Much has been written recently by the RBA, banks, rating agencies and financial commentators regarding the “looming crisis facing home owners and investors” as Interest Only Loan terms expire.
Back in 2010 when the great majority of ten year interest only loans were written, home owners would seek an equity release secured against the family home to pay the deposit on an investment property they were seeking to purchase.
Property “flipping” isn’t as popular as it once was in Australia, according to a new report from CoreLogic.
Yes, the process of buying a home, putting a lick of paint on the walls before attempting to sell it for a profit isn’t growing in popularity — despite an influx of television shows showing Australians how to do it each and every night — driven lower by high, and in many instances increasing, transactional costs.
Retirees are relying less on the family home as a sore of wealth in retirement, strengthening the argument to end tax rules that favour home ownership over other assets, a new report by think thank AHURI says.
The share of owner-occupied housing in a retired household's asset portfolio fell from 46 per cent in 2002 to 39 per cent in 2015. Over the same time, property other than the family home grew to become the third-largest component of pre-retirement portfolios in 2014 from the fifth-most valuable in 2002.
It’s intuitive that housing market conditions would have a close relationship with credit flows; when funds are flowing freely and rates are low, home buyers and investors step up their presence in the housing market and when credit is harder to come by or more expensive, things slow down.
Since 2015, things have become a bit more complex, and the correlation between dwelling value appreciation and housing credit has become tighter; especially when measured against investment credit.
Australians are increasingly choosing to stay in rented houses or rented serviced apartments when they travel. Some 10.4% of travelers stayed in this type of accommodation on their last trip according to Roy Morgan travel research conducted in the year to March 2018. This is substantially higher than a decade ago when only 7.1% stayed in rented accommodation.
Across Australia, prices have increased by 6.3% over the year. Over the past quarter, however, we have seen a significant slowdown. Sydney and Perth are experiencing the biggest declines, yet there is a very different outlook for each.
The recording of payment histories is now well underway in Australia.
This means that credit files will contain a lot more information about a person’s credit behaviour, one of the more controversial being the ability for a credit provider to record late payments. In the past, a credit provider could record a payment default given an account was more than sixty days late, however now they are able to record a delinquent payment in as little as 14 days after the account falls due.
Reserve Bank of Australia governor Philip Lowe has warned households may find it harder to get home loans and borrowing costs could be higher as a result of the bad behaviour of banks being exposed in the Hayne royal commission. These shock predictions have recently been confirmed as several bank and non-bank lenders have increased variable interest only rates out of cycle again despite recent moves by APRA to discontinue their earlier imposition of speed bumps on interest only lending.
NAB’s latest residential property survey is out, and includes an update on which Australian suburbs are set to outperform over the next 12 months.
The quarterly survey of around 300 property professionals for Q4 2018 shows housing sentiment across Australia’s capital cities held steady at a reading of +20 — above the long-term average of +14.
But in the wake of the recent Sydney-led slowdown in the housing market, sentiment declined in NSW and Victoria. Those falls were offset by a sharp increase in the outlook for SA/NT, while WA also improved.
Within the headline numbers, the property experts surveyed also outlined which suburbs they think are more likely to enjoy above-average growth.
With the passing of the downsizer superannuation contribution (DSC) legislation in December, Aussies have one more tactic they can use to plan a successful retirement.
Effective from July 1, the cap is designed for people downsizing from their main residence, though it can be used in much wider circumstances. The downsizer cap is in addition to the other caps, and is available regardless of the amount of money the member already has in super.
However, the downsizer cap can only be used once, and the maximum amount that can be contributed under the cap is $300,000 or the actual sale proceeds from the property, whichever is less.