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As competition in the home loan market continues to heat up, NAB has cranked things up a notch. The bank’s move this week to slash variable rates for investors has made its offer the best among the big four.The interest rate for the NAB Base Variable Rate Home Loan now sits at 3.09% (3.09% comparison rate*) for investors with a loan-to-value ratio (LVR) of 80% or less and making principal and interest repayments. For context, LVR refers to the percentage of property value you’re borrowing from the bank. So if you’ve saved up a 20% deposit, then your LVR would be 80%.NAB’s five-basis point cut places it just ahead of ANZ’s rate of 3.12% (3.16% comparison rate*), available on its Simplicity PLUS home loan for investors with a maximum LVR of 80%. NAB’s latest rate reduction also further widens its gap with Westpac and Commonwealth Bank:
Finding upsides in the Covid crisis can be a tough ask, but a silver lining has emerged for Australian home borrowers that is cause for at least some celebration: home loan rates have dropped significantly since the pandemic hit Australia. Lenders passed through much of the RBA’s March rate relief, and have continued to cut rates in the months since as they battle it out to attract new borrowers.
Changes to home loan interest rates may be slowing but competition among lenders is alive and well with averages continuing to fall and some of the sharpest offers ever seen hitting the market in recent weeks.
Lenders have been cutting rates left and right for months now, but it’s still rare for a home loan to offer headline rates below the 2.00% mark. Recently, online lender Homestar came out with a new offer that sees it joining this exclusive club.
The dual shock of the coronavirus pandemic and the economic downturn has left industries reeling and the government scrambling to keep everyone afloat. But in typical Australian fashion, interest in the property market has hardly waned. Right now, there are a few big questions on everyone’s mind. Are property prices going to drop? Can interest rates get any lower? What will happen when the government support is finally tapered off? While there’s a fair share of uncertainty underpinning all that’s going on at the moment, a few trends have emerged which give us some sense of where the property market is heading. We’ve compiled a few need-to-knows below.
Buying your first home may be a huge milestone, but chances are you’ll eventually wave goodbye to that two-bedroom apartment or townhouse and move elsewhere. That could be due to a number of reasons, whether it’s needing more space to raise your kids or looking for a change in scenery. However excited you may be to hunt for your next home, that’s not the only big decision you'll have to make. You’ll also need to figure out what to do with your existing home: Will you sell or keep it as a rental property?The answer isn’t always straightforward, as there are pitfalls to watch out for. Mortgage broker from Two Red Shoes, Rebecca Jarrett-Dalton says one mistake is letting your emotions drive your decision - growing so attached to the property that you aren’t willing to let it go.“[Your decision] has got to be affordable and make sense. What you don’t want to do is cripple yourself that you can’t afford your new lifestyle,” she says. Instead she recommends crunching the numbers and consulting experts, such as a mortgage broker and an accountant, before locking in your final decision. The bottom line is, how much is your choice going to cost you and can you afford it? To determine whether selling or renting out is more financially viable for you, here are five key factors to consider.
Despite plenty of headwinds and a high volume of homes withdrawn from auction, activity in the property market is holding up across a number of capital cities, according to recent data from CoreLogic.As many as 1,344 homes in capital cities were taken to auction during the week ending 26 July, with preliminary clearance rates coming in at 59%. This was similar to the previous week’s result, which was later revised down to 53%.In Sydney, 602 homes were taken to auction, returning a preliminary clearance rate of 68.3%. This marks an improvement from the previous week, when a total of 515 auctions returned a final clearance rate of 61.4%.Canberra saw the highest preliminary clearance rates, with 80.5% of properties successfully sold at auction. Meanwhile, 60.7% of properties were cleared in Adelaide, 43.9% in Brisbane, and 28.6% in Perth.With plenty of challenges currently plaguing the Melbourne market, Corelogic expects the final clearance rate for the week to settle around 50%.
The situation for renters across Australia continues to ease, with new data from CoreLogic showing rents steadily declining. According to the property research firm, national rent values fell 0.3% in June, and 0.5% over the June quarter. CoreLogic notes this was the largest quarterly decrease in rents since September 2018, and the downward trend is likely to continue in the coming months.Capital cities saw the greatest declines, with rents dropping 0.7% over the June quarter. In comparison, rents across regional Australia have been remarkably resilient, increasing by 0.2% over the same period.“Closed international borders created a significant shock to rental demand, as historically the majority of new migrants to Australia have been renters,” said Eliza Owen, head of research Australia at CoreLogic.“Furthermore, job losses in sectors such as hospitality, tourism and the arts, which ABS payroll data estimates has been around 20%, have also impacted demand, because households in these sectors are more likely to rent than in other industries.”Before the coronavirus pandemic struck, growth in the rental market was fairly subdued, with national rents lifting just 1.1% in the five years to June 2020. This has been good news for renters but unwelcome news for property owners.While there were faint signs that rents would rebound earlier in the year - after a decline in investor participation saw the supply of new rental properties taper off - the coronavirus pandemic has tilted the playing field decidedly in tenants’ favour.Among major markets, Hobart recorded the steepest drop in rental values, with median rents falling by 2.3%. Sydney saw the second largest decline at 1.3%.Asking rents have also pulled back slightly as owners try to attract tenants. In Sydney, estimated median asking rents decreased by 1.6% to $568 per week. Canberra asking rents, which fell by 1.7%, currently sit at $566.In third place, Hobart has a median asking price of $454 a week, followed by Melbourne at $453, Darwin at $442, Brisbane at $439, Adelaide at $397, and Perth at $396.For more information on property and lending trends, visit our home loan news hub. And if you’ve got your sights set on buying, browse our home loan comparison page, or check out the selection below.
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