Most concessions for first home buyers have only been available for new properties. Now there are several states with concessions that include established properties.

The federal government has also introduced First Home Savings account linked to superannuation funds. First home buyers can salary sacrifice into their superannuation fund to later use as home deposit (to a maximum of the current contributions limits). Salary sacrificing into the fund is designed to reduce tax payable, leaving more to contribute to the deposit savings. Interest received on the deposit will also be taxed at concessional superannuation rates.

NSW

A $10,000 grant for new builds valued up to $750,000; stamp duty exemptions for new homes up to $550,000 in value and concessions for homes valued from $550,000 to $650,000.

VIC

A grant of $10,000 to $20,000 for new homes up to $750,000. Full stamp duty exemption from July 1, 2017 for new and established properties worth up to $600,000; plus concessions on $600,000 to $750,000 properties.

QLD

Grant of $20,000 for new builds valued to $750,000, up until June 30, 2017; plus stamp duty exemptions up to $500,000 and concessions up to $549,000.

WA

Grant of $10,000 for new builds or substantially renovated homes worth $750,000- $1 million. Full stamp duty exemption for homes up to $430,000 and concessions between $431,000 and $530,000.

SA

A $15,000 grant for new builds valued up to $575,000

TAS

A $20,000 grant for new builds of any value, reducing to $10,000 on July 1, 2017.

NT

A $26,000 grant for new builds of any value; plus up to $2000 to buy furniture and appliances. First time buyers also get up to $23,000 off stamp duty for established homes worth up to $650,000.

ACT

A $10,000 grant for new builds or substantially renovated homes valued up to $750,000; plus stamp duty exemptions for homes up to $455,000 and concessions for those worth up to $585,000, depending on income levels.

7 Tips to Making a Profit from Cool Markets

July 17, 2015

I am in Perth. It is 3.00am and I cannot sleep. So, what do all good mortgage brokers do in such instances? Reflect on the diverse nature of Australia’s property markets and where best to invest of course!

According to RP Data, Perth property declined 0.4 per cent last month. And, conversations with WA colleagues indicate that there are more falls to come.

A quick stroll through East Perth last night saw construction sites beavering away, yet there were few fluoro shirts of the Fly-In-Fly-Out workers as the resources boom comes off.

This is a far-cry from the property bubble the media goes on about. This tells me that supply will soon exceed demand; putting further downward pressure on price.

One of the beauties of Australia is that its property markets can be diverse. So while Sydney and Melbourne are hot, Perth is flat (and vice versa on other occasions).

And because Sydney and Melbourne have experienced strong capital growth, other markets offer better rental yields (Darwin 5.7 per cent or Hobart 5.3 per cent). Here is the opportunity for investors.

Let’s say you have a Sydney property whose value has increased by 16 per cent in the last 12 months, you have plenty of equity which you could use as a springboard for another purchase. Here is what you do:

Get your mortgage broker to arrange a ‘top-up’ loan which will release the money for a deposit on your new property
Leave that money in an offset or redraw facility so you are not paying interest on it
Wait
Take your time researching possible markets
Wait
Make a low offer an a property (which is probably not going to be in Sydney or Melbourne)
Wait for the sellers to realise that that is the best they are going to get right now

If necessary, keep waiting. Eventually owners of a property in a flat market will appreciate the hard realities of market forces. And for you, the lower the price you pay the better then rental yield.

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