Home Loan News and Information

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Double digit growth for housing in 2009

Monday, 04 January 2010

Australian home values have delivered double digit growth in 2009, according to figures from RP Data.

House prices rose by 1.1 per cent in November 2009, for a cumulative growth of 11.3 per cent in the first 11 months of last year.

Extraordinary house prices in Sydney and Melbourne led to the unprecedented recovery.

Over the year, Melbourne was Australia’s best performing capital city outside of Darwin, generating capital gains of 17.0 per cent.

In Sydney, home values increased by more than 1 per cent per month with cumulative growth sitting at 11.6 per cent.

Rismark International managing director Christopher Joye said the housing market had surprised many forecasters who were predicting substantial property price falls throughout 2009.

“The inability of most analysts to get close to divining Australia’s housing market trajectory during the GFC and in the recovery since, combined with the many misconceptions one typically hears about housing, illustrates just how poorly understood the sector is,” Mr Joye said.

According to Mr Joye, first home buyers contributed to the strong results in the first half of 2009, while up graders and investors accounted for the strong activity in the latter half of the year.

“First home buyers have been trending down since peaking in May 09 and the gap is being filled by up graders and investors who are much less sensitive to rate rises and the level of stimulus. We expect this trend to continue in 2010.”

However, most analysts are predicting that house price growth will taper back to more modest single digit levels in 2010.

RP Data’s research director Tim Lawless said value growth in Australia’s residential sector is likely to be more subdued this year.

“Looking forward we could expect market conditions to moderate into 2010 as interest rates continue to move back to a neutral setting and the remainder of the government stimulus is rolled back. The primary driver of growth will continue to be an under supply of housing coupled with extraordinary housing demand fuelled by population growth,” Mr Lawless said.

Lending for New Homes Soars

Thursday, 10 December 2009

NAB Challenges other Majors

Friday, 04 December 2009

NAB has thrown down the gauntlet to the other two majors, after raising its variable mortgage rate by just 25 basis points – in line with the Reserve Bank.

The bold move from NAB flies in the face of some other majors who have been citing higher funding costs as a driver for moving their rates above the official cash rate.

Westpac was the first bank to move after the RBA announcement, upping its standard variable rate by 45 basis points.

From today, NAB customers will pay a standard variable rate of 6.49 per cent compared to Westpac’s 6.76 per cent, which equates to a saving of $51 per month on a $300,000 mortgage.

NAB’s decision to raise rates by the same amount as the Reserve Bank has opened up the biggest mortgage rate gap between the majors on record.

Lisa Gray, group executive NAB personal banking, said the last time there was such a wide gap between the majors was “decades ago.”

“We are determined to be competitive, to offer our customers a better deal and attract new customers to NAB. Today we are sending a message to customers at Westpac, and the other banks, that NAB can offer them a better deal,” Ms Gray said.

“NAB has offered the cheapest standard variable interest rate amongst the major banks for the past six months and the new rate of 6.49 per cent p.a. is likely to remain unbeaten amongst the major banks.

“We have been very considered with this announcement given funding costs and the cost of raising deposits continues to fluctuate and is expected to increase further. However we believe that improving our reputation and relationships with our customers and the community is core to the long term sustainability and success of our business.”

Buyers Confused about FHOG Boost

Monday, 23 November 2009 

Confusion surrounding the end of the first home owners boost could be taking heat away from the first home buyer markets in NSW and the ACT, Raine & Horne has claimed.

Raine & Horne chief executive officer Angus Raine said there is evidence some buyers are confusing the boost, which will end on 31 December with the FHOG that is set to continue in 2010.

The boost subsidy currently provides first time buyers with an additional $3,500 for existing homes and an extra $7,000 for new homes.

“In addition the NSW Government’s decision to extend the $3,000 New Home Buyers Supplement to 30 June 2010 is also adding to buyer confusion,” Mr Raine said.

“The Federal Government was very good at creating the initial hype. However it has failed to fully educate the consumer about when the FHOB ends.”

“However January 1 does not represent the end of Federal Government subsidies for first time buyers.

“The $7000 FHOG will still be available to eligible applicants.”

Many of these who aren’t ready to buy yet even with the additional boost are concerned they’ll miss out completely.

By referring to the table you will see that there is still grant monies available for eligible purchasers.

Australians Keen to Invest in Property Market

Tuesday, 17 November 2009

More than 70 per cent of Australians over the age of 25 believe the time is ripe for property investment.

According to Citibank’s Australian wealth survey, 74 per cent think now is a good time to invest in property, while 40 per cent believe it is a bad time to invest in shares.

Citibank’s Andrew de Graaff said Australians were beginning to see property as relatively risk free.

“While a lot of people are saying now is a good time to buy and invest, it is another thing to actually do it,” he said.

Australia's property prices have held relatively firm while overseas markets, particularly in the US and Britain, plunged.

Melbourne's median house price fell just 1.8 per cent to $441,900 last financial year.

Subdued Market Activity Ahead: RP Data

 Friday, 13 November 2009

Market activity is expected to settle as the festive season approaches, RP Data’s head of property research Tim Lawless has claimed.

According to Mr Lawless, the seasonality of the market is most felt from the second week of December through to the third or fourth week of January.

Advertising tends to slow down at this time, as does buyer activity.

“For those looking to buy, the festive season is a time when there is reduced competition in the market, so potentially this may be a good time to seek out a property and make an offer,” Mr Lawless told Mortgage Business.

“Prices are likely to continue rising over the first quarter of 2010, albeit at more modest levels than recorded over 2009. Over the first nine months of the year values were up 8.1 per cent, however the month of September saw price growth flatten.”

Mr Lawless said the key markets are likely to be the premium suburbs where prices fell the most during 2008 and are now showing a rebound on the back of improved business conditions and equity market performance.