Home Loan Rates Trend Upward
Canstar has reported on the various movements in home loan rates among Australian lenders for the week of May 6 to 13. Great Southern Bank raised two owner-occupier and investor variable rates by an average of 0.05%. Across the industry, no variable rate reductions were reported. In terms of fixed rates, nine lenders increased a significant 183 owner-occupier and investor fixed rates by an average of 0.40%. Conversely, four lenders cut 64 owner-occupier and investor fixed rates by an average of 0.23%. You may read the whole article here:https://bit.ly/4aiFbqL
Tax Cut Windfall Boosts Savings
More than a third of Australians are preparing to boost their savings with the extra cash from the upcoming stage 3 tax cuts, indicating a strong preference for financial prudence in response to economic pressures, according to NAB. “Despite cost-of-living pressures, Australians have been prioritising their savings wherever possible over the last year or so,” said Paul Riley (pictured above), NAB personal banking executive. You may read the whole article here:https://bit.ly/4bBG66S
Australia Faces Housing Shortfall
Mike Zorbas, CEO of the Property Council, shared a dire prediction last week from the National Housing Supply and Affordability Council, indicating that by 2029, only 943,000 of the needed 1,200,000 homes will be built, pointing to a severe upcoming deficit in housing supply that threatens to intensify the affordability crisis. Proposed solutions for systemic improvement The council’s recent report, “State of the Housing System 2024”, outlined 10 areas to enhance the housing landscape. These include increasing social housing investments, enhancing rental market conditions for tenants, boosting construction sector capacity, enhancing the efficiency of land use and planning systems, increasing data availability, and tackling region-specific housing challenges. There are also improving housing outcomes for First Nations, assessing the appropriateness of the national housing target, and ensuring that Australia’s taxation system supports housing supply and affordability. “In the report’s own words, we need more housing of all types – social housing through to market homeownership,” Zorbas said in a media release. You may read the whole article:https://shorturl.at/bhyE1
Millennials Embrace Rentvesting Trend
Investors, particularly millennials, are increasingly embracing rentvesting – buying properties to rent out while continuing to rent themselves – fuelled by low vacancy rates and soaring rents in the property market, according to James Chase Buyer’s Advocacy. Millennials drive growth in rentvestingABS reported a significant 21.5% increase in the value of new investor loans this February compared to last year, with these loans accounting for more than half of the annual growth in new loans. Surprisingly, it is not older generations but millennials who are leading this investment surge, increasingly opting for rentvesting due to its flexibility and wealth-building potential. “We’re seeing a surge of millennial clients who are eager to enter the market through rentvesting,” said George Cherchian of James Chase Buyer’s Advocacy. “They do their research and they’re not afraid to make bold moves if the numbers add up.” You may read the whole article:https://shorturl.at/hkFIP
Victorian Homebuyer Fund to End Next Year
The state government has earmarked an additional $700 million for its shared equity home buying scheme for its final year. On Tuesday (7 May), the Victorian state government handed down its state budget for 2024/2025, revealing that the Victorian Homebuyer Fund will cease after next year. Presented by State Treasurer Tim Pallas MP and Premier Jacinta Allen, the budget sets out the funding for the state government for the next year. Several of the key initiatives target the cost of living and supporting home buyers. This is being done through a range of measures, including allocating funding to “promote more modern methods of construction, such as modular or prefabricated builds” and: 1. Providing $197 million to continue support for people experiencing or at risk of homelessness, including grants for homelessness services, accommodation for people with complex needs, and crisis response services.2. Using $114 million to remove cladding identified as posing unacceptable risk from residential buildings.3. Investing $107 million to progress the government’s housing agenda, including $20 million to build roads and enabling infrastructure to unlock government-owned land in East Werribee.4. Investing $63 million to address systemic issues within the building sector, including strengthening the Victorian Building Authority.5. Using $19 million to improve response times for repairs and maintenance in social housing. You may read the whole article here:https://shorturl.at/bQ368
RBA Unveils Rate Decision for May
The monetary policy board has made its decision for the official cash rate for the month. The Reserve Bank of Australia (RBA) has opted to maintain the cash rate at 4.35 per cent. Following discussions on the 6-7 of May, the monetary policy board announced its final rate decision for May this afternoon (7 May), revealing that it will be holding the official cash rate at its current level. The last time the cash rate moved was in November 2023, when the RBA lifted rates for the 13th time since the tightening phase commenced in May 2022. ‘Board not ruling anything in or out’ In the post-meeting statement by the RBA, the board stated that, in the near term, inflation is forecast to be higher because of the recent rise in domestic petrol prices, and higher than expected services price inflation, which is now forecast to decline more slowly over the rest of the year. The monetary policy decision reads: “Inflation is, however, expected to decline over 2025 and 2026… You may read the whole article here;https://tinyurl.com/8a3wzx5a
Rents Surge to Record Levels
Eliza Owen, head of residential research at CoreLogic, reported on the latest trends in Australia’s rental market, highlighting a significant rise in median weekly rent values, now at a record $627 across all dwellings. The increase spans from Sydney’s top rate of $770 per week to Hobart’s $547, marking a new pinnacle in the rental landscape, Owen said in CoreLogic’s latest Pulse article. Accelerating rent growth in early 2024 Following a period of relative stability, rent growth has picked up speed again at the start of 2024, with the national annual rent growth increasing from 8.1% in October 2023 to 8.5% in April. Even in areas where rents had previously been declining, such as Canberra and Hobart, there is now evidence of stabilisation and growth. You may read the whole article here:https://bit.ly/44xWti9
Australia’s New Housing Loans Surge – ABS
The value of new housing loans in Australia surged by 17.9% annually, reaching $27.6 billion after a 3.1% growth just in the month of March, the Australian Bureau of Statistics (ABS) has reported. “The value of new loan commitments is a product of the size of loans being approved and the volume of loans,” said Mish Tan (pictured), ABS head of finance statistics. “The rise in the value of new home loans over the past year reflected increases in the average loan size, in line with rising house prices over the same period. “Meanwhile, in original terms, the number of loans reaching the final commitment stage is broadly similar to a year ago.” You may read the whole article here:https://tinyurl.com/56jytta5
Melbourne CBD Retail: Businesses Return, Vacancies Tighten
Celebrity chef Michael Lambie had been looking for a venue to open a new style of restaurant for a year and a half before he chanced on the perfect site at the perfect time – a renewed blaze of confidence in the Melbourne CBD. “It just felt that the time was finally right,” said Lambie, the luminary behind Melbourne icons Stokehouse, Circa the Prince, Taxi Dining Room, Lucy Liu and The Smith. “To open up in Melbourne right after COVID would have been suicidal and I wanted to allow some time for the economy to recover. “But it now feels that Melbourne is bouncing back, with a lot of new businesses opening. I’m in the city most days and the really good places are really busy, so the money is definitely there. You just have to be good enough to persuade people to spend.” You may read the whole article here:https://tinyurl.com/3b2djce5
Australia in Top Four for House Price Growth
Australia has secured a position among the top four nations globally for house price growth over the past five years, according to new data from the International Monetary Fund. Significant growth post-inflationData from the IMF revealed that after adjusting for inflation, Australian house prices have seen an increase of over 10% since 2019. This places Australia behind only the US, the United Arab Emirates, and Japan in terms of real house price growth. Experts predict continued riseThe Australian Financial Review’s latest quarterly property survey anticipated further price increases. A panel of 10 experts forecasts a national growth rate of 5% for the coming year, with Perth expected to lead with a significant 16% increase in 2024, Hotspotting reported. You may read the whole article here:https://bit.ly/3UJz9Ln
