Archive for the ‘Home Loan’ Category

Dec

2

2010

Investors keen to re-enter property market

Author: nobelfinance

Affordability has improved considerably since the beginning of the year, a new report has found.

According to Rismark and RP data’s Hedonic Home Value Index, Australia’s housing market flat lined in second half of 2010 – improving affordability issues.

Since the market started turning at the end of May, Australia’s capital city home values have declined by a total of 1.0 per cent seasonally-adjusted.

Over the September quarter, Australian capital city home values declined by just 0.4 per cent seasonally-adjusted.

RP Data’s senior research analyst, Cameron Kusher commented that with market conditions expected to be flat for the remainder of 2010, astute investors should now look for opportunities to enter into the market.

“Early signs suggest that rental rates are once again improving, listings are at above average levels, and leading indicators such as time on market and vendor discounting are creeping up,” Mr Kusher said.

“For those active in the market there is increasing scope for price negotiation and less competition amongst buyers with an above average number of properties for sale. These conditions are likely to afford opportunities to purchase property at more competitive prices.”

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Nov

23

2010

Top NSW suburbs for real estate revealed

Author: nobelfinance

Property investors that are looking for good price growth need to buy in the inner city, a new report has found.

The latest property report by PRDnationwide found that seven out of the top ten New South Wales suburbs recording the most growth in sales activity are located within a 20 kilometre radius of Sydney CBD.

Oatlands, 23km north of Sydney, topped the list recording 160 per cent growth in property sales between 2009 and 2010.

Sylvania Waters came a close second recording 156.3 per cent growth in sales activity, with 41 houses sold over the year – up from 16 the year before.

“The areas experiencing the greatest growth in sales offer a high degree of amenity and are well serviced by transport corridors,” PRDnationwide managing director Jim Midgley said.

“The New South Wales suburbs experiencing the highest growth in sales activity are typically situated in areas with easy access to the Sydney CBD through major road networks or train lines,” he said.

“These areas have a propensity for strong price growth as demand increases for properties nestled along major transport corridors.”

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Nov

16

2010

Australia is fifth in the world in property price growth

Author: nobelfinance

Australia’s property price growth is the fifth best in the world, according to a new report.

The latest Knight Frank Global House Price Index found house prices rose by 18.4 per cent in Australia throughout the year to June 2010.

Singapore enjoyed the best property price growth – with prices surging 37.0 per cent in the year to June.

Knight Frank national director of research Matt Whitby said Australia’s significant price growth was driven by a number of factors including 40 year low interest rates, first time buyer concessions, strong population growth and a lagging supply response.

“With interest rates likely to rise from current levels in 2011, the government incentives winding back and the supply response picking up (albeit modestly), we expect house prices to track sideways over the next six to nine months,” he said.

Rounding out the top five positions were China in second place, followed by Hong Kong and then Latvia.

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Nov

8

2010

Housing safe from bubble burst: Steve Weston

Author: nobelfinance

Australia’s housing market exhibits different fundamentals from those hurting overseas, and is unlikely to see a significant dive in property prices, according to Advantedge general manager of broker platforms Steve Weston.

“I do get a bit sceptical when you here experts, or supposed experts come in from overseas, and they are saying fundamentally because property prices fell in the US or Europe well they’ll have to fall in Australia,” he told Broker News TV, in an exclusive interview.

Weston argues the US exhibits a much higher unemployment rate than Australia – at close to 15% when compared on an “apples with apples” basis. It is also dominated predominantly by fixed rate home loans, in contrast to Australia’s variable rate fixation, giving the Reserve Bank a lever to use if the local economy does enter more challenging territory.

Weston adds that compared with the US, Australian lending standards are high. “If we look at the US in those few years leading up to the GFC, about 30% of their lending was credit impaired, and all of it was done on a non-recourse basis, which means if customers do get into hot water, they can simply hand their keys back and it’s the lender’s problem,” Weston said.

Local market fundamentals are also strong, Weston argues, with interest rates still at normal levels, unemployment very low, a continued strong migration intake, and a “floor” under housing prices due to lack of supply.”So when we are hearing from these overseas pundits that properties are overvalued, I’m just a little sceptical,” he said.

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Nov

1

2010

Finance brokers account for almost 50% of all mortgages

Author: nobelfinance

Leading industry analysts have predicted third party brokers could claim up to 60% of the mortgage origination market within five years.

Speaking at the LIXI 2010 conference in Sydney, Fujitsu Consulting general manager Martin North, Mortgage Industry Analyst Tony Crossley and NextGen.Net sales director Michael Murphy all predicted imminent improvements in broker market power.

The JP Morgan/Fujitsu Australian Mortgage Industry Report report released in September measured broker market share at just under 40%. However, North thinks the next five years will see major bank market share dominance sink, while brokers will rise.

“I think we will see 60 per cent [of housing loans] funded by the majors, so that’s 40 per cent from elsewhere,” North said. “I think that mortgage brokers will have well north of 40 per cent of the market – it could be close to 50 per cent – because if you look at the consumer research, they are doing the right thing by consumers, and with the new regulatory environment in place that will only improve.”

Murphy from NextGen.Net agreed major banks would shrink to 60% of the market, and that third party market share could reach 60%.

“Any shift in funding away from the four majors would almost automatically imply through brokers or an alliance channel – there’s a fairly strict correlation between those two – so if you accept the premise [that major banks will fund only 60% of the market within five years] it wouldn’t surprise me if mortgage brokers increased up to 60%.

“I think there is every chance, because I do think over time there will be a levelling out on the revenue and the cost side of that relationship, so it will become a more palatable and more supported relationship over time – I really believe that.”

Crossley was more muted in his predictions. “It’s been essentially flat for some significant period, and it will require a different market for that to take off to the levels we’ve seen overseas, and I’m not sure it will get that far.”

However, he acknowledged the role brokers will play in increasing market competition with the four majors. “A lot of the rhetoric underestimates the impact of the broker – they do actually promote competition from their little office,” he said. ”They will draw out price comparisons and product comparisons, so it’s actually a very effective way of generating a market.”

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