Home loan rates are on the move
Home loan rates are on the move
Posted on Wednesday, October 14 2015 at 11:59 AM
As one of the big four banks – Westpac – announces its variable home loan rate rise, borrowers are being warned to be prepared for further hikes, with other lenders expected to follow.
Westpac has announced an increase to its variable home loan rates of 0.20 percentage points, effective as of November 20.
Michelle Hutchison, money expert at comparison website finder.com.au, says there have actually been many out-of-cycle home loan rate changes since the last cash rate cut in May.
“It’s interesting to see so much movement in the variable home loans market, particularly when it’s outside the Reserve Bank cash rate cycle.”
Hutchison says the finder.com.au database reveals that 407 variable home loans have changed their rates out of cycle since June this year, 352 of which decreased.
“With low funding costs and record high household deposits, it seems unusual for banks to be lifting variable rates out of cycle right now,” she says. “However, Westpac could be preparing early for APRA’s capital requirements of the average risk weight on Australian residential mortgage exposures to increase from 16 per cent to at least 25 per cent by July 2016.
“Total household bank deposits is at a record high of $737.3 billion, according to the latest APRA data analysed by finder.com.au,” Hutchison adds. “Westpac’s household deposits is also sitting at its highest level, at almost $171 billion, as at August 2015.
“The biggest concern is that Westpac’s rate rise could open the floodgates for the other big banks and the rest of the home loan market to follow, so we’re expecting to see more variable home loans rise in the coming months.
“Westpac holds 23 per cent of the owner-occupied home loan market share out of all banks monitored by APRA, while the big four banks hold a combined 82 per cent. They set the benchmark for the entire mortgage industry.
“We’re clearly seeing banks respond to APRA’s crackdown, and expect to see further movement… so watch this space,” Hutchison warns. “For borrowers, it’s definitely the time to do your research when shopping around for a home loan to ensure you’re getting the best possible deal for your situation as competition looks set to get tighter.”
Extra cost per month for different home loan sizes
Source: finder.com.au/home-loans
Based on current average variable home loan rate of 5.1%
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Even more sellers now in Sydney’s market
Even more sellers now in Sydney’s market
Posted on Tuesday, October 06 2015 at 12:05 PM
SQM Research reports that Sydney residential property listings rose 7.6 per cent during the month of September to stand at 23,533 listings.
Year on year, Sydney listings have
risen 11.1 per cent, suggesting there are now more residential property sellers
in the market than a year ago.
Nationally, the number of listed
properties climbed to 339,026 in September 2015, increasing 1.4 per cent from
August 2015, with the number of sale listings remaining largely unchanged to
this time last year. A monthly rise in sale listings for September was expected
due to the normal spring seasonality historically recorded at this time of
year.
Within the last 12 months sale
listings for Darwin and to a lesser extent Perth have recorded high yearly
growth. Darwin experienced a yearly growth of 22.1 per cent, with sale listings
climbing from 1,719 to 2,081. Sale listings in Perth increased from 20,401 this
time last year to 23,232 in August 2015, a total yearly growth of 16.3 per cent.
In contrast, year-on-year results
indicate that Melbourne and to a lesser extent Hobart experienced excessive
yearly falls. Melbourne recorded the biggest yearly change, with listings
falling by 16.9 per cent, reducing the number of properties for sale to 35,760.
Hobart also recorded yearly falls with records indicating a yearly change of
9.9 per cent.
Managing director of SQM Research
Louis Christopher says: “The Sydney surge in listings is another indicator
suggesting that the Sydney housing market’s slowing. Buyers should now find
there is a little more choice out there compared to earlier this year. Yet, I
note that asking prices are still higher. I suspect vendors are not quite
registering that conditions have changed somewhat since the white-hot market of
autumn.
“The Melbourne result is also interesting in that there was barely any
movement at all in listings in September and that stock for sale is well down
on this time last year. This is suggestive of a strong housing market that
isn’t slowing down at all.”
Source: www.sqmresearch.com.au
While listings in Sydney surged,
asking prices for Sydney dwellings continued to climb over September, with a
total monthly rise of 1.6 per cent for houses and 0.9 per cent for units. The
median asking price for a unit has now reached $636,100, while the median house
asking price in Sydney is $1,143,300, according to SQM Research.
In contrast, median asking house
prices in Canberra recorded yearly falls, with a year-on-year comparison
showing a 12-month decline of 2.5 per cent for houses and 0.3 per cent for
units. Perth median asking prices continue to record yearly falls – in
particular asking prices for houses are down 5.3 per cent over the last 12 months
and 1.7 per cent for units.
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Home loan numbers high but investors’ loans drop
Home loan numbers high but investors’ loans drop
Posted on Friday, October 09 2015 at 2:16 PM
Australians’ appetite for property shows no signs of slowing, with the value of new home loans surging in August 2015 to a fresh high of $34.6 billion, according to a report released today.
Owner-occupiers make up the huge gains over the month, according to the head of new banking business act. Amanda Watt, who welcomed a rise in the proportion of first homebuyers in the market.
Over the month, the value of new home loans taken for owner-occupier housing surged 6.1 per cent to a record $20.8 billion, while the value of investment housing loans showed a drop of 0.4 per cent to $13.6 billion, taking the total value of home loans written in the month to a fresh record of $34.6 billion – up 3.5 per cent according to Australian Bureau Statistics (ABS) housing finance data.
In original terms, the number of first homebuyer commitments as a percentage of total owner-occupied housing finance commitments rose to 15.7 per cent in August from 15.4 per cent in July, boosted by two official interest rates cuts earlier in the year.
Fixed-rate loans, as a proportion of all new home loans, fell to 9.6 per cent, their lowest level in around four years, as investors took advantage of record low variable interest rates.
act.’s Amanda Watt says the push into property could reflect some Australians’ love affair with the security of bricks and mortar and the gains it offers, at a time when many investors fear putting their money into stocks.
“Not only is property seen as a good hedge against inflation, it’s seen as an all-round wealth builder over the long term.
“There’s more perceived certainty that returns from property will be positive and with a huge level of volatility in share markets in recent months and talk of a correction, Australians are probably holding back from share investments and instead putting their savings into property, from which they can enjoy solid capital gains over the long term and even spectacular gains over the shorter term, as we’ve seen in Sydney.
“Investors, too, can enjoy a regular income stream from rent,” Watt adds.
“With all the current uncertainty in markets in Australia and around the globe, this is expected to maintain a high level of interest in the property market and will continue to support growth in real estate values, and propel even higher the number of home loans being taken by Australians in coming months, with interest rates at historically low levels, which has helped to make the servicing of home loans more affordable,” Watt says.
CommSec economist Savanth Sebastian says the latest housing finance statistics make for interesting reading.
“Not only is the size of the average home loan holding at a record high, but it’s growing at the fastest pace in 12 years,” he says.
“Over the past year the average home loan grew by 15.4 per cent and is showing no signs of slowing down.”
Sebastian suggests policymakers will be encouraged by the lift in owner-occupied loans at the expense of investor finance.
“The value of investment loans has now fallen for three out of the past four months. Overall the housing finance statistics don’t suggest a huge pullback in home lending, although there are signs activity levels are starting to ease.
“Over the next few months the tighter bank lending standards will filter through to the housing statistics.”
He adds: “There’s no doubt the pullback in investor loans is a positive, and will help to cool property prices, but housing is all about demand and supply. Encouragingly, loans to build new homes lifted after falling for the prior three months. If there is a substantial pullback in new construction it could be more of a detriment in the longer-term.”
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Statistics confirm Perth downturn
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Statistics confirm Perth downturn
Posted on Wednesday, October 07 2015 at 11:23 AM
The latest statistics on Perth confirm the property market is softening.
Figures released
by the Real Estate Institute of Western Australia (REIWA) reveal the city’s
median house price fell by 2.7 per cent in the September quarter 2015 to reach $535,000.
There’s been a 14
per cent fall in sales turnover on the back of listings rising by nine per cent
for the quarter.
That means
listing numbers are now up 44 per cent on last year’s result.
Hayden Groves,
president of REIWA, says he’s not surprised by the figures.
“Currently we have almost 15,000 listings on the Perth market, which is
up by about 3,000 on what we would consider normal.”
Only a handful of areas saw an increase in turnover for the quarter,
including Fremantle, Gosnells, Cockburn and Armadale.
The slowdown continued into the rental market, with vacancy rates rising
to 5.4 per cent.
Groves says this reflects the fact that there are nearly 50 per cent
more rental properties compared to the same time last year.
“As a consequence, the overall median rent has dropped to $410 per week
across Perth, and is now typically around $420 for a house and $395 for a unit,
apartment or villa,” he explains.
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RBA announces rates to hold once more
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RBA announces rates to hold once more
Posted on Tuesday, October 06 2015 at 2:03 PM
As predicted by the recent finder.com.au Reserve Bank Survey, which found experts were unanimous in expecting no movement to the cash rate at the October meeting, governor Glenn Stevens announced today that the rate will remain at 2.0 per cent for at least another month.
In his statement he said: “The available information suggests that moderate expansion in the
economy continues.”
CoreLogic
RP Data’s head of research Tim Lawless says: “The flat rate of growth across the
Sydney housing market last month, together with a slowdown in investment
related mortgage activity wasn’t enough to sway the RBA into another interest
rate cut this month.
“We
saw the rate of capital gain flatten out across the Sydney housing market during
September, however the trend rate of growth remains very strong, with Sydney
values almost 17 per cent higher over the past 12 months and 4.6 per cent
higher over the September quarter.
“In
contrast, Australia’s second largest housing market has gathered some momentum
over the past quarter, outperforming Sydney with a 2.4 per cent rise in
dwelling values last month and a 7.4 per cent shift over the quarter. Other
housing market data is suggesting that conditions may be slowing,” Lawless
says.
“With
the Aussie dollar holding around the US71c mark, inflation remaining low and
labour market conditions relatively steady, the RBA is in a good position to
keep interest rates at their record lows.
“With
interest rates remaining on hold, borrowers are still enjoying historically low
mortgage rates, which should continue to drive demand for housing,” he adds.
Onthehouse.com.au
market analyst Eliza Owen says: “Underperformance in the Australian economy
has led to this decision, with further rate cuts anticipated by the end of
2016.”
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Capital city auction report describes national softening
Posted on Thursday, October 01 2015 at 9:06 AM
The Domain Australian Home Auction Report indicates an overall slowdown in home auction markets across the nation, with mixed prospects for the remainder of the spring sales season.
Dr Andrew Wilson, chief economist at Domain, says clearance
rates have fallen in most capitals due to a record numbers of early spring
listings.
All major capitals, except Adelaide, reported
decreases in clearance rates over the month.
“September home auction activity is now generally
tracking below last year’s September levels.”
Wilson says while clearance rates may be down, auction
prices have either risen or remained steady across the cities, reflecting the
seasonal effects of higher-priced auction sales.
“Record-high volumes of auctions will continue to test
capital city markets for the remainder of the year, providing greater
competition among sellers and more choice for buyers.
“This is likely to continue putting downward pressure
on clearance rates – particularly in Sydney, and to a lesser degree Melbourne.”
Sydney
Sydney’s auction clearance rate is 69.8 per cent for September 2015,
down more than five per cent from the August result and well below the May 2015
record of 83.3 per cent.
Wilson says listing numbers are affecting Sydney auction clearances.
“September alone recorded a record average of 859
weekend auctions. This is well ahead of the August average of 738 weekend
auctions and the 590 conducted over September 2014.”
While the city’s median year-on-year auction price had
increased from $1.09 million to $1.151 million, the year-on-year price growth
rate comparisons have fallen solidly over the past four months.
Melbourne
Melbourne’s clearance rate fell only two per cent for the month to
record 73.2 per cent in September, which is more or less on par with last year.
Wilson says lower clearance rates in the Victorian capital
reflect the influence of a record surge in early spring listings.
“With a remarkable number of auctions – nearly 1,000
per weekend over the month of September – Melbourne’s auction market is well
ahead of where it was last year,” he says.
“The city averaged 977 auction listings every weekend
over September, up from the average of 830 over August and significantly higher
than the average of 640 over September last year.”
Melbourne’s median auction price increased 13.1 per
cent year-on-year to reach $820,000 in September.
Brisbane
The Queensland capital saw auction clearance rates
fall in September to 46.2 per cent from 57.4 per cent in August.
Wilson notes auctions have been gaining in popularity in
the city.
“Brisbane averaged 123 auctions per weekend over
September – a significant increase from the average of 106 auctions per
weekend in August.
“This was well ahead of the 99 averaged over September
last year.”
The city’s median auction price remained steady during
September at $700,000, just 1.1 per cent lower than at the same time last year.
Adelaide
Adelaide reversed the negative results from other
capitals, albeit marginally, seeing an auction clearance of 65.3 per cent for
September, which is 0.1 per cent higher than August.
Wilson says the city’s result reflects a steady
improvement in confidence for the South Australian capital.
“Not only was there an increase in Adelaide’s
clearance rates over September, but there was also a significant increase in
auction volumes.
“This reflects the growing confidence of sellers in the
local market conditions.”
Adelaide’s auction median of $597,000 for September
was 12.5 per cent higher than the August figure – a substantial gain.
Canberra
After a strong August result, Canberra’s auction
clearance retracted 6.4 per cent in September to record a figure of 64.3 per
cent, well ahead of the 56.3 per cent from September 2014.
Wilson says the August 2015 figure of 70.7 was the
highest monthly result for more than five years, so the fall in September isn’t
as dramatic as it first appears.
“The underlying growth trend for the auction market
remains encouraging and indicates the consolidation of solid housing market
activity generally in Canberra this year.”
Canberra’s median auction price fell by a marginal
$10,000 to record $675,000 for September.
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Detached house new home sales remain high
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Detached house new home sales remain high
Posted on Friday, October 02 2015 at 11:40 AM
The Housing Industry Association (HIA) New Home Sales Report, a survey of Australia’s largest volume builders, recorded an increase in August 2015, with the level of activity only just short of the high reached in April this year.
“Total seasonally adjusted new home sales increased by 2.3
per cent in August this year, driven by a 3.5 per cent rise in detached house
sales,” HIA economist Diwa Hopkins says. “Multi-unit sales, however, declined
by 1.7 per cent.
“It’s becoming increasingly apparent that total sales
activity has already peaked this year, but today’s update shows that sales are
remaining elevated.”
The overall developments in both HIA New Home Sales and the
equivalent ABS measure, building approvals, are consistent with the HIA’s
outlook for actual new home building activity in 2015/16, according to Hopkins.
“We’re forecasting total dwelling commencements to ease back
from what we expect to have been the peak level in the financial year just
passed, but still remain elevated.”
Detached house sales increased by 3.5 per cent in August
2015, but were 5.1 per cent below the monthly peak that occurred back in April
2014.
For multi-units it’s May 2015 that is shaping up to
represent a peak in monthly sales, with declines occurring in each of the
subsequent months. Multi-unit sales in August this year were down from the May
level by 8.5 per cent.
In the month of August detached house sales increased in
four out of the five mainland states.
Detached house sales increased by 10.2 per cent in South
Australia, 7.0 per cent in Queensland, 3.2 per cent in New South Wales and 3.4
per cent in Victoria. In Western Australia, detached house sales declined by
1.4 per cent.
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Slight shift to favour sellers in property market
Slight shift to favour sellers in property market
Posted on Monday, September 28 2015 at 11:58 AM
The national property market remains balanced, while Sydney and Melbourne have shifted further in favour of sellers, according to the latest Commonwealth Bank CoreLogic RP Data Home Buyers Index (HBI).
The HBI is based on the ratio of properties available for sale compared
with the number of housing loans that are being committed to by Commonwealth
Bank.
The latest report shows there was a slight shift towards sellers between
May and July 2015, although at a national level the housing market remained
relatively balanced for both buyers and sellers.
The top five best buyers’ markets in Australia are:
- Far
West, NSW. - Upper
Green Southern, WA. - Wide
Bay-Burnett, Qld. - South
West, Qld. - Northern,
SA.
The top five best sellers’ markets in Australia are:
- Sydney,
NSW. - Melbourne,
Vic. - Central
Highlands, Vic. - Canberra,
ACT. - Ovens-Murray,
Vic.
Commonwealth Bank’s executive general manager home buying Dan Huggins says:
“At a national level we’re seeing a relatively balanced housing market, however
conditions continue to vary across the different states, territories and
capital cities.
“Although Sydney and Melbourne remain skewed towards sellers, there are
favourable conditions for prospective buyers in state capitals like Hobart and
Darwin, as well as more regional areas across the states.
“It’s important to have the right information when looking to purchase a
property. I would encourage all homebuyers to do thorough research and speak
with a home lending specialist to help make a more informed decision about
where to buy.”
According to the HBI, market conditions in Queensland, Western
Australia, Tasmania and the Northern Territory were skewed towards buyers,
whereas Victoria and the Australian Capital Territory favoured sellers. New
South Wales and South Australia remained neutral.
Market conditions in capital cities were typically either balanced or in
favour of sellers this quarter. Sydney and Melbourne experienced high buyer
demand, creating further competition in the market. Inner West Sydney,
Boroondara City and Eastern Middle Melbourne saw the sharpest swing to favour
sellers. Elsewhere, Gosford-Wyong in Sydney and Mornington Peninsula Shire in
Melbourne experienced balanced conditions.
Adelaide and Canberra experienced a shift further in favour of sellers,
with listed properties outnumbering people actively looking to purchase.
For buyers, the most favourable conditions among the state capitals were
Hobart and Darwin, while Brisbane and Perth remained balanced between buyers
and sellers.
CoreLogic RP Data’s senior research analyst Cameron Kusher says: “While
we’re seeing strong selling conditions in Sydney and Melbourne, the latest
report shows that on a national level the real estate market remains balanced.
“Regional areas continue to offer the best opportunities for would-be
homeowners, while sellers are still benefiting from increased demand in
metropolitan areas.”
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Population growth figures not looking too good
Population growth figures not looking too good
Posted on Friday, September 25 2015 at 11:48 AM
Australia’s population growth rate has slowed to a rate last seen nearly 10 years ago, according to the Australian Bureau of Statistics (ABS).
“In the year to March 2015, Australia’s population growth rate continued
to slow from its peak in 2008-09 and is now just below the 20-year average
growth rate,” Denise Carlton from the ABS says.
“The Northern Territory recorded its lowest growth rate in 11 years, at
0.2 per cent for the year ending March 2015. This is 80 per cent lower than
that of March 2014.
“Net interstate migration losses were the greatest contributor to this
slower growth, with the territory recording its largest ever interstate
migration loss in the year to March 2015,” she adds.
“Western Australia also recorded slower growth. In the past two years, net
overseas migration to the state has dropped by 71 per cent, while net
interstate migration has dropped to the point where the state has seen a net
interstate loss.
This has not been seen in over 10 years in this state.
“Victoria and Queensland were the only states recording a net gain from
interstate migration,” Carlton says.
Australia’s population grew by 316,000 people (1.4 per cent) to reach 23.7
million by the end of March 2015.
Net overseas migration contributed 173,100 people to the population, which is a
rather worrying 16 per cent lower than the previous year, and accounted for 55
per cent of Australia’s total population growth.
Victoria continues to have the fastest population growth rate in the country,
growing by 1.7 per cent (97,500 people).
Over the year, natural increase contributed 142,900 people to Australia’s
population, made up of 298,400 births (3 per cent lower than the previous year)
and 155,500 deaths (4 per cent higher than the previous year).
You can see the latest demography
video here.
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Capital city average home price exceeds $600,000
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Capital city average home price exceeds $600,000
Posted on Wednesday, September 23 2015 at 4:23 PM
You’ll need more in your budget if buying in the nation’s capitals according to Australian Bureau of Statistics (ABS) data – and you can thank our two largest cities.
The
average price for a home in Australia’s capital cities rose 9.8 per cent across
the board over the last year, reaching $604,700.
The
ABS numbers reveal property prices in our eight major cities rose 4.7 per cent
over the three months to the end of June.
In
dollar terms, the figure is up $26,000 in the June quarter 2015.
Sydney
saw prices surge 8.9 per cent in the June quarter, with a rise of 18.9 per cent
over the 2014/15 financial year.
Melbourne
won silver with price growth of 4.2 per cent in the latest quarter, and an
annual rise of 7.8 per cent.
Beyond
the two big capitals, price gains were relatively flat, with all other cities
having less than one per cent gain over the quarter, and less than three per
cent for the year.
Perth
and Darwin actually recorded annual price retractions of 1.2 per cent and 1.8
per cent respectively.
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