Tag Archives: Real Estate News

Australian home ownership rate is falling

Escalating property prices around the country could be pushing Australians out of the property market, with a recent report indicating that fewer than 50 per cent of Australian adults are likely to own a property in the next few years.

The Household, Income and Labour Dynamics in Australia (HILDA) report, released by the Melbourne Institute that the proportion of owner-occupied houses fell by 3.5 per cent between 2001 and 2014.

According to the report’s author, Professor Roger Wilkins, the fall in home ownership is due to high house prices, as opposed to less interest in owning a home.

Mr Wilkins said that it is likely that in the next few years fewer than half of adults will be homeowners and it appears to be mostly young homebuyers that seem to be struggling to get into the market.

The report found that home ownership among those aged 25-34 years fell from 38.7 per cent in 2002 to 29.2 per cent in 2014. Much of this decline was seen from 2010 to 2014.

A decline in home ownership was also seen in older age groups, although it wasn’t as pronounced as the 25-24 age group.

Home ownership fell from 63.2 per cent to 52.4 per cent for those aged 35-44, and it also fell from 75.6 per cent to 67.4 per cent for those aged 45–54.

Those aged 55–64 only saw only a slight decline in home ownership, from 75.1 per cent in 2002 to 72.9 per cent in 2014.

Those aged 65 and over saw virtually no change in home ownership over the period studied.

Young Australians shouldn’t let these new findings deter them from entering the property market.

While it’s true that escalating property prices are making it harder for a lot of people to buy where they might like to, there are still property pathways available for those willing to think outside the square or make some compromises.

These might include buying smaller property types, moving to regional areas where property is more affordable, or buying an investment property to build equity before buying an owner occupied home.

 

Reserve Bank cuts interest rates to 1.5 per cent

The Reserve Bank of Australia has slashed the official cash rate today to a new historic low of just 1.5 per cent.

This is the second time the cash rate has been cut this year with the last cut being in May.

So far the Commonwealth Bank has already announced that it will be passing on a portion of the cut (variable rates will be cut by 13 basis points) and no doubt more lenders will follow suit.

The decision to cut rates this month follows weak inflation data, along with low employment figures, a high Australian dollar and global uncertainty.

Property prices have also cooled down of late thanks to tightening of lending criteria by the Australian Prudential Regulation Authority, which has given the Reserve Bank more room to move.

RBA Governor Glenn Stevens said, “The most recent information suggests that dwelling prices have been rising only moderately over the course of this year, with considerable supply of apartments scheduled to come on stream over the next couple of years, particularly in the eastern capital cities.”

“Growth in lending for housing purposes has slowed a little this year.

“All this suggests that the likelihood of lower interest rates exacerbating risks in the housing market has diminished.”

The rate cut will be good news for mortgage holders and those thinking about breaking into the property market, particularly in places like Mudgee where properties are still affordable.

While lower interest rates do make it harder to save for a home deposit, once you get in and start paying down your home loan you can do it much quicker with low rates, which means it’s much easier to own your home sooner.

So if you’re in a position to buy then now is a great time to put your money to good use and start looking at your property options.

Just make sure to shop around to find the best home loan deals, as different lenders will have different home loan packages to choose from.

If you’re looking to buy and take advantage of the lowest interest rates in Australia’s history, then feel free to get in touch with the team at Professionals Mudgee Real Estate.

RBA cuts interest rates to record low 1.75 per cent

The Reserve Bank of Australia has cut the official cash rate by 25 basis points to a new historic low of 1.75 per cent.

This is the first change in interest rates since May last year, when rates were also cut by 25 basis points to 2 per cent.

In a statement by RBA governor Glenn Stevens, this month’s interest rate decision follows unexpectedly weak inflation data.

“While the quarterly data contain some temporary factors, these results, together with ongoing, very subdued growth in labour costs and very low cost pressures elsewhere in the world, point to a lower outlook for inflation than previously forecast,” Mr Stevens said.

Mr Stevens also said that the Board took careful note of developments in the housing market, where indications are that the effects of supervisory measures are strengthening lending standards and that price pressures have tended to abate.

“At present, the potential risks of lower interest rates in this area are less than they were a year ago,” he said.

“Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.”

The latest cut could prove to be good news for mortgage holders and prospective buyers in Mudgee if the banks pass on the full cut.

Within seconds of RBA’s announcement, NAB announced that they would pass on the full 25 basis reduction to their customers.

A full 25 basis reduction in rates equals a $72 a month saving on a $500,000 loan, bringing the average standard variable home loan rate down to 4.52 per cent, according to Canstar.

If most banks follow suit and pass on the full rate cut it will give people the chance to start getting ahead on mortgage repayments, and make it easier for first home- buyers looking to enter the market.

How low will interest rates go in 2015?

If you’ve been thinking about locking in a fixed-rate home loan then you may want to wait at least a few more months because it’s looking more and more likely that rates will drop by April this year.

The official cash rate has remained at the record-low rate of 2.5 per cent since 2013, but most forecasters agree that interest rates will drop to 2.0 per cent by the end of this year.

One real estate expert, SQM Research managing director Louis Christopher, believes that an interest rate cut will be on the cards if banking regulator, APRA, imposes investor-lending restrictions this year.

“They will do this in an attempt to reduce risky, speculative investor behaviour, particularly from those who should not be taking on large amounts of housing debt due to their limited capacity to pay it back,” Mr Christopher said.

“However, if APRA does move, it could potentially open the way for the Reserve Bank to make rate cuts, possibly more than the standard 25 basis points.”

Mr Christopher predicts an interest rate cut by April 2015 and a second reduction, possibly in June.

Not everyone agrees with Mr Christopher however, with the Commonwealth Bank recently stating that they believe the Reserve Bank will remain on the sidelines for 2015 so as not to hurt business confidence.

We will have to wait and see but even if there isn’t an official interest rate cut this year it is always worth chatting to your lender to see if you can make any savings on your current loan.

Are you hoping for an interest rate cut this year?

For those who are hoping to take advantage of low interest rates and want to buy a home in Mudgee this year, you can check out local properties for sale at professionalsmudgee.com.au.

 

Source: www.rpmonline.com.au

NSW First Home Owners Grant Threshold Increased

First-time buyers in NSW can now purchase new properties worth up to $750,000 to qualify for the $15,000 first home owners grant.

The changes came into effect on July 1 2014, raising the previous threshold of $650,000, which had been in effect since 2012.

For Sydneysiders this amount may not seem like much, with new houses or apartments easily reaching the threshold amount, however with the median price of a new property in NSW being around $650,000 a lot more first time buyers will now be able to benefit from the first home buyers scheme.

Of course, raising the threshold is likely to have minimal impact in regional areas like Mudgee where homes are available from $250,000 and brand new ones that qualify for a grant start from just $350,000.

The First Home Owner Grant (New Homes) scheme was introduced to help encourage the development of new dwellings in NSW and to help assist first home owners purchase a property, however the scheme possibly hasn’t been as successful as hoped.

According to government data, 100,000 new homes have been built since the March 2011 election, but first home buyers in NSW have been dwindling and its possibly because many are trying to save up more to be able to afford a new home and take advantage of the grant.

In 2013 around 7600 first time buyers took advantage of the scheme, compared to about 36,000 in 2011 when a $7,000 grant was available for new and established homes.

The first home owners scheme is beneficial if you are looking at buying a new house or apartment however, so for those in Mudgee who would like to take advantage of the scheme, you can find all information about eligibility and how to apply at www.osr.nsw.gov.au/grants/fhog.

First home buyers should also note that the scheme will be reduced to $10,000 on January 1 2016.

For anyone who is interested in finding a new home in the Mudgee region, please don’t hesitate to get in touch with one of the team at Professionals Mudgee Real Estate, we have a number of properties between $350,000 and $400,000 that are close to completion for anyone looking for their first home.

 

Source: www.propertyobserver.com.au

 

 

 

 

Good News For Mudgee Home Owners And Buyers!

Interest Rates Roll The DiceThis week the RBA met, and again determined that interest rates would remain on hold at 3% for the 4th consecutive month.  At this stage the major banks have left their variable rates unchanged, continuing the relief on Mudgee home owners and no doubt increasing the temptation for buyers.

Rising house and share prices are boosting consumer confidence, and retail sales in January suggested Australians are starting to spend more after a period of restraint.  Despite this boost in confidence, experts are predicting that interest rates are likely to stay on hold for the remainder of 2013, with some room for more cuts if the economy needs further sparking in the future.

If you currently own real estate in Mudgee, this is no doubt music to your ears.  In fact we’re sure many Mudgee real estate owners sleeping a little easier knowing that rates will be remaining low for at least another month.  But of course if there’s one thing we know about the economy it’s to expect the unexpected.

Rather than using low interest rates as an opportunity to buy big and pay small, you may be better served by using the relief time as a saving period.  Our advice is to enjoy the low interest rates, but rather than lashing out on an extravagant home on the edge of your budget, why not play it a little safer and aim for a mortgage that gives you a little bit of breathing space?  And if you already own a Mudgee house, why not pay a little more off your mortgage every month than you need to?  It’ll help you to build up some equity, and will ease the financial stress when rates do rise again in the future.

 

Changes to the NSW First Home Buyers Grant

Mudgee First Home Buyers may be interested to know that the NSW State Government has announced in the recent state budget that the first home buyers grant will be increased from $7,000 to $15,000 as of October 1st 2012. From January 1st 2014, the First Home Owners Grant will then be reduced to $10,000. This is welcome news for people entering the real estate market for the first time, however there is a catch.

The First Home Owners Grant will no longer apply for existing dwellings and will be focused directly on new dwellings. Therefore those who want to buy an existing home should take advantage of the current $7,000 grant on offer before it expires on September 30th 2012.

There have also been changes made to stamp duty concessions with full stamp duty concessions now only available for properties worth up to $550,000 (the current amount is $835,000). From $555,000 to $650,000, stamp duty concessions lessen by 1 percent for every $1,000.

Stamp duty concession for off-the-plan apartments and house and land packages will be scrapped in favour of a $5,000 payment to anyone who buys a newly constructed home and for vacant land purchases, stamp duty exemptions will apply for land valued up to $350,000, and concessions will apply up to $450,000.

The change in property concessions will likely encourage new home buyers to look to new homes over established ones and it has been brought in to help promote property development in NSW.

With all of the changes about to take place in property concessions, it’s important for first home buyers to think about their property needs and either wait for the new grant to come into place if they want to buy a new property, or make movements now if they’re interested in buying an established home.

If you’re a buyer and need assistance looking for homes in Mudgee please don’t hesitate to get in touch with us via our Professionals Mudgee Real Estate office.

If you would like to find out more about First Home Owner Benefits you research information released by the NSW State Government at www.osr.nsw.gov.au/benefits/first_home/.

What’s the Real Estate Market Doing at the Moment?

Locally we know that Mudgee has a relatively strong housing market because of the mining industry’s impact on building, investment, and rental demand. Quite often though, the media reports of Australia’s housing market is not as positive.

Last week, RPdata, one of Australia’s leading authorities on real estate market statistics, reported that the country’s property market is showing signs of stabilising with home values rising 0.2% in March 2012. Whilst this may not seem like much of an improvement, the positive news is that the housing market has not weakened, and our own capital city Sydney, is one of the main growth centres for the current market with home values rising 1.1% in the Jan-Mar 2012 quarter.

Finance approvals have played a major role in the stabilisation, with first home buyers coming back to the real estate market instead of continuing to rent, which we know first hand that weekly rents continue to rise across many parts of Australia, especially in regional towns like Mudgee where the mining industry has had such a significant impact on housing availability.

The RBA has also reported that many mortgage holders are paying off capital on top of their minimum mortgage repayments, which shows that home owners are coping better financially with managing mortgage dept than in recent years.

Overall it appears that Australia’s housing market could start to see a turn around, though when that happens is for the experts to speculate. We’re all for hearing positive news, so we wait in anticipation for more on the movements of the residential housing market – stay tuned!

First Home Buyer Grants Still Available

It’s not too late!

If you’re a first home buyer, you would know that the 1st of January brought about the end of the First Home Plus Scheme exemptions and concessions here in New South Wales. The good news for first home buyers is that it was replaced by the First Home – New Home Scheme.

For new homes valued up to half a million dollars, the new scheme means first home buyers will still be eligible for Stamp Duty exemptions. The same goes for vacant land valued up to $300,000 which also still allows the $7,000 First Home Owner Grant rebate.

So our advice for first home buyers is to get serious about your property plans. With so many changes happening within Government, it’s important to stay abreast of what rebates and concessions are available to you for the type of property and price bracket you’re looking to buy in so you can maximise your finances.

If you’re interested in vacant land in or around Mudgee, we’d be happy to help you out, or you can check our property listings online.

Welcome to Our Blog

For all of our loyal friends and followers, here’s something new we’re starting – it’s our new blog! We’ve very excited about it and can’t wait to start posting some helpful information for people looking for real estate tips and advice, and people wanting to learn about what’s happening in our local area of Mudgee.

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