Thought about buying an EV? Interest rates for them are dropping

It wasn’t long ago that the idea of buying an electric vehicle (EV) seemed like a bit of futuristic science-fiction. But with interest rates on EV loans recently dropping to under 3%, going electric is now more in the realms of an everyday, mundane, household budget decision.

According to the latest Electric Vehicle Council data, sales of plug-in EVs almost tripled in the past year – from 6,900 in 2020 to 20,665 in 2021.

That means EVs now account for 1.95% market share of new vehicles.

Now, that might not sound like a lot. But the federal government projects it to rise to 8% by 2025 and 30% by 2030.

And we’re seeing major lenders start to jostle for pole position in the EV market too.

Macquarie, for example, sent an email out this week promoting comparison rates on electric cars to homeowners from 2.99% p.a. (based on a loan of $30,000 and a term of five years).

“We’re proud to be the first Australian banking group to offer a specialised electric car-buying service that can help you make the transition to an electric car,” the Macquarie email reads.

So how does that rate compare to a normal car loan?

Ok, so let’s say you were also thinking of going with Macquarie to buy a standard vehicle with an internal combustion engine (ICE).

You’re looking at a comparison rate of anywhere between 6.48% and 7.15% for a new ICE vehicle, depending on the loan-to-value ratio.

That’s quite a big difference from the new EV rates.

What’s driving the increasing uptake of EVs?

Increasing model availability, decreasing vehicle cost, and growing awareness of the economic and environmental benefits of EVs are changing the way people think about their transport options, according to the Electric Vehicle Council.

Here’s a guide to what you can currently buy in Australia. One of the cheapest options currently available is the MG ZS EV, which is around $48,990.

Hyundai and Nissan also have options in the $53,000 to $55,000 range.

It’s also worth noting that governments are making big moves in this area too, with some state governments offering $3,000 rebates.

And earlier this month, the New South Wales government (for example) announced plans to build more than 1,000 fast-charging stations for EVs over four years.

Get in touch with us to purchase your next vehicle

As electric vehicles become more popular in Australia, it’s a safe bet that we’ll see more and more lenders get their elbows out to offer competitive rates in this space.

So if you’re thinking of buying a vehicle to last you the next 5 to 10 years, and are considering making the jump to an EV, get in touch and we can help you crunch the numbers on whether an electric vehicle loan is the right fit for you.

And if it’s not quite right just yet, well, we can help you out with a good ol’ fashioned ICE vehicle loan instead!

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.

Where are tradies most in demand at the moment?

Keen to tackle a renovation project in 2022? You might have noticed that tradies are hard to pin down at the moment. So if you live in one of the suburbs in this week’s article, you might want to get the ball rolling sooner rather than later…

If you’ve ever watched The Block, you’ll know that a good team of reliable tradies can be the difference between a home reno project running smoothly, and everything going to hell in a handbasket.

But where in the world are all the good tradies right now?

If you’ve tried to source one recently for your own reno project, you might’ve noticed that quotes are up, calls are going unanswered and unreturned, and wait times are through the (unfinished) roof.

Well, it turns out Australians have been spending record amounts on renovations, which in turn has led to a surge in tradie demand.

“Home renovations have boomed nationwide as more time spent at home combined with ultra-low loan rates, government grants and improved household savings became the perfect combination of factors to drive heightened demand for renovations,” explains PropTrack senior economist Eleanor Creagh.

So which Aussie suburbs have the highest demand for tradies?

Like most things in the world of property and finance, some areas are busier than others.

Below are the top ten most in-demand suburbs in each state, according to online tradie directory hipages, as well as the most in-demand suburbs across the country.

National: Point Cook (Vic), Berwick (Vic), Craigieburn (Vic), Frankston (Vic), Kellyville (NSW), Werribee (Vic), Tarneit (Vic), Blacktown (NSW), Baulkham Hills (NSW), Castle Hill (NSW).

NSW: Kellyville, Blacktown, Baulkham Hills, Castle Hill, Quakers Hill, Campbelltown, Sydney, Penrith, Schofields, Maroubra.

VIC: Point Cook, Berwick, Craigieburn, Frankston, Werribee, Tarneit, Melbourne, Truganina, Pakenham, Hoppers Crossing.

QLD: Buderim, Southport, Upper Coomera, Surfers Paradise, Robina, Coomera, Forest Lake, Brisbane, Helensvale, Springfield Lakes.

WA: Canning Vale, Baldivis, Mandurah, Dianella, Scarborough, Thornlie, Willetton, Perth, Morley, Armadale.

SA: Adelaide, Morphett Vale, Hallett Cove, Mount Barker, Paralowie, Golden Grove, Aberfoyle Park, Parafield Gardens, Prospect, Mawson Lakes.

ACT: Kambah, Canberra, Ngunnawal, Belconnen, Amaroo, Gordon, Wanniassa, Gungahlin, Banks, Casey.

TAS: Hobart, Devonport, Launceston, Glenorchy, Sandy Bay, Kingston, Howrah, Lenah Valley, Claremont, Bellerive.

NT: Alawa, Darwin, Anula, Archer, Bakewell, Bagot, Alice Springs, Darwin City, Palmerston, Durack.

Need reliable finance for your reno project?

With wait times for reliable tradies blowing out, and supply chain issues when it comes to materials like timber also causing disruptions, the last thing you need is more delays to your reno project due to finance complications.

And that’s where we come in.

Not only can we help you secure funding at a great rate, but we can also help you select a loan that allows flexibility for any unforeseen contingencies along the way.

So if you’d like to explore your reno finance options, get in touch today – we’d love to help you turn your 2022 reno dreams into 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.

Fixed rates on the rise, as CommBank tips a June cash rate hike

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Hold onto your hats, things are about to get a little bumpy. Economists from Australia’s biggest bank are predicting the Reserve Bank will raise the official cash rate as early as June – and we’re already seeing fixed interest rates increase significantly.

Commonwealth Bank (CBA) economists have brought forward their forecasted Reserve Bank of Australia (RBA) cash rate hike from August to June, making it the earliest prediction amongst the big four banks.

We’ll go into more detail on why CBA has brought forward their prediction below, but first something a little more concrete: we’ve definitely noticed fixed rates trending up in recent months.

Fixed rate hikes

For example, back in November, for a $700,000 loan at 80% loan-to-value ratio, a two-year fixed rate with one particular lender was 1.84%.

That rate has since gone up to 3.04% – a staggering increase.

While not every lender has increased fixed rates so significantly, we are seeing them go up across the board.

So if you have been umming and ahhing about fixing your rate lately, you’ll want to get in touch with us sooner rather than later.

Because while most lenders have recently reduced their variable rates to compensate a little, with news now that the cash rate is being tipped to increase mid-year, you can expect variable rates to increase with the cash rate.

So why has CBA brought forward their forecast to June?

Ok, so back to CBA’s June cash-rate hike prediction and why they’ve brought it forward from August.

In a nutshell, CBA senior economist Gareth Aird is anticipating inflation to be a lot stronger than the RBA is forecasting.

As a result, Mr Aird believes this will lead to a rise in the cash rate to 0.25% at the June board meeting (currently it’s at a record-low 0.1%).

“We are very comfortable with our expectation that the quarter-one 2022 underlying inflation data will be a lot stronger than the RBA’s forecast,” explains Mr Aird.

And here’s the thing: it’s not the only cash rate hike CBA is predicting the RBA will make over the next 12 months.

Mr Aird is expecting a further three rate increases over 2022 to take the cash rate to 1%, with another move to 1.25% in early 2023.

That’s five cash rate hikes over 12 months!

Get in touch today to explore your options

Believe it or not, there are more than 1 million mortgage holders out there who have never experienced a rate rise (the last RBA cash rate hike was in November 2010).

And if the CBA’s prediction of five rate hikes over the next 12 months proves right, then some households will be in for a bumpy ride as they face hundreds of dollars in extra mortgage repayments each month.

So if you’re keen to act before the RBA increases the official cash rate, get in touch with us today. We’d love to sit down with you and help you work through your options in advance.

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.

Flexibility emerges as a key priority for small business loans

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What’s most important to you when selecting a lender to provide finance for your small business right now? Well, Australian small business owners have put ‘flexibility’ when it comes to loan repayments right up there on their priority list.

And that should come as no surprise given the disruptive nature of the economy that most businesses have had to endure over the past two years.

In fact, research conducted by RFi Group, commissioned by small business lender Prospa, found one-third of SMEs (33%) would more likely choose a lender with more flexible repayment options when applying for funds over the next 12 months.

So what are flexible repayments?

Well, when respondents were given the opportunity to define flexible repayments, one key theme was prevalent: flexible timeframes.

Many SMEs associated flexible loan repayments with the ability to repay loans earlier, extend repayment periods, or make no repayments for a given time (ie. up to 8 weeks).

“Small businesses were required to adapt, shift, or pivot over the past two years,” explains Prospa national sales manager Roberto Sanz.

“Therefore, it is understandable that business owners are looking for flexibility to work through changing market conditions and make necessary adjustments to keep their business moving.”

Prospa’s research is in line with that of SME non-bank lender ScotPac, which found that cash flow was a top-three concern for business owners right now, with 81.5% of SMEs admitting it had them worried.

Want to explore your flexible finance options in 2022?

The SME lending space is an evolving one, with a surge of new lenders and products recently hitting the market.

And one key emerging trend is, yep, you guessed it: flexibility.

So if you’re an SME owner who might be in need of flexible funding, get in touch today. We’d love to help your business explore its options.

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 are houses becoming so much more expensive to build?

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Construction costs just rose at the fastest annual pace since 2005. So why is it getting so expensive to build your own home? Today we’ll look at the materials that are becoming more expensive and why all homeowners should take note – not just renovators and builders.

“Your grandpa built this place with his own two hands”, or so your dad used to boast.

So if Pop could do it with his trusty hammer, some nails, and a bit of hard yakka, why is it so expensive to build a home of your own these days? (Your own handiwork inadequacies aside…)

Well, for starters, national construction costs increased 7.3% in the 2021 calendar year alone, which was the highest annual growth rate since March 2005.

And the not-so-great news is that property market data company CoreLogic is expecting growth in residential construction costs to remain above average over the coming quarter as supply chain disruptions persist.

“There is a significant amount of residential construction work in the pipeline that has been approved but not yet completed,” explains CoreLogic research director Tim Lawless.

So what materials are getting more expensive and harder to source?

Data shows that cost increases are being driven primarily by timber (mostly structural timber).

In fact, in the final quarter of 2021, the value of select wood imports reached their highest level on record, says Housing Industry Association (HIA) economist Thomas Devitt.

“Timber is predominantly produced domestically but excess demand, such as in a boom year like 2022, is largely sourced from overseas markets,” says Mr Devitt.

Other segments of the market also remain volatile, with increasing pressure currently on metal costs.

“With some materials such as timber and metal products reportedly remaining in short supply, there is the possibility some residential projects will be delayed or run over budget,” adds Mr Lawless.

And with building approvals for detached housing recording their strongest year on record in 2021 (with 150,000 approvals), demand isn’t expected to slow down anytime soon.

“This boom is set to keep builders busy this year and into 2023,” adds Mr Devitt.

Mr Lawless says: “With such a large rise in construction costs over the year, we could see this translating into more expensive new homes and bigger renovation costs, ultimately placing additional upwards pressure on inflation.”

Why current homeowners should also take note

Higher construction costs are likely to add to affordability challenges in the established housing market, making it harder for homeowners to upgrade.

And CoreLogic Head of Insurance Solutions Matthew Walker warns that higher building costs mean homeowners and property investors should also review their insurance cover.

“In these times of rapidly rising home and construction costs, under insurance can quickly become a real threat to what is a most valuable asset,” says Mr Walker.

“It’s important that homeowners keep track of their sum insured and annually check that it is sufficient should the worst occur by using their insurer’s rebuild calculator or giving them a call.”

How to get the right kind of finance for a construction project

Finding the right kind of finance for a construction project can be tricky at the best of times – let alone when building supplies are becoming more expensive and wait times are blowing out due to supply constraints.

That’s why it’s important to team up with a professional like us when looking for a construction loan.

Not only can we help you secure a great rate, but we can also help you select a loan that allows flexibility for any unforeseen contingencies.

So if you’d like to explore your options for your next building or reno project, then get in touch today – we’d love to help you map out a plan for your 2022 building and property goals.

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.