Update: Australian Housing Affordability

Iden Money presents excerpts from the REIA Deposit Power Housing Affordability report for the September quarter 2010.

(This article is an update on the original article on Housing Affordability and looks at housing affordability on a national basis for September 2010 quarter. Click here to see the original article.)

The year to September 2010 recorded the largest annual decline in housing affordability since the beginning of the decade, with the proportion of income required to meet loan repayments increasing 5.8 percentage points to 34.8% over the year.

Over the September quarter, housing affordability decreased 0.2 percentage points nationally. Despite the decline, some states and territories experienced a moderate improvement in affordability over the quarter, with the exception of the Australian Capital Territory, Queensland and Victoria where declines were evident.

During the quarter, the Reserve Bank of Australia’s (RBA) cash rate remained on hold at 4.5%. Whilst the average quarterly standard variable rate remained unchanged during the quarter, average quarterly fixed rates declined moderately, albeit enough to record the largest quarterly decrease observed during the year.

The Australian Capital Territory recorded a decline in housing affordability, but it remained the most affordable state or territory to own a home, with the proportion of income required to meet loan repayments increasing 0.8 percentage points to 18.8%; 16.0 percentage points below the national average. Read More »

Major banks could face rate freeze

Australia’s major banks could face a 24-month freeze from raising rates outside of RBA movements should the Green party successfully steer new legislation through parliament.

In an e-mailed statement released early this week, the party announced it would be introducing the ban in the lower house, along with rules that banks pass along decreases to the official central bank rates and scrap some small fees.

“The Banking Amendment (Delivering Essential Financial Services for the Community) Bill 2010 provides legislative protection for customers including a ban on unfair A$2 bank ATM fees, ensuring basic fee-free bank accounts, capping the level of mortgage exit fees, and introducing a variable rate mortgage product (“Fair Price Mortgages”) that will only permit genuine changes to the lender’s cost of funds to be passed on to customers,” said Senator Bob Brown in a statement. Read More »

RBA’s rate hike dampens home buyer spirit

The RBA’s latest rate hike significantly dampened home buyer spirit over the weekend.

Data from Australia Property Monitors found just 7.1 per cent of properties cleared in Brisbane over the weekend – significantly down on the 38.2 per cent achieved this time last week.

The news was just as sour in Melbourne, Adelaide and Sydney.

In Sydney 53.8 per cent of properties cleared – down from the 67.4 per cent achieved this time last year.

The dearest property sold in the capital city over the weekend was a three bedroom house in Newtown, which went under the hammer for a cool $13.9 million.

The cheapest property sold was a one bedroom unit in Fairfield which went under the hammer for $135,000.

Source – The Adviser

Spotlight on major banks after the rate rise

All eyes will be on the majors in light of CBA’s decision to lift its standard variable rate 20 basis points above the RBA.

While CBA took less than one hour to announce its rate hike, the other major lenders have been a little slower off the mark.

Federal Treasurer Wayne Swan branded CBA’s rate hike as a “cynical cash grab” and vowed to introduce reforms to boost competition between the lenders.

But while CBA’s decision managed to appal Mr Swan, it failed to shock the industry, with both CBA and Westpac consistently warning that higher funding costs would cause them to step out of cycle with the RBA.

If all the majors move this week, it could open up sound opportunities for the non-bank sector. Read More »

WestPac unveils huge profit

Iden Money wins Cannex 5-Star Rating

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Click on the “Downloads” menu to view our products and rates that can be easily downloaded on your computer.  

If you have any questions or you would like to book a no-obligation appointment with one of our staff, call our hotline 02-8844 8989 or email marketing@idenmoney.com.au  

Source: http://www.canstar.com.au/

Housing loan numbers begin to fall for first home buyers

(source: REIA Housing Affordability Report, September Quarter 2009)

Although there were no significant changes in housing affordability in the September quarter, the total number of loans began to decrease, particularly in the first home buyer market.

The number of loans to the first home buyers decreased by 11.7% to 48,507 loans. Despite this decrease in the September quarter, over the year, loans for first home buyers nationally increased by 72.8% and the total number of loans increased by 41.3%.

The Australian Capital Territory remained the most affordable state or territory in which to buy a home, where the proportion of income required to meet loan repayments increased slightly to 17.2%.  This is 11.8 percentage points below the national average. New South Wales remained the least affordable state or territory in which to buy a home, where the proportion of income required to meet loan repayments increased to 31.2%; 2.3 percentage points above the national average.

For the September quarter, Tasmania and Queensland showed the biggest improvement in housing affordability, with the proportion of income required to meet loan repayments decreasing by 1.3 percentage points. Housing affordability in Victoria declined the most, with the proportion of income required to meet loan repayments increasing by 0.9 percentage points for the September quarter.

Australian House Prices Rise Strongly

Melbourne and Sydney housing markets recover

According to the latest RP Data-Rismark National Dedonic Index, Australian home values rose by an indicative 1.4 per cent in October after a sluggish 0.4 per cent growth in September.

Over the first 10 months in 2009, house prices have now risen by 10 percent. According to RP Data’s Senior Research Analyst, “the strong growth figures throughout October after a slowdown during September show that the market is very resilient and that the 25 basis point interest rate increase during the month has not immediately impacted the market.”

The biggest story of 2009 has been a strong recovery of Sydney and Melbourne housing markets with Melbourne leading the way by delivering capital gains of +14.9 percent while Sydney had a cumulative growth of 9.9 percent. Other cities that have performed strongly this year besides Melbourne and Sydney are Darwin (+12.7 per cent), Canberra (+11.0 per cent), Brisbane (+6.9 per cent), Perth (+6.1 per cent) and Adelaide (+4.6 per cent).

Rates rise but opportunity exists for savvy borrowers

Probably the safest bet that anyone could have placed on Melbourne Cup Day was on the rate rise by the Reserve Bank. As expected by most people, the Reserve Bank of Australia increased their interested rate – this time by 25 basis points. With this rate rise, the new official cash rate is now 3.5 percent.

Read More »

RBA’s rate rise catches industry unawares

Source: mortgagebusiness.com.au

The Reserve Bank of Australia’s decision to raise interest rates yesterday by 25 basis points took most by surprise.

According to Mortgage Business’ recent straw poll, 71.8 per cent of brokers didn’t expect the RBA would raise rates in October. Of the 351 respondents only 25.4 per cent tipped the RBA to raise rates while 2.8 per cent were unsure. Read More »