Buying or Renting? Which is Cheaper in Australia
According to new data, buying is now cheaper than renting for nearly a third of Australian homes, although expected rate increases are making it harder for homeowners to make mortgage repayments. In Australia, 27% of homes are more cost-effective to buy than rent over the next 10 years based on current prices, according to PropTrack’s latest Buy or Rent Report. Cheaper prices in regions and smaller capital cities mean buyers can get better value for their purchase there than in Sydney and Melbourne, The Australian reported. In New South Wales, it is currently cheaper to buy than rent only 9% of properties thanks to the massive price increases during the recent housing boom, The Australian reported. In Queensland, 51% of properties are cheaper to buy than rent compared to South Australia, where it’s cheaper to buy 34% of properties. On the other hand, buying is cheaper than renting in 7% of cases in Victoria. While renting may be cheaper than buying in many places in the short term, Ray White Chief Economist, Nerida Conisbee said that homeownership is a long game. “The reality is, it is always cheaper to buy as you get growth in equity, and repayments over time will be cheaper in relative value to your home,” she told The Australian. Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.
Turn-key & fixed price… What does it mean?
When looking to buy a new home, you will likely find a wide range of options available from builders and real estate agents. On your search, you may come across the terms ‘fixed price’ and ‘turn-key’. But what and how do these two mean and differ? To define, turn-key means that once your new home is completed, you can turn the key and start living. In short, the build price of a turn-key home encompasses everything a home should have when the purchase is made. This is in contrast with a not-turn-key home that comes with separate additional costs for the extra inclusions. Thus, along with purchasing a new turn-key home, the builder will provide you with a full encouraging list of inclusions for that package, such as: Landscaping & Fencing Turf & Letterbox Driveway & Paths Blinds to windows & Sliding Doors Fly/Security Screens Air Conditioning Kitchen Appliances + Dishwasher Bedroom Fans Carpet /Tiles throughout the home Meanwhile, a fixed price contract simply means that you as a client and the builder agree to a set price for contracted services at the onset of a project. This only means your new home’s purchase price will include everything in your contract. This then will give you an assurance that you will not face any unexpected build or site costs that may occur during construction, as the builder will be the one who will shoulder these costs. Call us now for 45 minutes one on one free financial consultation session. 1300 074 675 or message us on WhatsApp +61 488 859 637
Exploring Australia’s Record-High Rental Prices Amidst Growing Property Investment Market
Australia’s property rental market is experiencing unprecedented growth. Rental prices are soaring to record highs, and occupancy rates are reaching new peaks. As the country returns to a semblance of normalcy after the COVID-19 pandemic, the market is expected to face further challenges due to the persistent supply-demand imbalance. In this article, we examine market trends and the reasons behind the surging rental prices. We will also discuss the implications for property investment. Rising Rental Prices and Market Dynamics According to a recent report by The Australian, rental prices in the major capital cities have spiked by 19.7% over the past five years. The average weekly rental prices range between $420 and $575, with the Australian Capital Territory (ACT) being the most expensive. The director of Economic Research at Proptrack, Cameron Kusher, highlights the intensifying market conditions, attributing them to factors such as increased demand from students returning to universities and the resumption of overseas travel. Market Trends and Investor Behavior Despite traditionally slower growth, cities like Sydney and Melbourne have witnessed substantial rent increases of 8.4% and 9%, respectively, for units over the past year. Concurrently, the vacancy rates for units in these cities have plummeted, indicating high demand and limited supply. Kusher also notes a trend of investors selling properties, with many opting for private ownership or using the funds to renovate their primary residences. These factors contribute to the tightening rental market and further exacerbate the supply shortage. Property Investment Outlook While rising interest rates may lead to a potential decline in property prices, Kusher suggests that the same expectation may not apply to rental rates. As a result, the residential property market is anticipated to garner increased interest from investors seeking stable rental income. However, navigating the market amidst these record-high rental prices necessitates careful analysis and strategic decision-making. Conclusion: Record-high prices and soaring demand currently characterize Australia’s property rental market. This situation presents both challenges and opportunities for property investors. As rental prices continue to surge and supply remains constrained, investors should carefully assess market trends. Investors also consider the implications of rising interest rates. They also need to evaluate their investment strategies accordingly. Despite the hurdles, the residential property market is poised to attract heightened attention from investors seeking long-term rental income. Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.
How to Reduce the Financial Pain of Increasing Mortgage Repayments
The Reserve Bank of Australia recently raised the cash rate by 0.25 percentage points, resulting in banks announcing that this increase would be passed on to their customers. As a consequence, mortgage holders may experience an additional financial burden, with an estimated $68 per month increase in repayments on a $500,000 loan. However, there are several options available to help reduce the financial pain of increasing Mortgage Repayments. Here are some of some effective strategies you may consider: 1. Extend the Length of your Loan While not ideal, as it would mean the borrower would pay a lot more in interest over time, extending the length of the loan would reduce their repayments. In fact, those who have had a mortgage for a long time are almost guaranteed to be paying a higher rate – so it’s time to negotiate as stated by Alan Kirkland, the Choice CEO. Meanwhile, according to the Australian Competition and Consumer Commission (ACCC), borrowers with home loans between three and five years old paid on average about 58 basis points (around half a percent) more than the average rate paid for new loans, news.com.au reported. For instance, someone with a home loan of $250,000 could save $1,400 in interest in the first year by switching to a loan with a lower rate – that is $17,000 in total savings by the end of their loan term! 2. Find Other Ways to Save Money Aside from housing loans, people should also look at their personal loans, credit cards, and other forms of debt often at higher interest rates, Annette Morgan, Curtin University tax clinic founder and director, told NCA NewsWire. She also mentioned: “They could consider consolidating all their debts into one or into their housing loan if they have enough equity in their home to do so,” Morgan said. “This of course means you are paying the debts off over a longer period, but the benefit is only one payout per month and usually a much lower interest rate.” Along with this, Morgan also advised people to look at their service providers, including electricity, gas, and various insurance to “see if there are any savings to be made in changing policies or providers.” 3. Pause your Repayments Many probably are not aware of this, but borrowers under genuine financial hardship can ask their bank for a temporary moratorium on their repayments to offer them some relief. Aside from this, banks may add arrears to the mortgage on some occasions. 4. Lock in a Fixed Loan As advised by News.com.au, people who are highly risk-averse may opt for a fixed-rate loan, instead of a variable, which means their repayments will remain the same. They also added that borrowers may also opt to fix a portion of their loan, and leave the rest as a variable loan with an offset facility so they can put extra money in and reduce their repayments. 5. Get on Top of Further Rate Rises People who were lucky enough to have already locked in low-fixed loans should know they will likely be paying much more once these end. They should consider their future household budget. There is also a need to put money aside to ensure the increased payments are not too much of a shock, news.com.au reported. Hence, considering these strategies might be helpful to reduce the financial pain of increasing mortgage repayments, which may lead to eradicating people’s household finances strains in consecutive years.
Buying is Cheaper than Renting for First Time Buyers
Buying Cheaper than Renting for 40pc of First Home Buyers According to a poll conducted by Great Southern Bank, owning a home is cheaper than many hopeful home buyers anticipated, with more than 2 out of every 5 recent homeowners paying less on their mortgage than they did on rent. Here, 42% of existing homeowners reported spending less on their mortgage than renters, while another 26% pay approximately the same from the poll of 1,500 homebuyers. Megan Keleher, chief customer officer of Great Southern Bank, said that “many would-be homeowners overestimate the costs of holding a home loan.” “Our study reveals that many first-time house purchasers pay more on rent than they do on a mortgage – and this trend is only expected to continue in the current rental market,” she said. In fact, almost twice as many recent homeowners living in regional areas reported a decrease of 44% in their housing costs rather than an increment of 26%. Meanwhile, for those first home buyers who are renting and still looking to buy one, 61% are expecting to pay less on their mortgage each month compared to their existing rent. Ray White’s Chief Economist, Nerida Conisbee, supported this perspective emphasizing that “with many incentives available, buying was looking a lot better than renting”. Despite an interest rate rise, Conisbee presumes that “numbers of first home buyers who would potentially pay less on their mortgages than their rent is likely to increase this year”. Whereas, Megan Keleher additionally said, “interest rates have been at record low levels for some time now, making home loans even more affordable”. Please contact us for clarification, or further advice, regarding any of the topics covered.
Six Ways to Increase My Credit Score
Are you overwhelmed by the feeling like your credit history is a mess? There are ways that you can get back into lenders’ good books. Wanna know how to increase your credit score? Here are 6 ways to improve your credit score. 1. Check-Out your Credit File to See Where you Stand If you want to increase your credit score, it is important to check out your credit file to see where you stand. Out of all the many credit reporting bodies available that you can approach to get your credit file in Australia. CheckYourCredit, Equifax, Illion, and Experian are only some of the major ones you can check, and where you can request a free copy of your credit report more frequently and/or every 12 months in Australia. This is an important step as this will tell you which areas need to be addressed. 2. Make Sure There Aren’t Any Errors After having the copy of the credit report, it is a must to thoroughly review it to make sure there are no major errors or listings on the report. This checking practice then will give you the assurance that your money is free from eros, and secured, and will help to prevent you from identity fraud, such as a fraudster taking out several credit cards under your name. 3. Pay your Bills On-time Regardless, it is a good attitude and a must to pay bills on time. Regularly practicing this behavior will not only help you stay at peace with pending bills but also make the lenders aware and be impressed that you are responsible with your funds even if you have made missteps previously. 4. Have a Credit Card To ensure you are even more creditworthy, it is a good idea to make measured credit card use as this will benefit you to make your payments regularly and on time. Doing so will serve as evidence that you are more than capable of managing debt. Also, to properly utilize your credit card in good use, it is a must to only buy things that are a ‘need’ rather than a ‘want’ and ones that you know you can repay immediately. 5. Pay Off Any Outstanding Debts Having pending bills could damage your credit score, that’s why paying any unpaid bills or debts as fast as possible should be the top priority. 6. Minimize New Credit Applications To increase your credit score, it is advisable to refrain from making multiple credit applications. Applying for multiple credit applications can accumulate hard inquiries, where lenders request to review your credit history before lending you money. Such applications occurring over a short period of time can put your credit score at risk.
Loan Products, Rising Interest Rates
With the recent rise in interest rates, property investors are presented with an opportunity to review their lending arrangements and potentially benefit from refinancing their loan portfolios. This article discusses the advantages of refinancing in the current market and highlights attractive offerings that make the process more enticing for property investors. Seizing the Opportunity to Refinance The increase in interest rates serves as a prompt for property investors to evaluate their current circumstances and lending arrangements. Refinancing provides an opportunity to secure a more favorable loan structure, potentially reducing monthly repayments or accessing additional features that align better with investment goals. Attractive Offerings for Refinancing Lenders are aware of the growing demand for refinancing and are introducing enticing offerings to support property investors. One such example is the Life of Loan package, which includes fee waivers, cashback incentives. Additionally, it rewards customers who have or plan to have solar panels installed on their investment property. These perks add value to the refinancing process, making it even more beneficial for investors. Competitive Interest Rates In the current market, lenders like ubank are committed to staying competitive on interest rates. Furthermore, by ensuring that property investors seeking to refinance can access favorable terms and potentially secure lower interest rates. It effectively reduces the overall cost of their loan and increases potential savings. Simplified Refinancing Process To support investors who wish to refinance, lenders are continuously striving to simplify the refinancing process. Streamlined applications, minimal documentation requirements, and dedicated support teams make it easier for investors to navigate through the refinancing journey. This enhanced convenience encourages more investors to explore refinancing options. Conclusion As interest rates continue to rise, property investors should consider the benefits of refinancing their loan portfolios. The current market presents an opportunity to secure more favorable terms, reduce monthly repayments, and access attractive offerings provided by lenders. By taking advantage of refinancing, investors can optimize their lending arrangements, potentially saving money and aligning their loans with their investment goals. Call us now for 45 minutes one on one free financial consultation session. 1300 074 675 or message us on WhatsApp +61 488 859 637
Understanding The Help To Buy Scheme: Making Property Ownership More Accessible
The Help to Buy Scheme is a government initiative designed to make property ownership more accessible for Australians. The scheme aims to tackle the housing crisis and enable more households to enter the property market by providing an equity contribution toward the purchase price of a new or existing home. This article explores the key features and advantages of the Help to Buy Scheme. It will highlight its potential benefits for aspiring homeowners. Lower Deposit Requirements Under the Help to Buy Scheme, home buyers are required to have a deposit of only 2 percent or more to qualify for a standard home loan with participating lenders. This lower deposit requirement reduces the barrier to entry, allowing more individuals and families to take the first step toward homeownership. Incremental Homeownership One unique aspect of the Help to Buy Scheme is the option for homebuyers to gradually purchase additional stakes in the property during the loan period. Starting with a minimum stake of 5 percent, buyers can increase their ownership over time. This incremental homeownership approach provides flexibility and the opportunity to build equity in the property gradually. Waiver of Lenders’ Mortgage Insurance (LMI) Unlike traditional home loans, the Help to Buy Scheme does not require borrowers to pay lenders’ mortgage insurance (LMI). Typically, lenders require this insurance when the borrower has a deposit of less than 20 percent. By waiving LMI, the scheme further reduces upfront costs for homebuyers, making property ownership more affordable. Repayment of Financial Contribution If the homebuyer’s income exceeds the Help to Buy gross annual income threshold for two consecutive years in certain circumstances, the government may require them to repay a portion or the entire financial contribution provided. This repayment requirement ensures the scheme remains sustainable and assists those who genuinely need support. Enhanced Affordability and Financial Freedom The Help to Buy Scheme aims to empower Australians to purchase a home with a smaller deposit. This scheme will result in a smaller mortgage and reduced mortgage repayments. Individuals and families can build equity in their property by making homeownership more affordable. Additionally, they can also enjoy the benefits of stable housing and increased financial freedom. Conclusion The Help to Buy Scheme offers a lifeline to Australians aspiring to own a home by providing a government equity contribution and reducing deposit requirements. With lower upfront costs, incremental homeownership opportunities, and waived LMI, the scheme makes property ownership more accessible and affordable. By taking advantage of this initiative, individuals and families can transition from renting to homeownership. They can realize their dreams of long-term stability and financial security.
Why Invest in Property
2020 was a year like no other in Australia and, thanks to COVID-19, Australia saw its first recession in over thirty years. But now that real estate markets have well and truly bounced back in almost every major Australian city, many of us are looking towards property predictions and asking ourselves; “what’s next”? So, is now a good time to invest in property in Australia? Keep reading to find out! 11 reasons why you should invest in Property? 1. More millionaires have been created through property than any other form of investment. Remember, there’s nothing wrong with seeing what successful people do and applying those principles to your own life. If the majority of extraordinarily wealthy people have probably used real estate, there is no reason why you shouldn’t also. 2. Anyone can do it Property investment is not just for the wealthy. It doesn’t really take large sums of money to get involved in real estate. This is because banks will lend you up to 80% against the security of residential property, which means that most Australians with a steady job and a little capital behind them can afford to buy investment properties. 3. Security It’s often said that residential real estate offers the security of ‘bricks and mortar’, but let’s take a closer look at why I believe it’s one of the safest and potentially most profitable investment markets in Australia. 4. Income that grows The rental income you receive from your investment property allows you to borrow and gain the bene!t of leverage by helping you pay the interest on your mortgage. Over the years the rental income received from property investments has increased at a rate that has outpaced inflation. 5. Consistent capital growth Good capital city residential property has an unequaled track record of producing high and consistent capital growth. Over the past 25 years, the value of the average property in all capital cities has doubled in value every eight to 10 years. However, in the short-term, the picture is much more uncertain and confused, and at times capital growth stops and even reverses, as we saw in the early 80s, the early 90s, and in some areas in the most recent slump we experienced in 2008. 6. You can buy it with someone else’s money Sure you need some of your own money – I don’t believe in nothing-down deals, but the ability to use leverage with real estate significantly increases the return on your investment capital and, importantly, it allows you to purchase a substantially larger investment than you would normally be able to. 7. You are in control Property is a great investment because you make all the decisions and have direct control over the returns from your property. 8. Tax benefits Property investors are able to take advantage of a range of tax benefits including tax deductions and depreciation allowances. 9. You can add value There are hundreds of ways you can add value to your property, which will increase your income and your property’s worth. 10. You don’t need to sell it Unlike most other investments, when real estate goes up in value you don’t need to sell in order to capitalise on that increased value. You simply go back to your bank or mortgage broker and get your lender to increase your loan. 11. Most forgiving Even if you bought the worst house at the worst possible time, chances are that it would still go up in value over the next few years. History has proven that real estate is possibly the most forgiving investment asset over time. If you are prepared to hold property over a number of years, it’s bound to rise in value. If you’re looking for a new kind of opportunity beyond shares, fixed income, and traditional property investments, Simply Wealth could help you diversify your portfolio and meet more of your goals by investing in the growing opportunities of real estate. Please contact us for clarification, or further advice, regarding any of the topics covered in this knowledge centre.
How to Build a Multi-Million Dollar Property Portfolio?
If you are looking for a company that can show you: How to invest from as little as $50 per week without using any of your own time How to legally slash your tax bill and never pay the same amount of tax ever again How to pay off your family home in as little as 7-10 years How to protect yourself from rising interest rates and losing your job How to have your rent paid in full and on time, all the time How to create an extra $30,000-$40,000 per year (tax-free) whilst not changing anything you do right now then please read on where we show you our step-by-step system of creating wealth safely and securely, never having to worry about money again. What are your Goals and Dreams? The most important thing about creating wealth or financial security is to first clearly understand WHY you want to? Is it because you want more money, more time, more life, more choices? This is the first step on a journey that will change your life for the better, therefore, it’s important that both you and Simply Wealth Group have all this information clear and upfront so that we can hit the target we are aiming for. It’s all about YOU One of the main reasons to invest is to give YOU more life. It should make life easier, give you more choices, make you feel good about yourself, and help you to sleep easily at night. The idea is to not have an impact on your current lifestyle. This is where we show you how you’ll be able to afford to have a property investment plan working for you without affecting your weekly budget. Accredited Property Investment Selection & Acquisition At Simply Wealth Group, we only offer and recommend the best available property investment opportunities that exactly meet your needs and situation. We monitor the Australian property market daily. With a variety of quality investments available all over Australia, they must first meet our stringent selection criteria of long-term capital growth, strong rental demand, location and amenities, and of course be of high quality. Tailored Property Investment financial structures and strategies We will ensure you receive the best investment funding available. Our Specialist Investment arm will structure and tailor an investment funding package that will best meet your needs. We’ll identify and recommend which loan is the right one for you, working on your behalf to finalize all the details, saving you time and money. We will explain interest rates, application fees, exit fees, refinancing, short-term and long-term flexibility, and how to cleverly leverage equity and cash flow to your advantage (85% of seasoned investors are not aware of this) Expert Property Investment Legal Advice & Services We take the headache out of owning an investment property or adding to an existing portfolio with the right legal advice. Property investing is a specialized legal area, getting it wrong could seriously jeopardize your outcome. We have the best of the best legal experts when it comes to property investing. We show you how to protect your assets and wealth from day one so that your wealth always stays with you and your loved ones. How to legally reduce your Tax and never pay the same tax again We’ll help you through all the complexities and ever-changing taxation laws that are associated with property investing. This is why most investors do not maximize the tax returns available to them. Not all accountants are the same. Our property investment taxation specialists are experts in their field. They’ll provide the appropriate property investment tax advice and ongoing services with regard to your current and future tax position. Coordinating the settlement of your property Unfortunately, this is the one area that people pay very little attention to. It’s this one area that can actually make or break the experience you have when it comes to investing in property. Many take this process for granted and you as the client are always the one that pays the price of having to get involved and having their precious time wasted. We ensure that all parties are coordinated appropriately with minimal fuss and with very little involvement from you. The headache-free Construction Program At Simply Wealth Group, we’ve been proudly helping investors achieve their financial goals and dreams for over 10 years. The knowledge and commitment to quality we have gained over this time have enabled us to streamline the building process, resulting in a hassle-free and enjoyable building experience for you. Whether building one of our innovative home designs or choosing a boutique architecturally designed apartment, our dedicated and professional team has proven time and time again that by using only the best products and materials on the market and constructing homes on time and on budget, we are the market leaders in both quality and service. Keeping you in the know every step of the way We manage the entire project on your behalf so that it is built on time without any delays and therefore put money in your pocket (rent) as fast as possible. When you have constructed and project-managed thousands of properties as we have, you know how to deliver an experience to customers second to none. We update you fortnightly with a progress report. It’s like being on-site, from the comfort of your own lounge room. We work for you, NOT the builder When you buy a car, you want to ensure you are getting what you have paid for. When you go to collect the car, you want to check that the steering wheel comes with the car right? But what about the things you can’t see or don’t know about? At Simply Wealth Group, we ensure you are getting everything you signed up for – without ever compromising on quality. We know every little detail and step that goes into building a quality investment property. Tenant allocation without you lifting a finger We claim to have the
