Property ranked as 'best investment option right now' by experts: survey

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You’ve heard the saying ‘safe as houses’, right? Well, it seems that old adage may ring true even in the current pandemic, with many of the nation’s top economic experts saying that’s where they’d put their money right now.

A Finder survey asked 28 leading experts and economists to weigh in on future cash rate moves and other issues related to the state of the Australian economy.

When asked: “Where do you think is the best place to invest your money right now?”, the leading response was “property”, with 1 in 3 experts (32%) backing it as their top option.

This was followed by shares (21%), gold (14%), superannuation (11%) and then cash (7%).

But hang on, isn’t the property market meant to be in trouble?

Rest assured it’s not all doom and gloom out there.

According to CoreLogic’s latest data, nationwide median housing values fell just 0.6% in July and fell 1.6% for the quarter, bringing the median dwelling value to $552,912.

However, to put that into context, over the past year national housing values have risen by 7.1%.

Sydney property prices led the way with a 12.1% increase in median value, followed by Melbourne (8.7%), Canberra (7.2%), Hobart (5.9%), Brisbane (3.8%) and Adelaide (2.4%).

Perth (-2.5%) and Darwin (-2.2%) were the only capital cities to record negative growth in housing values over the past 12 months.

Tim Lawless, CoreLogic’s head of research, said housing markets have remained relatively resilient through the COVID-19 period so far.

“The impact from COVID-19 on housing values has been orderly to-date,” says Lawless.

“Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn.”

However, with fiscal support set to taper from October, and repayment holidays expiring at the end of March next year, Lawless says the medium-term outlook remains skewed to the downside.

“Urgent sales are likely to become more common as we approach these milestones, which will test the market’s resilience,” adds Lawless.

Other interesting property market predictions

Here are a few other interesting stats and predictions we took out of the Finder survey:

– Almost half of experts (42%) believe now is a good time for homeowners to put their property on the market, while a quarter said homeowners should wait two years.

– Two-thirds of surveyed experts (65%) believe Australia will see GDP growth in 2020, despite the Treasurer confirming in June that the nation is now in recession.

– All experts believe no further cash rate cuts will be implemented this year. However, more than two-thirds (72%) of experts forecast an increase in 2021 or 2022.

– More than half of experts surveyed (58%) believe other banks will follow in St George’s footsteps to reduce lenders mortgage insurance (LMI) to $1 for first home buyers with a deposit of just 15%.

Seen a property you like? Get in touch

As mentioned earlier, it’s expected that properties priced for a quick sale will hit the market in the coming months – properties that may prove difficult for some buyers to resist.

So whether you’re looking to add to your property portfolio, looking for a change of scene, or keen to buy your first home and break into the market, get in touch today.

We’re here to help you find a loan that’s just right for you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

$1 lenders mortgage insurance for eligible first home buyers

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You’ve probably heard something along the lines of ‘you need a 20% deposit to buy a home’, right? Well, not necessarily. Today we’ll look at two options available to eligible first home buyers, including a $1 lenders mortgage insurance offer that’s just been launched.

Now, to be fair, that 20% deposit figure quoted by your uncle Barry wasn’t plucked out of thin air. Barry’s just a little behind the times (as a scroll through his Facebook feed would attest).

Let us explain.

In the past, first home buyers typically had to save a 20% deposit to avoid paying lenders mortgage insurance, otherwise known as LMI.

Now, this insurance isn’t to protect you. LMI is to protect the bank against any loss they may incur if you’re unable to repay your loan (because they see first home buyers with less than a 20% deposit as higher risk).

The problem is that LMI isn’t cheap. For example, if you wanted to purchase a $600,000 property, but only had a 15% deposit ($90,0000), you’d likely have to pay about $6000 in LMI.

But since the start of the year, two options to avoid paying thousands of dollars in LMI have emerged for eligible first home buyers: the first being the federal government’s First Home Loan Deposit Scheme (FHLDS), and more recently, St George’s $1 LMI offer.

Let’s start with St George’s $1 LMI announcement

Basically, LMI will be reduced to only $1 for eligible first home buyers with a Loan to Value Ratio (LVR) up to 85%.

In other words, it’s for first home buyers who have a deposit between 15% and 20%.

Here are a few other important eligibility details:

– The LMI purchase must be for your first home loan and for your first property (however for joint applications, only one applicant must be a first home buyer).
– You must be the owner-occupier of the property and make principal and interest repayments.
– The offer is available on loans up to $850,000 (with a 15% deposit, this equates to a $1 million property value, which is much higher than the FHLDS below).
– Only one property can be financed per application.
– There are no income caps.

The first home loan deposit scheme

The federal government’s scheme allows eligible first home buyers with only a 5% deposit to purchase a property without paying for LMI – which can save you up to $10,000. ⁣⁣

⁣⁣But here’s the catch: only 10,000 spots are available this financial year.

⁣⁣That might sound like a lot but 3,000 spots went in the first 10 days last time.

There are a few other important eligibility details to consider here, too, including:

– Property price caps for different cities and regions across the country (ranging between $400,000 to $700,000 in capital cities).
– Income caps (singles $125,000, couples $200,000).
– For couples, both need to be eligible home buyers.

Get in touch

We understand that buying your first home can be daunting.

But the good news is that we help first home buyers apply for finance on a weekly basis, and we pride ourselves on being there for our clients to guide them through the process.

So if you’d like to find out more about one of the LMI offers above, then please get in touch – we’re more than happy to explain them to you in more detail.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Loan deferrals to be extended for customers who need extra breathing space

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Home and business owners struggling financially due to COVID-19 will be given another four months to resume paying back their loans.

Extended loan deferrals will be provided to those who genuinely need more than the current six-month timeframe, says the Australian Banking Association (ABA), however, extensions won’t be automatic.

While each bank’s deferral policy differs, it’s important to note that deferring repayments on your loan generally doesn’t stop interest from accruing.

As such, customers who are able to repay their loans will resume doing so, says the ABA, adding that it’s in their best interests to do so and allows banks to direct support to those who need it.

800,000 people have deferred their loan repayments so far during the COVID-19 crisis and the four-month extension aims to help the economy avoid the September ‘cliff’ that you’ve probably heard about.

How do you apply for a home loan deferral extension?

The good news is you won’t have to. If repayments on your home or business loan have already been deferred then your bank will contact you when the end of your six-month deferral period nears.

That’s because they’ll first want to discuss some possible options to restructure or vary your loan, including:

– extending the length of the loan
– switching to interest-only payments for a period of time
– consolidating debt
– a combination of these and other measures.

If you’re financially unable to enter into one of the above arrangements by the end of your six-month deferral period, you’ll be eligible to extend your deferral for up to four months.

Will your credit rating be affected?

Good news. If you recommence repayments on your existing loan or enter into a new repayment arrangement, your credit report will not be impacted, provided you meet the new repayment arrangements.

The same goes for if you’re granted an extended deferral period that’s approved by your bank: your credit report will not be impacted.

Want to find out more? Get in touch

If you’d like more information about the repayment deferral extension, or to discuss some possible options for restructuring or varying your loan before the bank puts you on the spot, then please don’t hesitate to get in touch.

We’re here to help you through these difficult times any way we can.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Why you should care about the new ‘Open Banking’ era

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‘Open Banking’ is now officially upon us. But what does that mean and why should you care? Well, in a nutshell, it’ll be easier and quicker for you to get a better deal on banking products going forward.

With all that’s going on in the world right now, it’s been interesting to see one of the nation’s biggest banking overhauls in recent memory slip a little under the radar.

Legislation came into effect on July 1 that’ll make it easier and more convenient for you to switch banks when you’ve found a better deal on a financial product.

It’s called ‘Open Banking’, and it will allow you to easily share your banking data with your bank’s competitors in order to access more personalised and competitive financial products and services.

Now, on the face of it, this can sound a little off-putting. After all, it’s being drummed into us to protect our data as much as possible these days.

But the good news is that Open Banking keeps the power in your hands: you can choose who to securely share your data with, and when.

How Open Banking changes the current system

Nowadays, most of the transactions you make are done so online.

For example, you likely get paid electronically, you pay your bills online, and you buy most things using a debit or credit card that’s recorded by your bank online.

Now, every time one of those transactions takes place it creates data.

This data is then collected by your bank, stored, and used to understand you better and create products and services that you might like.

This kind of insight gives your bank the inside lane when it comes to securing you as a customer.

Now, let’s say another financial institution offering a financial product, such as a home loan, catches your interest.

This financial institution likely knows very little, if anything, about you.

To find out more about you, and what they can offer you, you’d need to complete quite a bit of paperwork work them.

That includes detailed information on what you earn, what you owe, what you spend, and where you spend it – it can be pretty darn time-consuming.

But imagine if all you had to do is give that new financial institution permission to access the data your current bank already has.

Well, that’s Open Banking. It gives you the power to control who you securely share your data with and how it can be used.

Rolling it out in stages

The Open Banking system will start small but will ramp up over time.

At present, all four major banks are now capable of sharing your data – if you request it – while smaller financial institutions will join over the coming year.

At this stage, however, you can only request that your bank share your deposit and transaction account data, as well as your credit and debit card data, to financial institutions that the ACCC have authorised to receive it.

From November 1 you’ll also be able to share data relating to home loans, investment loans, personal loans and joint accounts.

“This gives consumers control over information banks already collect about them,” explains ACCC Commissioner Sarah Court said.

“Importantly, it allows consumers to share that data with other businesses, such as fintechs, that may be able to provide them more personalised services and competitive offers.”

By the end of the year, the ACCC anticipates there will be dozens of financial companies accredited – meaning more companies battling it out to provide you with the best deal they can.

For open broking, get in touch

Now, it’s important to note that you don’t have to wait until Open Banking is in full swing before checking whether you can apply for a better deal on your home loan.

As you know, we’re always here to take the legwork out of the process for you.

So if you’re overdue for a home loan health check then get in touch today – we’d love to help you out!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Best Aussie suburbs to find a "renovator's dream"

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Most of us have at one time dreamed of discovering a hidden little gem and renovating it into the most enviable house on the street. With the $25,000 HomeBuilder grant, those dreams are closer to becoming a reality for many. But where to look?

Well, recent realestate.com.au data might have revealed the answer.

They’ve analysed all the listings in their database for keywords such as “renovate”, “renovation” and “STCA” (subject to council approval), and then ranked each suburb on the percentage of properties containing those keywords.

So with the federal government’s HomeBuilder scheme providing eligible homeowners a $25,000 grant to substantially renovate their homes, the below suburbs could be a good starting point for your search.

The top five “renovator’s dream” suburbs in each state

NSW: Lethbridge Park 2770 (70%), North St Marys 2760 (67%), Hebersham 2770 (64%), Oakhurst 2761 (62%), Kandos 2848 (59%).

VIC: Frankston North 3200 (70%), Mount Dandenong 3767 (50%), Canterbury 3126 (47%), Ivanhoe East 3079 (45%), Doveton 3177 (44%).

QLD: Sadliers Crossing 4305 (58%), Petrie Terrace 4000 (53%), Newtown 4305 (50%), Herston 4006 (50%), Grange 4051 (47%).

WA: Glen Forrest 6071 (50%), Northcliffe 6262 (47%), North Lake 6163 (42%), Greenmount 6056 (41%), Greenwood 6024 (40%).

SA: Angaston 5353 (50%), Happy Valley 5159 (50%), Hawthorndene 5051 (42%), Aberfoyle Park 5159 (41%), Panorama 5041 (40%).

TAS: Battery Point 7004 (50%), Triabunna 7190 (46%), Moonah 7009 (46%), West Moonah 7009 (38%), Dynnyrne 7005 (36%).

ACT: Wanniassa 2903 (46%), Farrer 2607 (42%),  Evatt 2617 (40%), Curtin 2605 (37%), Mawson 2607 (32%).

NT: Driver NT 0830 (39%), Woodroffe 0830 (38%), Fannie Bay 0820 (33%), Rapid Creek 0810 (32%), Moulden 0830 (31%).

Keen to turn your reno dream into a reality?

Day-dreaming about renovating is one thing; financing it and actually making it happen is another. Fortunately, that’s where we can help out.

So if you’d like help obtaining finance to pay for that reno project you’ve got your eye on, get in touch with us today – we’re here to help make your reno dream a reality.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.