33 suburbs where buyers still have the upper hand over sellers

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Most of Australia may be a seller’s market right now, but there are still a few dozen suburbs around the country where there’s more housing stock available than in previous years. Today we’ll check out which 33 suburbs are still offering plenty of options for buyers.

One key factor that’s resulted in the current “seller’s market” across the majority of Australia is the low level of housing stock available for sale.

In the three months to May, CoreLogic estimates that around 164,000 dwelling transactions took place across Australia, while just 136,000 new properties were added to the market.

And as we all know, when demand outstrips supply, that naturally results in strong price increases.

So where do home buyers have more housing stock to choose from?

Rest assured some suburbs still have plenty of supply. CoreLogic has crunched the numbers and identified 33 suburbs across the country with listing volumes higher than the five-year average in May.

Some of them are famously trendy too, such as Fortitude Valley in Brisbane (pictured), Randwick in Sydney, and South Yarra in Melbourne.

Better yet, all 33 suburbs below have experienced less dwelling value growth over the past 12 months than their local region:

NSW: Macquarie Park (44 listings higher than 5-year May average), Lidcombe (33), Rockdale (30), Randwick (29), Westmead (25).

Victoria: Melbourne (140 listings higher than 5-year May average), South Yarra (73), Hawthorn (60), Carnegie (56), Port Melbourne (53).

Queensland: Fortitude Valley (15 listings higher than 5-year May average), Bowen Hills (10), Mulambin (8), South Townsville (7), Park Avenue (7).

WA: Nickol (10 listings higher than 5-year May average), Nedlands (9), Crawley (8), Baynton (6), Inglewood (5).

SA: Para Hills West (5 listings higher than 5-year May average), Bowden (4), Kilburn (4), Bedford Park (4), Everard Park (4).

ACT: Phillip (14 listings higher than 5-year May average), Latham (3), Dickson (3), Richardson (2), Higgins (2).

Tasmania: Hobart (4 listings higher than 5-year May average).

NT: The Gap (2 listings higher than 5-year May average), Wanguri (1).

Where would you like to buy?

Sure, understanding market trends and identifying outliers can help give you an advantage, but if you’ve got your heart set on somewhere else, they’re not the be-all and end-all.

Everyone has different preferences, purchasing power, circumstances and dreams, all of which will influence their “top suburb” in this hot market.

So if you’ve been researching a suburb and have an eye on your next property, get in touch today. We’d love to help you arrange finance for it.

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.

“Tide turning on interest rates”: CBA hikes fixed rates

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Australia’s biggest bank has hiked its three-year fixed rate for owner-occupiers in a further sign that “the tide is turning on interest rates”. So if you’ve been thinking about fixing your interest rate, it could be high time to do so.

Now, we’re not normally ones to write articles about the interest rate movements of particular products with particular lenders.

But we felt this one was significant given that the Commonwealth Bank (CBA) is the nation’s biggest home lender, with a market share of about 25%.

CBA has increased both its three- and four-year fixed rates for owner-occupiers paying principal and interest by 0.05%, as well as some interest-only loans by 0.10%.

“For anyone still on the fence about fixing their home loan rate, this is another example of the tide turning on interest rates,” Canstar research expert Mitch Watson says.

And we can’t say we weren’t warned.

In March, ANZ senior economist Felicity Emmett said fixed-mortgage rates had already reached their lowest point, or close to it, as lenders began lifting their four-year fixed rate products.

Furthermore, Canstar research shows 38% of lenders have increased at least one fixed rate over the past two months.

Why are fixed rates moving upwards if the RBA hasn’t lifted the cash rate?

The Reserve Bank of Australia (RBA) has repeatedly said the official cash rate isn’t likely to be increased until 2024 at the earliest.

But given that’s now within three years, the banks are beginning to adjust their three- to four-year fixed rates to head off those potential RBA rate hikes.

“The money market is already factoring in [RBA rate] rises,” explains AMP Capital chief economist Shane Oliver.

“That’s not having much of an impact on two-year rates yet. But as we go through the course of the year, the possibility of rate hikes will start to impact shorter rates as well.”

So what’s next?

Well, when CBA makes a move, it’s not uncommon for a number of other lenders to follow suit.

So if you’ve been umming and ahhing about fixing your rate, then it’s definitely worth getting in touch with us sooner rather than later.

We can run you through a number of different options, including fixing your interest rate for two, three, four or five years, or just fixing a part of your mortgage (but not all of it).

If you’d like to know more about this – or any of the other topics raised in this article – then get in touch today.

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.

SMEs to get full asset write-off extension and fairer go with ATO

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Small businesses in dispute with the ATO over their tax debt will get “a fairer go” under new rules proposed in the federal budget. Meanwhile, one-year extensions have been granted for the full asset write-off and loss carry-back schemes. Let’s break it all down.

There’s a lot to digest in this year’s pandemic-recovery federal budget.

So today we’ve chosen to focus on just a few key budget announcements we feel may help SMEs manage finance and debt in the years to come.

Temporary full asset write-off and loss carry-back extensions

Great news for small businesses keen to invest in their future: they can continue to write off the full value of assets purchased until 30 June 2023.

The popular scheme, called ‘temporary full expensing’, is an expanded version of the popular instant asset write-off scheme.

It allows businesses, both big and small, to immediately write off any eligible depreciable asset, at any cost, until 30 June 2023.

This can help improve your cash flow by allowing you to reinvest the funds back into your business sooner.

To complement this, the federal government’s ‘loss carry back’ provision has also been extended to 30 June 2023.

“This is a tax initiative that effectively allows a small business to carry back tax losses from 2022/23 income year to offset previously taxed profits as far back as 2018/19, to support business recovery,” explains Small Business Ombudsman Bruce Billson.

Third umpire to pause ATO debt recovery actions during disputes

Small businesses will soon be able to apply to the Administrative Appeals Tribunal (AAT) to pause or modify ATO debt recovery actions where the debt is being disputed.

“Small businesses disputing an ATO debt in the AAT will get a fairer go by stopping the ATO from relentlessly pushing on with debt recovery actions against a small business, while the case is being heard,” Mr Billson explains.

Currently, small businesses are only able to pause or modify ATO debt recovery actions through the court system, which can be expensive and time-consuming.

“Under the proposed changes, small businesses can save thousands of dollars in legal fees, not to mention up to two months waiting for a ruling,” adds Mr Billson.

The AAT will be able to pause or modify ATO debt recovery actions, such as garnishee notices, interest charges and other penalties until the dispute is resolved.

“It means that rather than spending time and money fighting in court, small business owners can get on with what they do best – running and growing their business,” says Mr Billson.

Get in touch for finance for your business

While it’s all well and good to have the AAT pause ATO debt recovery instead of the courts, the fact remains that many small businesses will still need to pay their ATO debt back.

So if the ATO is seeking a tax debt from your business, get in touch to discuss finance options for repaying them sooner, and giving you some breathing space.

And if we backtrack to the beginning of this article, being able to immediately write off assets is all well and good, but if you don’t have access to the funds to purchase them, the ‘temporary full expensing scheme’ won’t be of much use to you.

So if you’d like help obtaining finance to make the most of temporary full expensing for your business – whether it’s this financial year or next – reach out to us today.

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.

Single parents and first home buyers get big budget boost

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Single parents saving for a property and first home buyers are the big winners from this year’s federal budget. Today we’ll break down the three schemes that will help them crack the property market sooner.

In recent months there have been signs that first home buyers are beginning to shy away from the property market, as investors return in big numbers to take advantage of optimistic property market price outlooks.

So this year’s federal budget focussed on giving first home buyers and single parents a big leg up into the property market through three key schemes, which we’ve broken down for you below.

1. Single parents to purchase a home with a 2% deposit

Single parents hunting for a home will only need to save a 2% deposit to crack into the property market if they secure a place in the federal government’s new Family Home Guarantee scheme.

The scheme allows eligible single parents with dependants to borrow with a deposit under 20% without having to fork out for lenders mortgage insurance (LMI), as the government will guarantee up to 18% of the loan.

An initial 10,000 places will be available under the scheme, which will start on 1 July 2021 and run for four years.

Here’s a quick example of how it works.

Mary is a single parent with two young sons, Johnny and James. Mary has found the perfect home for $460,000 but has struggled to save enough for the usual $92,000 deposit (20%) while paying rent.

However, with the Family Home Guarantee, and on the success of her application with a lender, Mary could move into her dream home sooner, with just a $9,200 deposit (2%).

2. Buying or building your first home with a 5% deposit

Those hoping to build their first home with just a 5% deposit could soon do so thanks to an extension of the First Home Loan Deposit Scheme (FHLDS) for new builds.

The federal government has announced another 10,000 spots in the scheme will be available for new builds from July 1.

Those 10,000 spots are in addition to 10,000 places already allocated for existing home purchases under the scheme, which also become available from July 1.

So that’s 20,000 spots in total across new and existing builds!

The FHLDS allows eligible first home buyers to break into the property market sooner, as you only need a 5% deposit to purchase a property without paying for LMI.

This can save you anywhere between $4,000 and $40,000, depending on the property price and the deposit amount you’ve saved.

You can find out more about the FHLDS and eligibility requirements by getting in touch with us, or on the NHFIC website.

3. Saving a deposit by salary sacrificing in your Super account

The First Home Super Saver scheme will allow you to put up to $50,000 in voluntary superannuation contributions towards a first home deposit from 1 July 2022. Previously only $30,000 could be released for the purposes of buying a first home.

The increase will fast-track homeownership for first home buyers and the government says it recognises that deposits required for home purchases have increased over the years due to house price growth.

Here’s a quick example of how the scheme works.

Sue is an occupational therapist who earns $80,000 per year and wants to buy a new home.

Using salary sacrifice, she directs $12,500 of pre-tax income into her superannuation account each year.

After concessional contributions tax, her balance increases by $10,625. After four years, Sue is able to withdraw $45,226 of contributions and the deemed earnings on those contributions.

Withdrawal tax is applied at a concessional rate of 4.5%, which is Sue’s marginal tax rate minus a 30% tax offset. Sue now has $43,191 she can put towards buying her first home.

Sue’s partner, Rob, makes the same income and also salary sacrifices $12,500 annually to his superannuation fund over the same four years.

Combined, Sue and Rob have $86,382 to put towards their first home, which is $20,838 more than if they were to save in a standard savings account.

Prepare to apply

While the two LMI-related schemes will be available from July 1, it’s important to get ready to apply for them now.

In recent years the 10,000 spots in the FHLDS have been snatched up within a few months, and we’ve had more than a few hopeful applicants reach out to us when it’s too late.

So to help avoid disappointment, get in touch with us today and we can help you get everything in order prior to the schemes kicking off in the new financial year.

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.

Has the housing market’s latest record-breaking run peaked?

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Property prices climbed at a breathtaking pace in early 2021, which has been good news for homeowners and heartbreaking for house hunters. However, there are seven key signs that the pace of capital gains has peaked, says CoreLogic.

Now, it’s important to note that CoreLogic is not suggesting that housing values are about to dip.

Far from it.

Rather, CoreLogic believes the housing market is “moving through a peak rate of growth and the pace of capital gains will gradually taper over coming months”.

“Overall, we are expecting housing values to continue to rise throughout 2021 and most likely throughout 2022, just not at the unsustainable pace of growth that has been evident over recent months,” explains CoreLogic’s Head of Research Tim Lawless.

Below are the seven signs they’ve identified.

1. CoreLogic’s home value index indicates a slowdown

CoreLogic’s rolling four-week change in dwelling values shows Sydney’s rate of growth has dropped from 3.5% (in the four weeks leading up to 21 March) to 2.3% (in the four weeks to 21 April).

Meanwhile, Melbourne dropped from 2.5% to 1.5%, Brisbane from 2% to 1.8%, and Perth from 1.5% to 0.9%.

The only mainland state capital to record an increase was Adelaide, up 1.7% from 1.2%.

2. Auction clearance rates have dropped

Historically, there’s been a strong positive correlation between auction clearance rates and the pace of appreciation in housing values, says Mr Lawless.

Recently, however, there has been a slight softening in auction clearance results.

The weighted average clearance rate moved through a recent high of 83.1% in the last week of March, before dropping to 78.6% in the week ending 18 April.

3. Vendor activity has increased

There has been a considerable rise in new listings as vendors look to capitalise on the market’s strong selling conditions.

In the four weeks to 18 April as many as 26,470 capital city properties were added to the market, says CoreLogic.

“That’s the largest number of new listings for this time of the year since 2016 and 17% above the five-year average,” adds Mr Lawless.

4. Housing supply is on the rise

Thanks to HomeBuilder, there has been a significant lift in housing construction activity that will add to overall supply levels in the coming months.

Approvals for new dwelling construction are at record highs, points out CoreLogic, and dwelling commencements over the December quarter were almost 20% higher than a year earlier and 5.5% above the decade average.

5. Population growth has turned negative

Due to current tight border restrictions, it’s much harder to get into Australia than usual.

That’s led to a decline in population growth, which can also have an impact on housing demand (although it’s more likely to have a bigger impact on rental markets, as the majority of migrants rent before buying).

“Population growth, which is an important component of housing demand, has turned negative for the first time since 1916 due to closed borders and stalled overseas migration,” adds Mr Lawless.

6. Fewer government incentives and schemes available

You might have heard that applications for the HomeBuilder grant, which started off at $25,000 before being reduced to $15,000, have now closed.

On top of that, JobKeeper has also finished, and JobSeeker has been dialled back.

“Australia is moving into a new phase of the economic recovery where there is substantially less fiscal support which could result in a reduction of housing market activity,” says Mr Lawless.

7. Higher barriers for homebuyers looking to crack the market

Last but not least: the higher prices rise, the higher the entry barrier for home buyers.

And the higher the entry barrier, the fewer active house hunters there are, which means less demand to drive up prices.

“For those looking to enter the market, growth in housing values is substantially outpacing incomes, which means a growing deposit hurdle for first home buyers,” explains Mr Lawless.

Get in touch today for help overcoming these barriers

As you can see, there’s a case to be made that the rate of property price growth has peaked.

But Mr Lawless warns there are still a variety of factors that are likely to keep upward pressure on housing values for some time, including the record-low official cash rate, which the RBA says won’t lift “until 2024 at the earliest”.

So while prices are expected to continue to increase – and it might feel like you’re running on the spot – please know that potential solutions do exist for keen homebuyers.

For example, the federal government’s First Home Loan Deposit Scheme is due to accept another 10,000 applications in early July, allowing eligible first home buyers with only a 5% deposit to purchase a property without paying for lenders mortgage insurance (LMI).

For more information, give us a call – 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.