Just when we were starting to get used to home loan rates that start with a '2', Australia's challenger lenders are now rolling out home loan rates with a '1' in front, offering even more opportunities for savvy borrowers to compare and save.
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The Reserve Bank is unlikely to cut the cash rate when it meets on Tuesday, but lenders are forging ahead with a new round of home loan rate cuts in a veritable bonanza for borrowers. Variable and fixed home loan rates are dropping under 2.00% ahead of the RBA's decision, and there are some big savings on offer.
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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.
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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.
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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.
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Think the home loan market has cooled down? Not a chance. In fact, it’s hotter than ever with lenders falling over themselves to compete for Australians looking to refinance or take out a new loan.
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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%.
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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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The NSW government has announced that stamp duty will be temporarily eliminated for first home buyers purchasing newly-built homes, as the state looks to the residential construction sector to spearhead economic recovery.The changes will come into effect on 1 August 2020, and will raise the current stamp duty exemption threshold from $650,000 to $800,000 for first home buyers. Discounts will also be offered at a tapered rate on homes valued up to $1 million.Importantly, the exemption will only apply to purchases of newly-built homes, meaning those looking to buy existing houses and apartments will not be eligible. It will also be kept in place for 12 months.NSW Premier Gladys Berejiklian said the move will offer some much-needed support to the building sector, which faces a diminishing supply of work, and allow first home buyers to begin their property journey sooner."Thousands of people will see their bank balances benefit from this change - it will help get more keys into more front doors of more new homes," she said."It will also boost housing construction across NSW and support jobs in the building industry at a time when we need them more than ever before."It’s predicted that the changes will help up to 6,000 Australians. According to NSW Treasurer Dominic Perrottet, the increased threshold will spare first home buyers from having to pay up to $31,335 in stamp duty on a new $800,000 home.
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Bendigo Bank has cut rates for its Express Home Loan by up to 0.20%, bringing it down to 2.69% p.a. (2.86% p.a. comparison rate*) for owner occupiers and 3.04% p.a. (3.21% p.a. comparison rate*) for investors. The changes will see existing customers saving much more on their monthly repayments. For example, owner occupiers paying off a $400,000 loan over 30 years (P&I, LVR 80%) will be looking at savings in the range of $43 a month, or $516 over a year.
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