Property sentiment, house prices, car insurance cost increase: This week’s best banking news

young family happy with growing property sentiment
  • Aussies feeling better about the property market, finds ME Bank 
  • New Corelogic numbers find that house prices have surpassed pre-Covid levels 
  • Despite COVID restriction, car insurance costs have increased by 2%
  • Savings rate cuts continue in 2021
  • More homeowners spending on renovations as a result of Homebuilder
  • Mozo’s Banking Roundup of January 2021 

All in this week’s best banking news recap: editor’s pick.

Property market sentiment grown to highest level since 2019, reveals ME Bank 

According to ME Bank’s latest Quarterly Property Sentiment Report Aussies are feeling more confident with the housing market.

The research found that things like potential further property value rises, increased market activity, low home loan interest rates and government initiatives all contribute to this rise in sentiment. 

In fact, 54% of those surveyed said they believed prices will go up, while only 7% were certain a market correction will occur. 

“While there are still many challenges such as unemployment and job insecurity, it’s promising to see how sentiment and market activity have rebounded,” said ME’s head of home loans and personal banking, Claudio Mazzarella.

“Government incentives such as HomeBuilder and record low interest rates have no doubt been large contributors to driving momentum across the market.”

Read full article:
Property market sentiment continues to rise, finds ME Bank for a full breakdown of all the stats. 

CoreLogic finds property values higher now than pre-COVID 

House prices bumped up by 1% over last month and have now surpassed pre-COVID levels, according to property researcher CoreLogic. 

It was revealed that every Aussie capital city recorded a rise in property values: the highest increase in Darwin (2.3%) and the lowest in Sydney and Melbourne (0.4%) over January. 

Plus, regional housing values also increased by more than double that of metropolitan areas due to more buyers flocking to these areas as a result of COVID-19. 

Read full article:
Property values have surpassed pre-Covid levels, says CoreLogic for more numbers on house pricing right now. 

Price of car insurance hikes up by 2% despite COVID restrictions

young man getting in car with car insurance

Recent Mozo data has found that the year-on-year cost of car insurance increased over 202, despite many Aussies using their cars less. 

The stats showed that the cost premiums on comprehensive car insurance policies rose by 2.15% on average. 

This was after an analysis of over 10,000 comprehensive care quotes and scenarios in 2019 and 2020.

In particular, younger drivers between the ages of 18-24 saw the greatest premium hike by 3.10% on average. Drivers from New South Wales and Victoria were also hit harder than those from other states with prices going up by over 3%.  

Read full article: Car insurance costs increase 2% despite COVID restrictions to find out where to get a car insurance discount. 

Rate cut trend continues for savings account in 2021

Over 2020, it was no good news for savers, and it’s looking like the beginning of 2021 is no different. 

Last year, the Reserve of Bank of Australia (RBA) cut its official cash rate three times which accelerated the ongoing decreases to savings account rates. The rate now sits at an historic low of 0.10%. 

Since the beginning of 2021, there have been 34 cuts to at-call savings rates on the Mozo database. That’s a total of 202 saving rate reductions overall since the RBA’s most recent rate drop in November. 

As a result, the current savings account average rate has dropped by 53 basis points from 0.97% to 0.43%. 

Read full article:
Savers receive fresh slap in the face as rate cut trend continues in 2021 for a deeper look into where savings rates sit now. 

Home renovation: Aussie spending surges on back of HomeBuilder

young couple doing a home renovation

Since the extension of the HomeBuilder scheme in November last year, more Aussies have started spending on home renovations. 

The HomeBuilder scheme currently hands out $15,000 cash grants (previous $25,000) to eligible homeowners to cover a build or renovation. According to government stats, 75,143 households applied to be part of the scheme as of 31 December 202 - almost double of what was predicted at first. 

Recent data from Buy Now Pay Later platform Zip shows that Aussie shoppers spend 33% more on installation and renovation over December. Similarly, trade services like carpenter, flooring, plumbing and more, saw an increase in spending by around 69%.   

In addition, spenders were forking out more on indoor furniture and homeware items (+42%) as well as landscaping (+58%) and gardening (+59%) too. 

Read full article:
Home renovation spending surges on back of HomeBuilder for more on how to fund your next home renovation. 

January 2021: Mozo’s Banking Roundup 

It has been a quiet start to the year for the banking industry, with minimal changes made across home loans, credit cards, personal loans, at-call deposits and term deposits. 

Here’s what happened (based on the Mozo database): 

  • Some lenders adjusted variable Home Loan rates but more focus remains on fixed rates with lenders dropping them to new lows. The lowest fixed rate on offer right now comes from a major bank subsidiary. 
  • Only a few changes were made to Credit Card offers last month and one card was withdrawn from the market.
  • Personal Loan providers made changes to fixed rates but no changes were made in the variable space. 
  • The cuts made to At Call Deposits have slowed. Most decreases have been made to ongoing bonus rates. 
  • 36 providers on the Mozo database made cuts to Term Deposit rates, and the average 1-year rate has fallen again. 

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