Despite plenty of headwinds and a high volume of homes withdrawn from auction, activity in the property market is holding up across a number of capital cities, according to recent data from CoreLogic.As many as 1,344 homes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.
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.
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.
The coronavirus pandemic and ensuing economic downturn have been threatening to topple housing prices for months now. While the property market has proven to be quite resilient so far, new research from Domain suggests the cracks are beginning to show. According to the report, Australian house prices fell by 2% and unit prices by 2.2% over the June quarter, the first quarter to show the impact of COVID-19. All capital cities saw drops in unit prices, while house prices fell everywhere except Adelaide, Canberra and Hobart.Domain Senior Research Analyst, Dr Nicola Powell said improved affordability, along with the rollout of a number of government incentives, has seen buyer interest recover after falling off a cliff in April. “The outlook for residential property has improved vastly in recent weeks. Sentiment towards housing and the purchase of a home has bucked the overall more negative sentiment around the broader economy,” she said.
Popular online lenders loans.com.au and UBank are the latest to join the July home loan rate cut party, in a frenzy that's showing no signs of stopping despite the fact that home loan rates are now hitting uncharted territory of under 2.00%.
Mozo research shows that more than a quarter of workers currently relying on JobKeeper and JobSeeker won’t be able to afford their rent or home loan repayments if the government support ceases. This amounts to approximately 1.3 million Australians potentially unable to keep a roof over their heads.This analysis comes after the government announced changes to Covid-19 support payments on Tuesday. While JobKeeper and JobSeeker have been extended beyond the planned September end date, both will see a reduction in the coming financial quarter, and eligibility criteria will change for the Coronavirus supplement.Around 3.5 million workers are receiving JobKeeker payments and 1.6 million are relying on JobSeeker. This means approximately 42% of Australia’s 12.1 million-person workforce is being supported via these government schemes.Mozo’s data showed the vast majority of these people (92%) require this support to remain financially stable. In addition to the worrying housing situation, a third of surveyed income support recipients said they would not be able to afford to pay their bills if the payments stopped, with a fifth also unable to cover the cost of groceries.According to the Australian Bureau of Statistics (ABS), unemployment has reached a 22-year high of 7.4%, with 992,000 people recorded as officially out of work. “With the jobs market on life support, JobKeeper and JobSeeker payments are critical in ensuring people can remain in their homes and have enough money to cover necessary expenses,” Mozo Director Kirsty Lamont said.
BOQ Group, which includes Virgin Money, will be revising its debt-to-income (DTI) policy for home loan applications, amid concerns that a growing number of borrowers will be unable to service large loans.Mortgage applications with a DTI ratio of above six, that is, more than six times the borrower or borrowers’ annual income, will now be subjected to greater scrutiny and must be accompanied by detailed supporting notes.The bank will also introduce a minimum nominal rental figure of $650 per month in its serviceability requirements for all home loan applications, effective 20 July.BOQ is the latest in a growing list of banks that have tightened lending criteria. Last week, ANZ informed brokers that it may be turning down loans with a DTI ratio of more than seven, beginning 3 August.Teachers Mutual Bank also reconsidered its appetite for risk earlier this month, lowering its DTI threshold from a maximum of eight to seven, and ceasing lending for off-the-plan property purchases.Since March, banks have made a number of changes in response to growing credit quality risks, including requesting more proof of income, withdrawing lenders mortgage insurance waivers, and denying loans to workers in vulnerable industries.Self-employed applicants and those who are employed on a casual or contract basis may have also found it’s much more difficult to secure a loan or get approved for the amount they want.RELATED: Could tougher lending rules shut out first home buyers?All this has tempered the enthusiasm many first homebuyers (and anyone else with sights on the property market) may have felt at the news of potential dips in housing prices. But according to Mozo’s property expert Steve Jovcevski there are workarounds.“First homebuyers will have to become more disciplined in their savings habits. In a situation where people are being encouraged to stay at home, make the most of it by spending as little as possible and saving as much of a deposit as you can,” he said.“Lenders will be looking at your spending patterns in the three months before you apply for a home loan, so the less you spend, the greater your serviceability will be.”He also recommends being mindful of your credit score. Making too many credit applications can signal to lenders that you're reckless with your finances, which could jeopardise your chances at securing a loan.“Don’t apply for credit cards or personal loans, and even when you’re looking for a home loan, avoid making inquiries with too many lenders. Do your research upfront and only apply to a few once you’ve narrowed down your search,” Jovcevski said.For an overview of home loans currently available, visit or home loans comparison page, or browse the selection below.
Times may be tough, but first home buyers aren’t giving up on their property ownership dream just yet. New research shows that over half of these Australians plan to make a purchase in the next 12 months.ME’s latest Quarterly Property Sentiment Report released today found 51% of first home buyers want to have joined the property market by mid next year, up from 42% last quarter. And they’re the most eager of the bunch, with the report revealing that, by contrast, only 39% of investors and 22% of owner-occupiers share those same intentions.Among first home buyers, the vast majority are looking to get their foot in the door by taking advantage of property price drops due to COVID-19. In fact, 82% of first home buyer respondents said they’re keeping their eyes peeled for bargain properties for sale, compared to 66% of investors and 57% of owner- occupiers.These findings are based on surveys with 1,000 Australian homebuyers in June, when COVID-19 restrictions first began to ease across most states and territories. ME’s general manager of home loans, Andrew Bartolo said the surge in first home buyer enthusiasm could be due to a number of factors.“First home buyers may be looking to find the silver lining in the current economic climate, thanks to greater potential for property price falls, record low interest rates and government support,” he said.
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