What type of buyer are you?

have clear goals when purchasing. Understanding where you fit in as a property buyer will help you purchase property based on what is most important to you.

Here are the 3 types of property buyers:

House buyer. Are you more concerned about the look and the feel of the property? Does a pretty façade attract you regardless of the type of property location? A house buyer is focused on how property looks to his liking.

Location buyer. This type of buyer may be willing to compromise on the looks for as long as the property is located in a favourable location, accessible to major amenities that meet their needs.

Price buyer. If you are more concerned about how much the property costs regardless of the look and location, then you are a price buyer. A price buyer is more concerned about aligning the property with their budget.

Most property buyers may be any mix of the three, but you should be able to identify which is most important to you. This helps you avoid any risks and regrets when purchasing.

Read more about this on the Property Observer website.

New law to allow First Home Buyers to purchase property using Superannuation

Parliament is set to debate whether First Home Buyers should be allowed to purchase property by having early access to their Superannuation. Proposed by Senator Nick Xenophon, this scheme will be similar to the one already in effect in Canada, where people can borrow as much as $25,000 from their Super and repay it in 15 years.

The proposed law has been met with mixed reactions; with others citing that this idea was taking government assistance too far, as this would create complications in cases of separation and if other circumstances take place. Others believe that the idea should be expanded to accommodate as much as $100,000 in borrowings to their Superannuation, as property values are expected to grow over time to cover this amount.

Will this new law serve as a solution to the Australian dream of owning a house, or will this pose a huge risk for one’s nest egg? The debate will be settled soon enough.

Read more about this on the Adviser website.

Is there a surefire way to address housing affordability?

Dwelling values have constantly increased in the past months, with Sydney and Melbourne leading all capital cities in dwelling values, up by 2% and 1.8% respectively in the 2nd quarter of the year. Overall, the combined capital cities index has increased by 1.1%. For investors, these are great news. But how about the many Australians who dream of purchasing their own home?

In an attempt to address housing affordability, Master Builders Australia, in a senate inquiry has urged the government to consider increasing the supply of housing in the country, after recent data from the Australian Bureau of Statistics showed a 5% decline in building approvals for the month of June. They are also encouraging the government to pursue an intergovernmental agreement to implement first homebuyers assistance for both new and established homes, and to assess the benefits of allowing homebuyers to use their superannuation to purchase property.

Read more about this on the Your Investment Property website.

Growing optimism for first home buyers

First home buyer numbers rise for the second consecutive month to a seasonally adjusted 2.2%, according to the Australian Bureau of Statistics. Master Builders Chief Economist Peter Jones believes that this will provide inspiration to the growing confidence of first home buyers as they make their presence felt in the market again.

In the 2013 and 2014 fiscal year, new home loans have increased by 12%, attributing to low market rates and high construction activity, both conducive for first home buyers. New home loan building is also at a four – year high of 13.2%. Although this is still below the long term average of 20%, first home buyer data is in an upward trend. Economists are expecting this to continue, as first home buyers are trying to make their presence felt back into the market.

Read more about this on the Property Observer website.

One third rely on parents to purchase their first home

As house prices continue to rise, first home buyers need all the help they can get – even from their parents. One out of three home buyers are seeking assistance from their parents in paying for the entire deposit of their property, according to data from Aussie Home Loans.

Looking back, less than 10% of parents helped their children purchase their first home. With house prices increasing around 10% annually, parents have been shelling out around $122 million a year. Home owner loans and contributions have increased by 15% from the previous year, clear signs that the coming generations are in dire need of help in purchasing the house of their dreams.

Read more about this on the DailyMail website.

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Are Australian houses overpriced?

A former economist at the Reserve Bank of Australia has expressed concern over the increase in house prices, stating that house prices in the country are overpriced by as much as 30%.

Jeremy Lawson was a senior economist for the RBA and currently works for Standard Life. He points out several factors that will negatively impact households in the future, as household debt to income ratio reaches unsustainable levels. He is mostly concerned about the Chinese growth slowdown, where majority of investments on the country depend on, making households vulnerable in case the interest rate increases. Current household debt is growing more than twice than wages.

The RBA has downplayed these issues, stating that credit growth is at a sustainable level. The annual housing credit growth of the country sits at 6%.

Read more about this on the Property Observer website.

Building construction work up for 2nd quarter

The Australian Bureau of Statistics have released the Construction Work Done report for the June quarter, showing an increase in residential building work increase of 3.6%, valued at $13.379 billion.

The increase was attributed to strong construction work in Victoria, New South Wales and Tasmania, where construction work has been the strongest, posting an increase for the last 3 quarters. The Australian Capital Territory posted an increase after a two year decline in construction work. Meanwhile, declines in construction were seen in Queensland, South Australia, the Northern Territory and Western Australia.

Residential construction also increased to 3.2% this quarter, with detached house construction driving the growth of the residential sector.

Read more about this on the Property Observer website.

Purchasing a home? 10 things you should consider

When planning to purchase property, it is important that you have a clear understanding as to what factors should be considered a necessity. Here are10 important home requirements you should be mindful of when purchasing a home:

Energy efficiency. Savings are one of the key considerations when purchasing property. When the household budget comes in, all homes deal with energy expenses. The more you can save on energy, the better.

Storage. Storage space is another high priority. Modern home buyers prefer walk – in closets, pantries and other built in storage.

Technology. The latest innovations are sure to attract home buyers, especially if these are modern innovations, such as LED lighting and temperature controls.

Security. Property buyers also look into security solutions that are available such as glass and motion sensors. This is a big plus when buyers are purchasing property.

Space. As with any property, any ingenious ideas to save and maximize space is sure to attract home buyers.

Kitchen. Recently, kitchens have become a selling point for property buyers. Add in a modern finish and energy efficient appliances and you’re sure to get people interested.

Laundry. A basic requirement for homes – and surprisingly, one of the top features required when purchasing a home, according to recently conducted surveys.

Upkeep. Large homes are slowly losing steam. Newer homes that are easier to maintain are attracting more buyers.

Location. What’s a perfect home if it’s not in a perfect location? this is still a top priority when purchasing property.

Read more about this on the Property Observer website.

Housing debt surpasses pre – GFC record

Overall housing debt to income ratio has reached a record breaking 137.1%, 5 percentage points higher than what was recorded prior to the Global Financial Crisis, according to the Reserve Bank of Australia.

The shocking news was revealed in a recent report by the RBA, showing a drastic growth in mortgages as opposed to incomes. Owner occupied debt to income ratio has also shattered the pre – GFC record, currently at 90.9% from a then high of 86.7%. Mortgages have a critical impact over the economy as home loans cover around $200 billion in annual borrowings. Property remains in demand as recent national auctions finished at a decent 70% clearance rate.

Read more about this on the Financial Review website.

Loan limits: the IMF’s solution to rising house prices

The International Monetary Fund has a suggestion for the Reserve Bank to counter the rising house prices without having to raise rates – set up lending limits for home loans.

With banks now having the ability to play around with economic tools that allow them to offer varying loan types, IMF managing director Christine Lagarde has stated that that ”The Australian Central Bank, under the strong leadership of its governor, will able to deal with it.”

Banks have yet to comment on the situation, as loan limits will eventually require the Big 4 banks to increase their capital, as the chances of a taxpayer funded bailout are reduced and will require the banks to raise more money – significantly reducing their profitability.

Read more about this on the Yahoo Finance website.