Resources: Market Update

WHAT'S GOING TO HAPPEN TO RATES.

Posted 21/03/09

As we approach the April RBA meeting, some of the major banks are forecasting a cut in interest rates of 0.25%.

With a rise in unemployment, a fall in non-private dwelling and commercial property construction this could be enough to help tip the RBA's hand on another rate cut.  However if the information that comes through is as positive as January then there's every chance a rate cut might be put on hold.

Shane Oliver of AMP Capital expects the RBA to bring the cash rate down and over time all the way down to 1.5%.

"We were looking at a low of 2.25% but now I think rates are going to go down even lower, to 1.5%. Assuming the banks will pass this rate cut in full; this would bring down the standard variable rate to 4.15%."

He also went on to say that borrowers should be cautious and borrow conservatively because interest rates will eventually rise again.

BANKS OFFER HOLIDAY REPAYMENTS.

Posted 21/03/09

The CBA Australia's largest lender has just offered a home loan repayment holiday to customers who lose their jobs as a result of the global economic downturn.

 "We wanted to work with any of our customers who become unemployed, and so we're offering them the opportunity to have a six month and up to twelve month repayment holiday on their home loan" the spokesman said.

The term of the loan would be extended, interest would still capitalise and repayments would recommence once the holiday period ended.

An ANZ spokesman said "We're looking at how we extend and formalise those and we certainly hope to be in a position in the near future to announce an extended hardship package, particularly for those who face unemployment,"

National Australia Bank said "This is something we've been doing for quite some time, so in regards to the CBA announcement we've been offering that for a while,"

SPLIT HOME LOANS.

Posted 17/03/09

In these times of economic uncertainty split home loans are becoming more and more popular for those who want to hedge their bets on future rate changes.

A split loan allows borrowers to insulate themselves from rate increases by fixing a percentage of their loan, this enables that fixed amount to remain constant.  The balance of the loan is then taken out as a variable to partially protect them from rate decreases.  Most borrowers choose a 50/50 split and the ability to customise these percentages is an added bonus allowing repayment plans to be tailored to suit individual needs.

Apart from the security and flexibility a split loan offers, it also brings together the benefits of a fixed and variable rate into a single home loan.

They are great for those on a tight budget but importantly help take the stress out of borrowing during rate fluctuation periods.


TIPS ON COPING WITH MORTGAGE STRESS.

Posted 12/03/09

No matter how much you plan for things in life often unexpected events can happen at the very worst time.  Redundancy, illness and an unforeseen bill can place you under financial pressure and mortgage stress when you least expect it.

Here are some quick tips to ease the stress:

Analyse your current financial position detailing your income against your expenses.

Record your day to day expenses and decrease your present commitments.

Choose a home loan that matches your changing lending needs.

Consider refinancing or consolidating your debts to help you achieve your desired results.

Importantly if you are struggling don't leave it too late.  Speak with one of our home loan consultants to give you professional support surrounding your mortgage.


FIRST HOME BUYERS UNDERPIN THE PROPERTY MARKET.

Posted 12/03/09

According to recently released data from the Australian Bureau of Statistics (ABS) the housing finance market is motoring along and not showing any signs of slowing.

Increasing their market share and supporting the owner occupier numbers, first home buyers in January accounted for 26.5 per cent of all owner-occupier written loans, up from 25.7 per cent in December.

These figures courtesy of incredibly low interest rates and the first home buyer boost have pushed the number of written loans to first home buyers to the highest levels in 18 years.

Finance minister Lindsay Tanner said yesterday that whilst the government had acknowledged the success of the grant an extension to it would depend largely on a tough May Budget.


A SNAPSHOT OF SUBURBS WHERE IT IS CHEAPER TO BUY THAN RENT.

Posted 06/03/09

The dream of home ownership is back in vogue as rates fall to the 1960's levels. 

RP Data commissioned by the Commonwealth Bank of Australia have just released a report detailing suburbs across Australia where the monthly cost of a mortgage repayment on both houses and units is less than the monthly rental.

Here is a list of the top three in every state and territory and the monthly saving.

NSW
Rosehill
$504 per month cheaper to buy an apartment than rent.
Regents Park
$162 cheaper per month to buy an apartment than rent.
Haymarket
$127 cheaper per month to buy an apartment than rent.

QLD
Beachmere
$370 per month cheaper to buy an apartment than rent.
Highland Park
$367 cheaper per month to buy an apartment than rent.
Sippy Downs
$348 cheaper per month to buy an apartment than rent.

Victoria
Yallourn North
$105 cheaper per month to buy a house than rent.
Murtoa
$75 cheaper per month to buy a house than rent.
Irymple
$71 cheaper per month to buy an apartment than rent.

ACT
Hackett
$267 cheaper per month to buy an apartment than rent.
Curtin
$198 cheaper per month to buy an apartment than rent.
Farrer
$151 cheaper per month to buy an apartment than rent.

NT
Ludmilla
$386 cheaper per month to buy a house than rent.
The Gap
$159 cheaper per month to buy a unit than rent.
Gillen
$89 cheaper per month to buy a house than rent.

SA
Gilles Plains
$230 cheaper per month to buy an apartment than rent.
Whyalla Playford
$129 cheaper per month to buy an apartment than rent.
Whyalla Norrie
$63 cheaper per month to buy a house than rent.

WA
Baynton
$3877 cheaper per month to buy a house than to rent.
South Hedland
$2388 cheaper per month to buy a house than to rent.
Dampier
$2049 per month cheaper to buy a house than to rent.

Phil Naylor, CEO of the MFAA said "First time buyers are an incredibly important element of the housing industry and any comeback in the housing industry is reliant on new entrants and people purchasing their first home."

"Figures released in February show that first home owner loans made up 25.4 per cent of all loans in December compared with 17-18 per cent before the Grant was increased. This means that the proportion of first time buyers is at its highest level since 2001."

Real estate agents and mortgage brokers alike are all saying that the incentive is bringing first home buyers back into the market.  It all points to an interesting couple of months to see if the grant will be extended. 
 

RBA LEAVES RATE ALONE.

Posted 03/03/09

The Reserve Bank has left the cash rate at 3.25%, the lowest since 1964 as it waits for the full impact of a shift in monetary policy to become apparent.

RBA Governor Glenn Stevens said ''Market and mortgage rates are at very low levels by historical standards and business loan rates are below recent averages, reducing debt-servicing burdens considerably,''

The pause comes after the RBA has cut 4% from interest rates since September.