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Home and business owners impacted by the floods in New South Wales and Queensland can apply to their lender for a three-month loan deferral or reduced payment arrangement. Here’s how to apply if you or someone you know has been impacted.
Another year, another disaster.
In 2019 it was the bushfires. In 2020 it was COVID-19 (which, you know, is still hanging around). In 2021 a mice plague. And now to kick-off 2022 we’ve had half the eastern seaboard inundated with floods.
Fortunately, just as they did for the bushfires and COVID-19, lenders are offering up to three months deferral on loan repayments for those customers affected by the flooding disasters in NSW and Queensland.
“Once the worst of the emergencies are over and the clean-ups begin, we want Australians who have been impacted to know their bank is ready with tailored support to assist as they recover,” says Australian Banking Association CEO Anna Bligh.
“Don’t tough it out on your own. Loan deferral or reduced repayment arrangements for home, personal and some business loans are being offered across individual banks.”
Depending on your family’s or business’s circumstances, assistance from your lender may include:
– Deferring scheduled loan repayments, on home, personal and some business loans for up to three months.
– Waiving fees and charges, including for early access to term deposits.
– Debt consolidation to help make repayments more manageable.
– Restructuring existing loans free of the usual establishment fees.
– Offering additional finance to help cover cash flow shortages.
– Deferring upcoming credit card payments.
– Emergency credit limit increases.
There’s also a range of federal and state government financial grants your household or business might be eligible for, including:
– Australian government disaster recovery payment: eligible individuals can claim $1000 per adult and $400 per child. If you’re in NSW click here, QLD click here. A further $2000 per adult and $800 per child is available for residents in Richmond Valley, Lismore and Clarence Valley.
– Australian government disaster recovery allowance: a short-term payment of up to 13 weeks for eligible people for loss of income. NSW click here and QLD click here.
– NSW disaster relief grant for individuals: financial assistance to eligible individuals and families whose homes have been damaged by a natural disaster. Click here or phone 13 77 88.
– NSW storm and flood disaster recovery small business grant: eligible small businesses can apply here for a grant of up to $50,000 to help pay for the costs of clean-up and reinstatement.
– QLD emergency hardship assistance grant: grants of up to $180 are available per person and $900 for a family of five or more. Click here or call 1800 173 349.
– QLD essential household contents grant: up to $1,765 for eligible single adults and $5,300 for families to replace/repair (uninsured) household contents. Click here or call 1800 173 349.
– QLD structural assistance grant: grants of up to $10,995 for eligible single adults and $14,685 for families for one-off (uninsured) structural home repairs. Click here or call 1800 173 349.
– QLD essential services safety and reconnection grant: up to $200 for a safety inspection and, if required, up to $4200 to repair/reconnect essential services. Click here or call 1800 173 349.
– QLD extraordinary disaster assistance recovery grants: up to $50,000 grants for small businesses that experienced damage from the flooding event. Click here or call 1800 623 946.
Last but not least, it’s also worth noting that there are both refinancing and/or loan restructuring options you can explore in order to reduce your business or home loan repayments each month (without hitting the pause button).
These include:
– asking for a better rate or moving to a lender that can provide one;
– extending the length of your loan; and
– consolidating your debt.
So if your business or household is one of the many doing it tough right now and you need a little breathing space, please don’t hesitate to pick up the phone and give us a call today – we’re here and ready to assist you any way we can.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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With interest rates at record low levels, we’ve seen a big increase in homeowners wanting to refinance this year. So this week we’ll look at some of ASIC’s top tips for refinancing, plus some of our own for good measure.
More and more mortgage holders are looking for a better deal on their home loan.
According to ABS data, the total number of home loan customers who switched providers last year increased by 27% – from 143,664 in 2019 to 182,016 in 2020.
And a further 200,000 Australian families are expected to switch lenders and save in 2021.
But there’s switching lenders the wrong way, and switching lenders the right way.
Fortunately, Laura Higgins, ASIC’s Senior Executive Leader Consumer Insights and Communication, recently shared some important tips with ABC radio, which we’ve compiled for you below.
Here’s the thing about the big banks and home loans: customer loyalty is rarely rewarded.
In fact, the RBA found that for loans written four years ago, borrowers were charged an average of 40 basis points higher interest than new loans.
For a loan balance of $250,000, that could cost you an extra $1,000 in interest payments per year.
“Many times, new customers are offered a better deal than existing borrowers, so if you have a home loan that is a few years old you could potentially get a better deal that saves you thousands of dollars over time,” explains Ms Higgins.
“Even if you’re happy with your current lender, it’s worth checking you’re not paying for features or add-ons you’re not using.”
There are a lot of incentives out there to entice you to switch mortgages quickly, such as cashback offers or very low-interest rates.
But Ms Higgins urges borrowers to closely compare these offers with the long term costs.
“For example, it’s worth doing the maths to ensure a cashback offer still puts you ahead over the long term when considered against other aspects of the loan, like interest rates and fees,” she explains.
“If you decide to switch lenders, you may end up with a longer-term loan.
It’s also important to consider whether lenders mortgage insurance or other costs, like discharge and loan arrangement fees, may be payable.
“These additional costs can outweigh the benefit of a lower interest rate,” she adds.
“A mortgage broker can also help you compare loans and decide whether to switch.”
Which is very true, if we do say so ourselves!
With interest rates so low, many borrowers are aiming to pay off their mortgage faster by making extra repayments.
“Interest rates may be low now, but probably won’t be this low forever. Making some extra repayments now can benefit customers in the long term,” says Ms Higgins.
But if you’re worried about tying up all your funds in your home loan, then you can consider switching to a mortgage redraw facility or offset account, which can allow you to make extra repayments but withdraw them if you need to.
“Either of these options might work for you depending on your goals,” Ms Higgins adds.
“Not all home loans can be linked to an offset account, and often those that can may have a fee charged or a slightly higher interest rate, so it’s worth making sure you’d be saving enough in there to warrant any extra costs.”
Last but not least, a refinancing tip that we think is worth considering in this climate of record-low interest rates (which probably won’t be around forever).
One of the most common ‘big decision’ questions we get asked when it comes to refinancing is: should I fix my home loan rate or not?
But did you know a third option exists?
Yep, you can fix the rate on some of your mortgage, but not all of it.
This allows you to lock in a low rate for a portion of your home loan, while also taking advantage of some of the flexibility that a variable rate can offer, such as the ability to make extensive additional payments.
If you’d like to know more about it – or any of the other refinancing tips in this article – then get in touch today.
We’d be more than happy to help you refinance your home loan, whether that be renegotiating with your current lender or exploring your options elsewhere.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
House prices could jump 17% in 2021 and mortgage rates are set to rise much sooner than expected, ANZ Bank has tipped.
How much earlier than expected?
Well, the Reserve Bank has repeatedly said the official cash rate isn’t likely to increase for a few years, but ANZ senior economist Felicity Emmett believes fixed-mortgage rates have already reached their lowest point, or close to it.
In recent times, more than 30% of new loans have been at fixed rates, says Ms Emmett, with two to three-year fixed-term interest rates available below 2%.
But that’s unlikely to be the case for much longer, she believes.
“In the second half of the year these sub-2%, three-year fixed rates that we’re seeing advertised at the moment are less likely to be around,” says Ms Emmett.
“Cheaper funding is not available forever and that will feed through into variable mortgage rates too.”
Shane Oliver, Chief Economist at AMP Capital, also believes fixed mortgage rates “have already started to bottom out”.
“It’s likely that the 30-year tailwind for the property market of falling interest rates has now run its course and longer dated fixed rates (4+ years) are starting to rise,” adds Mr Oliver.
That’s right. ANZ economists expect house prices to rise by a “sharp” 17% across the capital cities in 2021.
They’re tipping Sydney and Perth to perform best with 19% growth, followed by Hobart (18%), Melbourne and Brisbane (16%), and Adelaide (13%).
ANZ’s forecast is much more bullish than those of Commonwealth Bank and Westpac, which in February predicted price increases of 8% and 10% respectively.
Ms Emmet says low housing stock levels are combining with FOMO (fear of missing out) to help drive up the market.
“Buyers are taking advantage of historically low interest rates, particularly fixed rates, as well as various government support programs,” Ms Emmet said.
After the relative hibernation of last year, there’s certainly a lot going on in the world of property and finance right now.
So, if you’d like to chat to us about financing a new home you’ve got your eye on, or refinancing your existing loan, get in touch today and we’ll help sort out that FOMO for you.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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Stamp duty: two of the most dreaded words in the world of property and finance. Fortunately, NSW and Victoria have unveiled some big changes to the inefficient tax this week, and there’s hope it’ll inspire other states to review their own stamp duty arrangements.
If you’re unfamiliar with stamp duty, it’s basically a state/territory government tax you pay on certain transactions, such as a car or piece of real estate.
How much it costs depends on what state you’re buying in, the value of the property you’re buying, and whether you’re eligible for a first home buyer concession.
The problem is that it’s often regarded as an inefficient tax because it requires a large upfront sum (usually tens of thousands of dollars) from home buyers and therefore disincentivises people from buying and selling property.
It particularly tends to restrict young families who want to upgrade from their first home and downsizers who want to move into a smaller place.
State governments have been slow to overhaul the current system because it’s their biggest source of revenue.
In fact, stamp duty raises about $21 billion a year, including $7.5 billion for NSW and $6 billion for Victoria.
However, with the economy in need of a rebound due to COVID-19, the state governments of NSW and Victoria have made some big stamp duty announcements in their 2020/21 budgets.
NSW has flagged a complete overhaul of the system with a shift towards a property tax, while Victoria has announced short term discounts.
“Reform of the inefficient stamp duty system could create and support thousands of jobs to boost the economy and kick-start our recovery for a prosperous, post-pandemic NSW,” explained NSW Treasurer Dominic Perrottet during the announcement.
And make no mistake: this isn’t just good news for NSW and Victoria.
As the two most populated states in Australia, a move in these property markets may put pressure on other state governments to follow suit sooner rather than later.
Below we’ll outline the announcements in NSW and Victoria, as well as the current state of play around the nation.
The NSW state government will open for public consultation a property tax model that it says will make homeownership more achievable.
NSW Treasury says stamp duty adds $34,000 to the upfront cost of buying the average home and takes an average 2.5 years to save (compared to one year in 1990).
The consultation will begin with a proposed model that would include giving property purchasers the choice between paying stamp duty upfront or opting to pay an annual property tax.
The Victorian government announced it will be waiving 50% of stamp duty on newly-built and off-the-plan homes valued below $1 million.
Existing homes will also be eligible for a 25% stamp duty discount.
The discounts will apply to contracts signed on or after 25 November 2020 and before 1 July 2021.
The ACT has already started phasing out stamp duty and replacing it with a land tax as part of its 20-year tax reform program.
And in Queensland, the Property Council of Australia says it’s time to review property taxes following NSW’s bold move.
Queensland Treasurer Cameron Dick, however, has ruled out announcing a similar scheme ahead of this year’s state budget on December 1.
In the meantime, most states are offering concessions and exemptions for first home buyers, and some may even follow Victoria’s broader discount waiver over the short term.
Here’s where you can go to find out more about first homeowner concessions and exemptions for NSW, Victoria, Queensland, Western Australia, and Tasmania.
If you’re interested in further exploring some of the stamp duty exemptions, concessions, waivers or discounts, please don’t hesitate to reach out.
Obviously, the less stamp duty you pay, the more of your money you can put towards a home loan deposit.
So for a hand figuring it all out, please get in touch – we’re happy to help you crunch the numbers.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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We dream big in Australia. So it’s little surprise that when the Great Australian Dream becomes a reality it means bigger houses than anywhere else in the world, according to a new report.
In 2019/20, the average new house built measured a whopping 236m2, up 2.9% on the year before and the biggest size increase in 11 years.
That’s according to data commissioned by CommSec from the Australian Bureau of Statistics, which shows our houses are now being built bigger than anywhere else in the world.
In fact, we just reclaimed the number one spot from the US, which saw their new house size fall for the fourth consecutive year in 2019 (latest data) to 233m2.
Apartment sizes have grown too, with the average new apartment increasing 6% in the last year to hit a decade high of 137m2.
It’s important to note that new houses aren’t the biggest they’ve ever been.
That time was 11 years ago when the average new free-standing house was about 244m2 – then the biggest in the world by far.
Australia relinquished the number one spot to the US a few years later in 2013.
But despite the average new house size shrinking throughout the majority of the 2010s, new houses are still a whopping 27% bigger than they were 30 years ago.
And last year Australian new-builds jumped up in size as US house sizes dipped – putting us back in number one spot.
“Over the past year there appears to have been a perception that Australian homes had shrunk a little too much,” explains CommSec chief economist Craig James.
There have been numerous shifting trends in terms of house sizes and styles over the past decade, and COVID-19 is sure to throw another element into the mix.
More people could embrace working from home – opting to move away from apartments in, or near, the CBD in preference for larger homes in regional or suburban areas.
Another factor that could increase the size of new homes over the year to come is the federal government’s $25,000 HomeBuilder grant.
The federal government scheme aims to assist owner-occupiers (including first home buyers) who want to buy a new home or begin work on eligible renovations, by providing them with a $25,000 tax-free grant.
It’s available to people building a new home for less than $750,000, or to those who spend between $150,000 and $750,000 renovating an existing home, subject to an eligibility criteria.
The $25,000 grant has led to a recent surge in new builds and renos, and will no doubt also assist in helping Aussie families build bigger and better new homes.
So if you’re thinking of fulfilling your own Great Australian Dream in the near future, then get in touch today. We’d love to help you make it become a reality.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Thousands of families across the country who had been thinking about a new build, or tackling an overdue renovation project, have rolled up their sleeves and committed to it, according to latest ABS data.
And to be honest, we’re not overly surprised. The federal government’s $25,000 HomeBuilder grant is nothing to sneeze at.
But the Australian Bureau of Statistics’ (ABS) Lending Indicators data makes for very encouraging reading nonetheless.
It shows the total value of new loan commitments for housing rose 12.6% in August to $21.3 billion.
There was also a big increase in people seeking to renovate their homes. ABS building approval data shows the value of alterations and additions to residential buildings (‘renos’) increased by 7% to $784 million in August.
That’s the highest level recorded since April 2016.
But before we get into HomeBuilder, let’s look at the home lending figures in a little more detail.
Of that $21.3 billion in new housing loan approvals we mentioned earlier, $16.3 billion was comprised of owner-occupier home loans, and there was $5 billion worth of investor loans.
That means owner-occupier home loan commitments increased by 13.6% in August, which is the largest month-on-month rise recorded by the ABS, and eclipses the previous record of 10.7% set in July.
The Housing Industry Association (HIA), which is the official peak body of Australia’s home building industry, says that HomeBuilder is to thank for the surge in demand.
They point out that in August the number of loans for the construction of a new dwelling increased by 22.9% to 4,679 – the highest level in over a decade.
“The short-term stimulus from HomeBuilder is emerging in the housing finance data released by the ABS,” says HIA’s Chief Economist, Tim Reardon.
“There has been a substantial improvement in sentiment and confidence in the housing market.”
The federal government scheme aims to assist owner-occupiers (including first home buyers) who want to buy a new home, or begin work on eligible renovations, by providing them with a $25,000 tax-free grant.
It’s available to people building a new home for less than $750,000, or to those who spend between $150,000 and $750,000 renovating an existing home, subject to certain eligibility criteria.
You can find out more about the scheme and eligibility here, but here’s the big catch: applications for the HomeBuilder grant must be received no later than 31 December 2020.
So if you’re interested in applying for the scheme, you’ll want to get in touch with us asap.
Not only can we walk you through how to apply for it before the deadline but, just as importantly, we can assist you when it comes to applying for finance.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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Like most sequels, JobKeeper 2.0 won’t be as big a blockbuster as the original. But that’s not to say it won’t help many SMEs navigate the difficult times ahead. Today we’ll cover what you need to know about making the transition for your business.
It’s hard to believe that JobKeeper 2.0 is due to begin next week.
But it’s actually been half a year (or 13 fortnightly payments) since the scheme was first launched, over which time around 42% of small businesses have accessed it, according to a MYOB survey.
Today we’ll look at whether your business might be eligible for JobKeeper 2.0, and if not, some other potential options that might be worth considering instead.
The first extension will cover seven JobKeeper fortnights between 28 September 2020 and 3 January 2021.
The rates of the JobKeeper payment in this extension period are:
Tier 1: $1,200 per fortnight (for eligible employees or business partners who worked 80+ hours within a four week designated period)
Tier 2: $750 per fortnight (all other eligible employees and eligible business participants).
To claim JobKeeper payments for this period, you will need to show that your GST turnover has declined in the September 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019).
But here’s the good news just in: if the quarter ending 30 September 2019 is not an appropriate comparison period, you may be able to use the alternative tests, the ATO has just confirmed.
These alternative tests are broadly in line with the original seven alternative test circumstances, and cover businesses that started after the comparison period, had a substantial increase in turnover, had an irregular turnover, or were affected by drought or a natural disaster.
The key difference this time around, however, is that the tests must be applied on the basis that the turnover test period is a quarter (rather than the choice between a month or quarter, which you had for the first version of JobKeeper).
If your business is no longer eligible for JobKeeper, please know there may be other financing options available to assist you through the coming period.
One option to explore is the federal government’s Coronavirus SME Guarantee Scheme, which allows lenders to provide eligible SMEs unsecured loans more cheaply and more freely than regular business loans.
Another potential option is something like invoice financing, which brings forward payment of your invoices so you have cash in hand sooner, rather than having to wait for your client/s to cough up the cash.
But to be honest, there’s a whole range of possible routes available, some of which might suit your business, others that won’t.
To discuss your options, your best bet is to get in touch with us today so we can sit down with you and see if we can help you work out a path moving forward.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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Strap yourself in: Australian house prices are tipped to experience a mild COVID-19 dip before surging 15% over the following two years, according to some of the nation’s top economists.
And in more good news for homeowners, RBA Deputy Governor Guy Debelle has hinted at further reductions to interest rates, while not going into negative territory.
Both NAB and Westpac economists have been quick to jump on board the rate cut hype train, predicting the RBA could cut the cash rate by 15 basis points to a record low 0.10% as early as October.
Westpac’s Chief Economist Bill Evans and Senior Economist Matthew Hassan believe house prices are set to bottom out by June 2021 after a further 2.3% fall – which would mean a total fall of 5% from the peak in April.
But the good news is they’re tipping prices to bounce back hard and fast across the country.
Indeed, the duo expects national dwelling prices to “surge” 15% until mid-2023, or 7.5% per year, led by massive gains of 20% in Brisbane and 18% in Perth.
Sydney (14%), Melbourne (12%) and Adelaide (10%) wouldn’t miss out on the action, either.
If it plays out as predicted, we could see a cumulative increase in national prices of 10% from pre-COVID highs over a three year period.
“This recovery will be supported by sustained low [interest] rates, which are likely to be even lower than current levels,” Mr Evans says.
Such a rebound would also be assisted by ongoing support from regulators, substantially improved affordability, sustained government fiscal support, and a strengthening economic recovery.
Mr Evans adds the recovery would be further aided “once a vaccine becomes available, which we expect in 2021″.
For those who are confident in their financial circumstances at present, Westpac’s housing market prediction certainly makes it a tempting time to buy, especially if another RBA cash rate cut soon comes to pass.
So if you’re looking to add to your property portfolio, looking for a change of scene, or keen to buy your first home and break into the market, get in touch today.
We’re here to help you find a loan that’s just right for you.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
The majority of property investors are remaining upbeat despite COVID-19, with 67% believing now is a good time to invest in residential property, according to a new survey.
The 2020 PIPA Property Investor Sentiment Survey gathered insights from nearly 1,100 property investors in August, with the key finding that the majority of property investors remain optimistic about the months ahead.
Indeed, two-thirds of investors who participated in the survey said they believe now is a good time to invest in residential property.
Additionally, 77% of investors said any concerns about potential falling house prices won’t cause them to put their investment plans on hold.
Tim Lawless, head of research at CoreLogic, the nation’s largest provider of property information and analytics, echoed the investors’ positive sentiments earlier this month.
“Through the pandemic to date, housing values nationally have slumped by only 2% and housing activity has trended only about 5% lower than a year ago over the past three months,” Mr Lawless said.
“For people with confidence in their own financial circumstances and household balance sheets, arguably this is a good time to be considering a home purchase thanks to the low cost of debt and certainty that rates will remain low for at least the next few years.”
Well, almost half of the investors surveyed by PIPA (44%) said they are looking to purchase a property in the next six to 12 months.
“Plus, about 71% of investors have indicated that the pandemic has made it less likely they will sell a property over the next year, which is another factor that will help to underpin property prices,” added PIPA Chairman Peter Koulizos.
It seems many property investors are beginning to look further afield.
More than 40% of those surveyed intend to buy an investment property in a different state or territory to the one that they currently live in.
Queensland is definitely in the sights of investors, with 36% saying it offers the best investment prospects over the next year, followed by Victoria (27%) and New South Wales (21%).
But it’s not just investment properties that respondents were keen on interstate.
One in six investors (17%) said the pandemic has made them consider moving to another location altogether, with regional areas set to benefit the most due to the improved lifestyle factors they offer and an increasing ability to work from home.
Investors indicated their top locations to migrate were regional NSW (21%), regional Queensland (18%), Brisbane (16%) and regional Victoria (14%).
Coastal locations, in particular, are on the rise – up to 12% from 8% last year.
As mentioned above, for those who are confident in their own financial circumstances, now can certainly prove a tempting time to buy.
So if you’re looking to add to your property portfolio, looking for a change of scene, or keen to buy your first home and break into the market, get in touch today.
We’re here to help you find a loan that’s just right for you.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Home sellers across the country are lowering their price expectations in droves, new data reveals. But which two capital cities have seen the highest percentage of sellers discount their asking price?
Here’s an exciting stat for all you property bargain hunters out there: the percentage of sellers dropping their asking price during COVID-19 has more than doubled in our capital cities across the country, new Domain data shows.
So which two cities have seen the biggest increase in sellers offering discounts?
Well, the head-and-shoulders leader is Sydney, followed by Melbourne, with Adelaide only just nudging out Brisbane and Perth in a photo finish for third.
But all cities are offering median discounts between $22,000 and $50,000, which we’ll look at below.
Prices dropped on one-in-seven (14.7%) Sydney properties for sale last month, almost a threefold increase from the 5.3% of sellers who offered discounts a year earlier in July 2019.
In Melbourne, the percentage of sellers dropping their asking price during the COVID-19 pandemic increased nearly four-fold from 3.1% in July 2019 to 11.5% in July 2020.
Adelaide recorded the next highest discount figure at 10.1%, up from 3.1% last year, while in Perth the percentage of discounters almost doubled to 10% from 5.3%.
Brisbane followed closely with an increase to 9.7% from 4.4%, Canberra increased to 8.6% from 6.3% and Hobart to 5.4% from 2.8%. Darwin was the only capital to record a slight drop – with 5% of sellers offering a discount this year, compared to 5.5% a year earlier.
With most capital cities offering a median discount around 4-5%, the savings you could receive on a median-priced property in each city are: $49,150 in Sydney, $35,254 in Melbourne, $26,810 in Brisbane, $26,210 in Canberra, $24,553 in Perth, $24,351 in Hobart, $23,745 in Darwin, and $22,121 in Adelaide.
But remember, that’s just the median. Better (and worse) discounts are sure to be found.
The percentage of listings with discounts from July 2019 to July 2020:
Sydney: Increased from 5.1% to 14.7%
Melbourne: Increased from 3.1% to 11.5%
Adelaide: Increased from 3.1% to 10.1%
Perth: Increased from 5.3% to 10%
Brisbane: Increased from 4.4% to 9.7%
Canberra: Increased from 6.3% to 8.6%
Hobart: Increased from 2.8% to 5.4%
Darwin: Dropped from 5.5% to 5%
Now, it’s important to note that the value of the discounts isn’t increasing – just the percentage of properties offering discounts.
Domain senior research analyst Dr Nicola Powell explains: “We’re seeing a broader slowdown in properties, rather than prices tanking, which is good news.
“And I think we’ll continue to see price weakness but the falls to date have been minimal and they’ll stay that way, rather than some of those outrageous predictions we saw at the start of COVID-19 of 30% falls.”
Have you recently stumbled across a discounted property that’s too hard to ignore?
If so, get in touch today and we can help you get your finances in order and apply for a home loan. The lending market can be a little tricky to navigate at present, but rest assured we’re here to help guide you through it.
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