This Week in Real Estate: 2 Dec 2017

By December 2, 2017News

"First-Home Buyer Numbers Up 5.6%": Bankwest

First-home buyers accounted for 94,000 home purchases in the year to August 2017, the highest figure since June 2015.

A new national report from Bankwest reveals this is a year-on-year increase of 5.6% and the figure accounts for 14.3% of all purchases over the same period.

The 2017 Bankwest First Time Buyers Report also shows it was taking first home buyer couples two months longer on average to save for a deposit on a house, a trend seen in every major city except Perth and Darwin.

Perth’s house prices have dropped 4.3% which means (based on a median purchase price of $515,000), the saving time to get a 20% deposit of $103,046 (down $4,627 from 2016) has dropped by three months, says Bankwest

Solid Demand Continues for Sydney & Melbourne

Listed developer AVJennings has refuted talk of a price correction in east coast markets. CEO Peter Summers says Sydney and Melbourne will be underpinned by solid demand.

Summers says that although price growth rates will moderate, the number of new homes built will stay strong given “significant demand” for housing after a period of underbuilding.

“Any time you get a sustained period of that strength [in prices] you would expect that the growth rate would moderate,” says Summers. “But that doesn’t mean we think markets will go backwards. We don’t think that at all.”

The comments come as price growth in the two biggest cities eases. Brisbane is starting to look cheap in comparison, he says, and resources-affected states will become better-placed to compete with maturing states.

Quote of the week

“For a lot of people it’s a very daunting conversation to have, as there’s that chance of rejection. But if you don’t ask, you won’t get it, so it’s worth asking as you could save tens of thousands of dollars.”
Finder money expert Bessie Hassan

Want An Interest Rate Deal? Just Ask

A survey by finder.com.au has found about 45% of homeowners are not requesting a lower interest rate when applying for a loan. Yet discounts are given to 75% of people who ask, Finder money expert Bessie Hassan says.

In NSW, an average owner-occupier mortgage is $433,800, with interest at the standard 4.73%. A 0.2 points discount could potentially save a homeowner $52 a month or $18,698 over a 30-year loan.

Of the 1,300 homeowners with a mortgage who were surveyed last month, 9% didn’t know they could ask for a discount, while a further 36% simply did not bother to ask.

A third said they had been successful in negotiating a lower interest rate, another 10% tried and failed, while 12% were offered a discount up front.

RBA Upbeat About Economic Outlook

Investor mortgage lending rose 4.3% in August, higher than the 0.9% rise in owner-occupier loans.

ANZ senior economist Daniel Gradwell said the monthly increase in investor lending was the largest since APRA told the biggest banks to limit interest-only lending to 30% of new mortgages.

The rise merely offsets the fall in the previous month, and investor borrowing is still lower than it was earlier this year, said Gradwell. “In annual terms, investor growth of 6.5% is well below the peak of 26% recorded in January.”

Demand for interest-only loans has dropped so substantially that some banks are reducing their rates to try and entice more borrowers.

Earlier in the year, banks lifted their rates on interest-only loans to deter that type of borrowing and comply with APRA’s conditions.

Jobs Growth Looks Promising

The latest data from SEEK Employment trends shows job ads rose 16.1% compared to the same time last year. Of the 29 industries on SEEK, 28 experienced year-on-year growth, suggesting that employers are looking beyond the holiday season and into the New Year.

“Advertising on SEEK is booming,” says Michael Ilczynski, Managing Director for SEEK Australia and New Zealand. “This October we saw the largest rate of annual job ad growth so far this year.”

The strongest job opportunities were found in the industries of trades & services, information & communications technology, healthcare & medical, manufacturing, transport & logistics, real estate & property and mining, resources & energy.

Advertising, arts & media was the only industry to record a year-on-year decline.

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