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100% finance for Australians overseas
As detailed in our March 2006 newsletter, banks are
continuing to relax lending requirements as a response to the slowdown in
housing lending. Interest discounts are being offered, and it is no longer
a requirement to demonstrate savings patterns to obtain a mortgage for up
to 95% of the property value.
100% finance is now available for Australians overseas buying residential investment
properties back home. Foreign investors can finance up to 80% of the property
value. Normal qualifying criteria apply with a loading of 0.3% on
top of the standard variable rate.
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Australian interest rates outlook
In a statement on monetary policy by the RBA
in May 2006, the view is that 'the next move in interest rates is more
likely to be up than down'. This is attributable to strong global economic
expansion which is forging growth in Australia, a domestic economy
operating with limited capacity, strong consumer spending and an expected
increase in underlying inflation.
After increasing cash rates by 25 basis
points in May, the RBA will be sitting back and analysing the impact of
this over the next few months. Indeed rates were left unchanged at 5.75%
at June and July's board meetings.
During May and June, the major
banks increased interest rates for 3 - 5 year fixed mortgages, indicating
expectations of a further rate rise. There have been rumours of another
0.25% rate rise by the end of the year, although last month's report by
Macquarie Bank expressed the opinion that the RBA may be hold for the rest
of the year, due to a softening in the global economic outlook. The
general consensus is however, that there is a bias towards higher rates,
rather than lower.
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Property market overview
In spite of the upward trend in interest rates, the number of people taking
out home loans is continuing to increase from its low point in 2004, according
to last month's media release by the MIAA. Both investors
and owner occupiers are demonstrating continued confidence. In April of
this year, the number of owner occupiers increased in all states except
Victoria.
The number of first home buyers has hit record levels as shown by figures
from the Australian Bureau of Statistics. In April 2006, 19.1% of total
housing loans were taken out by people buying their first homes - the
highest level since March 2002. In an MIAA media release about the latest MIAA/BankWest Home
Finance Survey, 89% of first home buyers are driven by being able to renovate
their home to their taste, 75% want to feel financially secure and 68%
want the stability of their own home. The various benefits of owning their
own home are perceived to outweigh the commitment of a mortgage.
For further details, please refer to the MIAA Economic Review.
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Our selection of articles by The Age
Property market bounces back early
Australia's housing sector appears to be making an earlier than expected comeback
following months of sluggish growth, economists say ... more
Jobless drop raises odds of rate rise
Home buyers are more likely to be stung by higher interest rates this year
after the unemployment rate fell to a 28-year low .... more
Australia slips further down the rankings
Australia has slipped a notch. Taiwan has taken over our spot as the world's 16th
largest economy, as the nation's growth rate has slowed to the middle
of the pack of rich countries ... more
Rate rise set to stall house prices
Higher interest rates are expected to thwart a turnaround in house prices in
Sydney, Melbourne and Brisbane this year, but the commodities boom will
insulate Perth, where real estate prices are rising the fastest ... more
We're spending more than we earn
Australians are spending at an unsustainable rate, shelling out more than they earn,
economic forecaster Access Economics has warned .... more
Melbourne house prices rise
House prices in Melbourne continue to rise, figures from the Australian Bureau
of Statistics show. Melbourne prices rose 0.8 per cent in the March quarter,
pushing prices up 3.8 per cent over the past year .... more
Victoria, NSW victims of a boom with mixed blessings
Australia's resources boom over the past two years has been a mixed blessing. On the
one hand the commodity prices boom has been the major factor in growth
of the resource-rich states of Western Australia and the Northern Territory
... more
The new generation of baby boomers
Two-day-old Xavier Molloy is part of a new baby boom. Bureau of Statistics figures
show the number of births in Australia rose by 2.4 per cent to 261,400
last year, 6200 more than in 2004 ...
more
Fringe suburbs prove a babe magnet
Australian families are on the increase once again, and the ramifications are set
to forge substantial changes in the Melbourne property market - fundamentally
altering the distribution of wealth in Australia's second-largest city
... more
Home loans soar as good times roll
A decade of low interest rates has led Australians to engage in an extraordinary
mortgage binge that has helped to more than double Melbourne house prices
in the same period... more
In our next newsletter
- New property purchase services available to overseas investors
We will be happy to discuss and research various options for your new or existing mortgage in Australia. There are plenty of deals in store for you, simply contact us by sending an enquiry.
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