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Investors dominate loan market

Investors share on the loan market have increased to 40.6% for August, well above the average of 30.9% for the past 23 years, clear signs that the insatiable appetite for property are far from satisfied.

Refinanced owner occupied home loans have also increased to a record high 49.7%, well above the long term average of 36.5%. Despite these numbers, home lending for investors has actually slowed down, rising just 6% in 6 months, compared to a 21% increase 6 months before. Home buyers are clearly outgunned as lending dropped by 4% in the past 6 months, as opposed to a 9% gain 6 months prior.

Despite the Reserve Bank’s warning on the glaring disparity between home buyers and investors, the building industry has remained as one of the most optimistic sectors in the economy as the mining boom starts to fade.

Read more about this on the Australian website.

First Home Buyers: The 5 facts

First Home Buyers are slowly losing hold of the property market as it posted a record low share of 11.8%, according to the Australian Bureau of Statistics.

Here are 5 facts about the current situation of First Home Buyers in the country:

First Home Buyers financed loans have dropped by 10% in August at 6,055 compared to the previous month’6,718.
First Home Buyer numbers have remained unchanged for the past decade, despite increases in Median Price and lesser concessions.
First Home Buyers are having a hard time as the First Home Owners Grant has gone through several changes, the most important of which is adding a cap depending on the value of the property. In 2004, First Home Owners Grant was uncapped.
If predictions are correct and the interest rates increase next year, repayment for a $300,000 home loan is expected to increase by $300 every month.
Median house prices have ballooned by 72% over the past decade.

Read more about this on the Property Observer website.

More young Australians are worried about home ownership

A recent survey of 1,000 young adults by the ME Bank shows growing skepticism on home ownership for Australians aged 18 – 29, with 26% believing that can never afford buying a home.

Of all the adults surveyed, 18% believe that owning a home in current market conditions is unattainable. Despite these dismal results, 20% of the young adults surveyed are feeling a sense of urgency, as they are finding ways to increase their savings. Overall, 51% of respondents believe that house prices will surge further, with 40% expecting it to remain steady. Only 9% believe that house prices will fall.

Read more about this on the Adviser website.

House median price at record high

The Capital city median house price increased by 1.1% for the month of October, reaching a staggering record high of $681,640, according to ANZ research.

Melbourne and Sydney median house prices increased by 2.2% and 1.2% respectively and were pointed out as the main reasons for the price jump. All other capital cities increased less than 1% or dropped in value. Sydney leads all capital cities with a median house value of $868,866, while Hobart has the cheapest, at a value of $340,461.

Read more about this on the Property Observer website.

RBA open to more rate cuts

The Reserve Bank of Australia has recently opened their doors to the possibility of further rate cuts to improve the economy, according to Deputy Governor Philip Lowe in a recent speaking engagement for Australian economists.

The RBA has seen the desired effects on the economy, while keeping the interest rate at 2.5%, but will be willing to cut it further if the economy needed stimulus. The property market has been growing steadily at the current rates and the construction sector is expected to follow suit.

Read more about this on the Your Mortgage website.

Beware of Illegal property investments

The rise in illegal property investments have raised concerns on the existing policy for purchasing property, as it was recently discovered that illicit auction activities have been targeting foreign property investors.

Current laws stipulate that foreign buyers can only purchase new or newly completed dwellings. The Foreign Investment Review Board has been called out for not prosecuting a single buyer despite the growing number of foreign buyers of established property.

Joseph Zaja, Managing Director for Ausin Group has pointed out auctions as a major source of these activities, citing a large number of foreign buyers of existing properties where clearance rates are at record highs, particularly in Sydney and Melbourne.

Read more about this on the Mortgage Business website.

What to do when you can’t keep up

The situation: You were not able to keep up with your mortgage, debt has piled up and your account is in arrears. What do you do?

no-money If you are having trouble keeping up with your mortgage, refinancing your loan may be the solution for you. Refinancing gives you the ability to either extend the home loan term, or get the best interest rates, whichever is right for you.

If your mortgage is caught up in arrears, it is not the end of the road. Although refinancing may be difficult, there are several things you can do to resolve this issue. You can contact your existing lender to restructure your loan. Most of the time, this will extend the loan term with interest.

You may also want to seek assistance from a certified financial planner. These people are well equipped and knowledgeable in assisting people with mortgage issues, and they might be able to hook you up with a specialist lender to help you pay off the loan. They will look into your credit file and see which one meets your current financial standing.

Renovations that add value to your home

Renovating your home can attract buyers at a higher price, without you having to shell out that much. Oftentimes, buyers want to purchase homes that are attractive and livable. To get the most out of your property, it is best to look at the details and figure out which renovations can present your home as desirable as possible. As a rule of thumb, it is essential to get a $2 return for every $1 invested in improvements. Here are certain areas in your house that you can renovate to add value to your property.

Garden. Cleaning up the garden and adding plants of different varieties can increase the value of your home. Keeping the exterior clean and repairing outdated bricks and fences will ensure that your property is giving out a good first impression to buyers.

Paint. Probably the cheapest and easiest way to increase the value of your property, painting walls and trimmings can provide your home added value. Seek expert advise on finding the best colour scheme. DIY painting is a popular way to attract home buyers nowadays.

Floor. Being the largest visual area of your property, floors should be presented to attract home buyers by keeping it clean and inviting. You might want to consider removing old carpets and polishing flooring, or install new carpets to add value to your home. Linoleum can also be used as it can be cheaper than carpets, but provide you a wide range of options – such as timber finishes and tiles.

Lighting. Take advantage of natural light. Properties that let light in are often preferred, as it is not only cost effective in electricity savings, but it provides a natural ambiance. Make sure that all lights in the house are working, and replace worn out bulbs with newer ones.

Bathroom and Kitchen. Make your kitchen presentable. Paint existing cupboards and replace old and worn handles. These simple details can turn off potential buyers. Similar to the kitchen, small changes to your bathroom can be crucial for home buyers. Change the tap heads and replace old tiles.

Attention to detail is key for adding value to your property. Put yourself in the homebuyers shoes. What would you want in a property? What do I look for when purchasing a home? Answering these questions can help you get the most out of your property making it more livable in the most affordable way possible.

Are house prices dropping?

House prices have been on an upward trend for the past 3 years because of the high demand for property, but that is about to change according to Investment bank Morgan Stanley. According to their recent report, house prices have been heavily reliant on the interest rate and without further cuts the property market is in danger of dropping in value.

An influx of Units and Apartments in inner cities areas have been on the rise, causing economists to fear an oversupply will cause property prices to drop dramatically. Interest rate cuts are expected to ease the effects of this sudden growth. Meanwhile, The Reserve Bank on its recent board meeting last June 3 has declared no changes to the interest rate.

Read more about this on the Sydney Morning Herald website.

Add value to your Property by choosing the best builder

Whether you are a home investor or buyer, choosing the best builder can be a tedious task for any project as you are entrusting the overall look and value of your property. You will be spending a considerable amount of time with the builder during the construction or renovation process, so it is important that you have full confidence in their capacity.

Here are 5 surefire tips to choose the best builder for your property.

Quality. You should have a keen attention to detail when your property is built or renovated. Check for quality finishes, leveled tiling and overall quality. Take the time to check for testimonials from previous clients.

Price. Understand the breakdown of materials and other included costs. Remember that cheap doesn’t necessarily mean you’ve made a bargain. Quality materials often come at a price.

Resale. Consider this: when I decide to sell my property, does the renovation add value? Is the cost of renovating earn me money?

Aesthetics. Display homes are not the most practical way to pattern your property construction and renovation. These homes are specifically created to be just that – eye candy. Analyze the practicality of certain finishes and styling, and check if it fits your floor plan and area.

Area. Not only should you check the builder design, but you should also check if the builder services your location. The last thing you want is to find the perfect design for your home and realize that it is not available in your area.

Read more about this on the Property Observer website.