6 Christmas tips to help you save this silly season

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Most of us roll our eyes when we start seeing shopping centres spruik Christmas merchandise in November. While it’s important not to get caught up in the festivities too early, now’s actually a great time to start prepping to ensure a budget blow-out doesn’t derail your mortgage repayments over the silly season.

The best bit? By following some of the below tips, you can turn the retailers’ early mind games against them and save money instead!

1. Buy food ahead of time

Christmas time tends to lead to a lot of socialising. Even if you aren’t the one catering, requests to bring a plate can add up over time.

Make a point of keeping an eye out for food and drinks specials ahead of time and buy items like boxes of chocolates, long life snacks and drinks when they are on special. That will make it much easier to stretch the food budget over Christmas.

2. Opt for Secret Santas

For people who have a large family or friendship circle, Christmas can lead to a long list of presents to buy. Many people prefer not to get extra clutter for their kids, so suggest a Secret Santa arrangement instead of buying for every person.

This way you can put more thought into each gift as well as not creating more stress.

3. Homemade wrapping paper

If the end of term results in your kids bringing home sheets of artwork, why not recycle these and use them for wrapping paper for the extended family?

Not only does this mean that the kids get to see their artwork being passed on to loved ones, but it also saves you money on buying wrapping paper that will be in the bin by Christmas morning.

4. Shift the focus

Rather than dwelling on social media posts of the perfect Christmas morning with matching pyjamas, shift your focus to the true meaning of Christmas: helping others who are less fortunate.

For instance, instead of getting new books for Christmas Eve story time you could choose books from the library and make a donation to charity that helps literacy in at-need communities.

5. Keep a track of your spending

With a large percentage of Australians overspending at Christmas (and feeling guilty about it), it’s important to keep a budget for Christmas and any associated events – like holidays – over that time.

By following a budget, and starting now, you can spread out your spending – $200 a week over five weeks is much better than $1000 in the week before Christmas.

6. A final few tips

– Create a list of who you need to buy for and brainstorm present ideas before you go shopping.

– Make your own gifts.

– Buy online when sales specials are on. This can help you avoid pressure from sales staff and impulse purchases.

– If hosting a Christmas day event, organise it early so attendees can help out with the food and drinks.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute 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.

Under the microscope: your micro-transactions

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When it comes to paying off your mortgage, many of us are in the dark as to where we should be making significant savings. A good place to start? Cutting down on ‘micro-transactions’.

The lure of micro-transactions – purchases that are low in cost and trivial in nature – can be a real obstacle for those trying to pay off their mortgage faster.

Indeed, while the cost of these transactions may seem infinitesimal in the grand scheme of things, they can add up to the equivalent price of that trip you always wanted to take, or the sophisticated new piece of technology you’re desperate to try.

Of course, there are a myriad of ways to pay of a mortgage sooner, including refinancing or downsizing.

For many of us, however, addressing our penchant for micro-transactions is surprisingly effective. Here are a few examples.

Takeaway coffee and bottled water

Picking up a hot cup of takeaway coffee in the morning is an irresistible slice of luxury for many of today’s busy workers.

However, while a cup only costs a few dollars, transactions can easily add up for caffeine addicts.

One $4 cup of coffee costs you $28 per week. Over one month that’s almost $120. Over a year it’s almost $1500.

Consider switching to home-brewed coffee in a flask. As well as saving you a lot of money, you’ll be saving the environment by avoiding disposable cups. The same can be said for bottled water.

The gym

Having a gym membership can make you feel virtuous and healthy, but how often do you actually make use of it?

If the answer is “not as much as I should” then you need to reconsider your membership.

The daily cost of a gym membership is about the same as a cup of coffee. That’s another $1500 each year right there.

The great thing about exercise is that it can be done for free – throw on some jogging shoes and think about all the cash you’re saving!

Household bills

There are plenty of possible ways you could be overpaying on household bills.

Many people still pay for a landline, for example, but the rise of the mobile has made domestic phones almost redundant.

And do you really need high speed NBN? Most of the Telcos are offering BYO mobile phone plans with endless data for about $60-$70 a month – with unlimited calls and texts.

Once you go past a 40GB cap your internet speed is reduced to 1.5Mbps – which is still fast enough to stream Netflix in standard definition, browse the web, and listen to music.

The best bit? Your smartphone can double as a hotspot modem to your other devices.

Other common ways of overspending on household bills include failing to set a thermostat correctly, leaving electrical items on standby, using inefficient light bulbs or failing to obtain accurate meter readings.

Dig a little deeper into where your money is going on household bills and you could save a significant sum – enough to reduce your mortgage significantly each year.

Get in touch

If you’d like to find out other ways you can save on your mortgage – get in touch – we’d love to help out.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute 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.

Guidance needed for borrowers, industry body says

Property owners and prospective first home buyers are increasingly in need of clear guidance on home lending as the housing markets in Melbourne and Sydney begin to cool, says the Housing Industry Association (HIA).

The RBA on Tuesday again resolved to leave the official cash rate on hold at 1.5%, noting that the current settings continue to offer appropriate support for the Australian economy.

Borrowers are uncertain

Despite the stable cash rate, Geordan Murray, HIA Senior Economist, says borrowers are still wary of any potential hike in their borrowing costs.

“In the post GFC era lenders have frequently adjusted home loan rates independently of movements in the official cash rate in order to ensure that their lending rates more accurately reflect their true cost of capital,” explains Murray.

Clear guidance needed

Murray adds that as the housing markets in Melbourne and Sydney continue to cool it will be increasingly important that households have clear guidance on any potential changes they may face in home lending.

While industry guidance is great, having a trusted professional (that’s us!) watching out for market changes on your behalf is even better.

That’s because over the last couple of years there has been an additional degree of complexity in the home loan market – and we can help decipher what that all means for you.

“Lenders have been squeezed by regulators which led to a degree of credit rationing and higher borrowing costs for investors and those wishing to borrow in interest only terms,” explains Murray.

Why were lenders squeezed?

A while back APRA – the regulator – introduced a range of measures that tightened lending standards to curb growth in risky lending.

“APRA’s interventions were appropriate at the time that they were implemented. (However) the housing downturn now has its own momentum and does not need additional assistance from the regulator,” says Murray.

In fact, recent figures published by the RBA show that growth in housing credit to investors has dropped to a historic low and owner-occupier lending growth is also now slowing.

“The housing market is now in a very different position to the time when APRA imposed the restrictions. We have already seen the speed limit on investor lending dropped but other restrictions remain,” says Murray.

“It will be important for the RBA, APRA and the federal government to monitor developments in the housing market and ensure that we have appropriate policy settings to ride out the cyclical downturn smoothly.”

Want some guidance?

As Murray explains, now more than ever borrowers are needing someone to help guide them through uncertain lending times.

That’s where we can help.

We have our ear to the ground when it comes to all industry movements, which means you don’t have to stress about doing so.

So if you’d like to find out more about how we can help you navigate the tricky lending times ahead, 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 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.

On the up and up. Keen to jump into a property hotspot?

With housing values falling across half of Australia’s capital cities over the past year – and the media well and truly letting us know all about it – it can be all too easy to forget many regions are doing well. Here’s where property prices have recently experienced healthy growth.

The good news is that almost half of Australia’s 88 sub-regions have experienced growth in housing values over the past twelve months, according to CoreLogic.

These sub-regions are more formally known as SA4 sub-regions, which have populations between 100,000 and 500,000 people.

“Half of these regions have recorded a higher rate of annual capital gain relative to their five year average rate of growth, suggesting some acceleration in market conditions,” says CoreLogic’s Tim Lawless.

“In fact, 35% of the SA4 sub-regions have recorded an improvement in their rate of capital gain over the past 12 months relative to their five year average rate of growth.”

So where’s hot?

Two words: regional areas.

In fact, 57% of all regional areas recorded a rise in dwelling values over the past twelve months, while only 39% of the capital city sub-regions recorded an increase.

Here’s a list of the top 10 healthiest growth markets, all of which outperformed their five-year average.

1. Geelong, Victoria, 11.8% growth

2. Hobart, Tasmania, 10.7% growth

3. South East, Tasmania, 9.9% growth

4. Launceston and North East, Tasmania, 9.3% growth

5. Ballarat, Victoria, 7.1% growth

6. Central West, NSW, 6.1% growth

7. Sunshine Coast, Queensland, 6.0% growth

8. South Australia Outback, SA, 5.8% growth

9. Latrobe – Gippsland, Victoria, 5.3% growth

10. Northern Territory Outback, NT, 5.3% growth

Why are regional markets healthier?

The ‘healthier’ conditions across regional markets can be attributed to a range of factors, says Lawless, including:

More sustainable growth conditions: “Most regional areas have seen relatively sedate housing market conditions compared with the heroic gains across Sydney and Melbourne. The more sustainable history of price growth has kept a lid on housing affordability and made these markets attractive to migrants,” says Lawless.

The ripple effect: “A ripple of demand has been emanating from the largest capitals towards the satellite cities where housing is generally more affordable and lifestyle factors can be appealing.”

Sea change: “Many coastal and lifestyle markets have benefited from a rise in buyer demand, either from those looking for a new residence, second home or investment option.”

Bounce back: “Many of the hard hit mining regions have now levelled out and are now showing some growth.”

Capital cities that have experienced growth

There are some capital cities also doing well, says Lawless.

In Brisbane, seven of the nine SA4 sub-regions have seen a rise in values over the past year.

In Adelaide, three of the four SA4 sub-regions have recorded an annual gain.

Hobart is also experiencing significant growth (10.7%), as seen by its second place spot on the list.

“While conditions are broadly slowing, especially around Sydney and Melbourne, many areas of the country are benefitting from a history of more sustainable growth rates, improving demand and reasonably strong economic conditions,” says Lawless.

Interested in finding out more?

If you’re a first home buyer or an investor looking to purchase property in an area that’s recently experienced growth then get in touch.

We’d love to help you source a great home loan and help make your property ownership dream become a reality.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute 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.

Budget breakdown: implications for property buyers and sellers

How will 2018’s Budget affect the national property market? For buyers and sellers alike, we take a look at what you need to know.
The 2017 Budget had a strong focus on housing supply and affordability. This year, housing took a back seat with no new, direct
measures for first homebuyers or renters. However, some of the changes will likely have an indirect effect on both the residential and commercial sectors.
Stable interest rates
Homebuyers can take comfort from the fact that the Budget isn’t likely to put immediate pressure on interest rates. President of the Real Estate Institute of Australia Malcolm Gunning says: “This expected interest rate stability comes at a time when housing prices in some of our major cities are showing signs of easing, leading to improved affordability for first homebuyers.”1
No change to negative gearing
The government’s decision to leave negative gearing alone brought sighs of relief from the real estate and development industries.
Gunning described this as an ideal outcome for the housing market1, considering the stringent changes introduced last year to quell investor demand.
“[It was] pleasing to see that the government recognises the important role the current taxation arrangements for negative gearing
and capital gains tax play in increasing supply, keeping rents affordable and easing the burden on social housing by leaving these unchanged,” he said.
More land for home building
The budget did commit to establishing a $1 billion National Housing Finance and Investment Corporation and to release more land suitable for housing.2
As well as unlocking some Commonwealth land for development, the government has taken steps to discourage investors from holding on to land3 that could be used for new homes. From July 2019, investors will no longer be able to claim expenses such as council rates and maintenance costs for vacant land that could be used for housing or other development. The aim is to reduce so-called ‘land banking’, a process that allows investors to hold on to land in the hope that its value will rise while simultaneously enjoying tax benefits granted on the basis that the land would be used for homes or commercial buildings. Under the new rules, the deductions will only apply once a property has been constructed on the land and is available for rent.
Easier access to cheaper housing
Housing is cheaper outside the major cities but lack of access can make it an unrealistic option, particularly for those who work in commercial centres. The government’s allocation of billions of dollars in transport infrastructure upgrades4 could help resolve this problem over the longer term.
Projects designed to attract homebuyers into less expensive areas include upgrades to roads on the Gold Coast, the North South Rail Link in Western Sydney, the Melbourne Airport Rail Link and continuing upgrades to the Bruce Highway in Queensland. Nationally, there are also plans to reduce the congestion5 that can make a daily commute from the suburbs so frustrating.
Helping Australians age at home
In last year’s Budget, the government introduced the Downsizer Contribution so that, from July 1 this year, homeowners over 65 will be able to invest up to $300,000 from the proceeds of the sale of their family home into their superannuation fund6. Along with a higher income in retirement, the move could also be seen as encouragement for singles and couples to sell, freeing up more family homes. There was some speculation that in this year’s Budget the government would use changes to capital gains charges for sellers as further motivation to downsize but, instead, it introduced a measure designed to help retirees stay where they are6.
Now every homeowner over the age of 65 has the option of taking out a reverse mortgage worth up to $11,799 a year for the rest of their lives. A reverse mortgage is effectively a loan that allows homeowners to access the equity they have built up in their home without selling their property. The loan is usually repaid when the house is eventually sold and there are limits in place to prevent people from owing more than their property is worth.

More information
If you’re thinking about buying, selling or taking out a reverse mortgage in 2018 or 2019, you might want to talk to your mortgage
broker about the recent Budget and how it could affect you personally.

Sources:
1 https://reia.asn.au/wp-content/uploads/2018/05/Media-
Release-8-May-2018-Budget-2018.pdf
2 www.realestate.com.au/news/budget-to-rein-in-propertyprices-
with-measures-to-increase-housing-supply/
3 https://budget.gov.au/2018-19/content/bp2/download/
bp2_combined.pdf
4 http://minister.infrastructure.gov.au/mcveigh/releases/2018/
may/budget-infra_01-2018.aspx
5 www.ato.gov.au/Individuals/Super/Super-housing-measures/
Downsizing-contributions-into-superannuation/
6 www.australianageingagenda.com.au/2018/05/10/budgettreasurer-
expands-governments-reverse-mortgage-schemeto-
full-pensioners/