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Finance

Latest Numbers Show Lift In New Home Lending

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The latest ABS housing finance figures show the number of loans to home buyers declined in August 2016, although lending improved modestly towards building purchasing new homes.

The Housing Industry Association revealed in total, there were 34,349 loans to owner occupiers purchasing homes (excl. re-financing) during August 2016, which is down by 1.3 per cent on July’s result and is 7.4 per cent lower than the number recorded in the corresponding month last year.

Lending to households building or purchasing new homes fared a little better during the month. The number of loans for construction increased by 3.7 per cent in August, but was still 1.7 per cent down on the level recorded year ago.

The number of loans for the purchase of new homes was essentially unchanged in the month (-0.3 per cent) at a level 5.7 per cent higher than a year earlier.

“It is pleasing to see lending in the new home market holding up in an environment where we are seeing the number of loans to home buyers easing across the housing market more broadly,” said HIA Economist Geordan Murray.

screen-shot-2016-10-11-at-1-22-02-pm

“Looking more closely at lending for new homes, the number of loans for construction has been gradually trending down since late 2014.

“This segment of housing finance is closely aligned with the detached house building market and lending activity has been generally consistent with expectations given the level of detached house activity,” he said.

“In contrast, the number of loans to those purchasing newly built homes has been steadily trending higher. It is in this segment of housing finance that we will see evidence of the lending activity related to the boom in apartment building, but the figures are yet to fully reflect the record level of construction activity.

“As the large numbers of apartments purchased in projects that are currently under construction reach completion over the next year, we should anticipate the number of loans in the segment of the market to increase quite significantly – particularly in New South Wales and Victoria,” Mr Murray said.

Original article published at www.theurbandeveloper.com  by Staff Writer 11/10/16

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Finance

New postcode restrictions for home loans

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New postcode restrictions for home loans

In a notice issued to mortgage brokers today the CBA announced it will roll out a range of changes including restrictions on lending in some postcodes.

This includes forcing customers to stump up fatter deposits in order to get a home loan.

It will impact all types of properties including homes and apartments and also borrowers regardless of whether they are owner occupiers or investors.

Commbank is rolling out a range of changing which will make it tougher for customers to successfully get a loan.

Commbank is rolling out a range of changing which will make it tougher for customers to successfully get a loan.

In the notice it said from Monday, December 4 the key changes will include:

– Reducing the maximum loan-to-value ratio from 80 to 70 per cent for customers without Lenders Mortgage Insurance (an insurance the customer pays and protects the lender not the borrower.) This means borrowers with a deposit less than 30 per cent must pay expensive LMI costs.

– Reducing the amount of rental income and negative gearing eligible for servicing which will impact investors.

– Change eligibility for Lenders Mortgage Insurance waivers and LMI offers for customers in some postcodes.

Home loan lending with the nation’s largest bank is about to get harder.

Home loan lending with the nation’s largest bank is about to get harder.

CBA said the new Postcode Lookup tool which will start from Monday will allow the bank and brokers to determine whether a borrower can successfully borrow in a particularly region or postcode and it will reduce customers wasting time applying where they are likely to get knocked back on a loan.

CBA has not released the postcodes and regions these changes will impact.

The move is a result of the responsible lending restrictions put on lenders by regulators to cool the red-hot lending market.

Home Loan Experts’ managing director Otto Dargan said these changes are significant and will impact many borrowers.

Home Loan Experts managing director Otto Dargan encourages borrowers to get unconditional approval before buying a property.

Home Loan Experts managing director Otto Dargan encourages borrowers to get unconditional approval before buying a property.

“Lenders keep an eye on the economy and their exposure to different property markets and adjust their lending policies to manage their risks,” he said.

“We strongly recommend that home buyers don’t commit to buy a property until they have an unconditional approval from a bank.

“You could win an auction and then find out that your pre-approval is worthless, and then what are you going to do?”

Unconditional approval is when your loan application has been fully approved and is not subject to any terms or conditions.

Originally Published: www.ipswichadvertiser.com.au

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Finance

New postcode restrictions for home loans

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brisbane

brisbane

THE nation’s largest lender is tightening its belt and making it even tougher for potential borrowers to successfully get a loan.

In a notice issued to mortgage brokers today, the CBA announced it will roll out a range of changes including restrictions on lending in some postcodes.

This includes forcing customers to stump up fatter deposits in order to get a home loan.

It will impact all types of properties including homes and apartments and also borrowers regardless of whether they are owner occupiers or investors.

Commbank is rolling out a range of changing which will make it tougher for customers to successfully get a loan.

Commbank is rolling out a range of changing which will make it tougher for customers to successfully get a loan.

In the notice it said on Monday, December 4 the key changes will include:

– Reducing the maximum loan-to-value ratio from 80 to 70 percent for customers without Lenders Mortgage Insurance (an insurance the customer pays and protects the lender, not the borrower.) This means borrowers with a deposit less than 30 percent must pay expensive LMI costs.

– Reducing the amount of rental income and negative gearing eligible for servicing which will impact investors.

– Change eligibility for Lenders Mortgage Insurance waivers and LMI offers for customers in some postcodes.

Home loan lending with the nation’s largest bank is about to get harder.

Home loan lending with the nation’s largest bank is about to get harder.

CBA said the new Postcode Lookup tool which will start from Monday will allow the bank and brokers to determine whether a borrower can successfully borrow in a particular region or postcode and it will reduce customers wasting time applying where they are likely to get knocked back on a loan.

CBA has not released the postcodes and regions these changes will impact.

The move is a result of the responsible lending restrictions put on lenders by regulators to cool the red-hot lending market.

Home Loan Experts’ managing director Otto Dargan said these changes are significant and will impact many borrowers.

Home Loan Experts managing director Otto Dargan encourages borrowers to get unconditional approval before buying a property.

Home Loan Experts managing director Otto Dargan encourages borrowers to get unconditional approval before buying a property.

“Lenders keep an eye on the economy and their exposure to different property markets and adjust their lending policies to manage their risks,” he said.

“We strongly recommend that home buyers don’t commit to buying a property until they have an unconditional approval from a bank.

“You could win an auction and then find out that your pre-approval is worthless, and then what are you going to do?”

Unconditional approval is when your loan application has been fully approved and is not subject to any terms or conditions.

Originally Published: www.ipswichadvertiser.com.au

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Finance

Suncorp blacklists your Suburb

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suncorp blacklisted suburbs

Big banks are set to announce tougher measures to crack down on high rise apartment purchases including blacklisting more than 100 Brisbane suburbs, doubling the minimum apartment size to qualify for funding, evidence of rental cash flows and tough new valuation criteria.

Lenders such as Adelaide Bank are introducing “minimum funding requirements” requiring apartments to have their own bathrooms, kitchens, laundries and windows in key rooms, such as bedrooms and lounge rooms.

Others, such as Suncorp Bank, the nation’s fifth largest mortgage lender, are circulating a list of 39 Brisbane postcodes covering more than 100 city and metropolitan suburbs where the new lending restrictions will apply from next Monday.

“Our settings have been adjusted for postcodes based on recent weakness in the investment unit market in Brisbane, with evidence of a reduction in prices,” a Suncorp Bank spokesman said.

suncorp restricts lending to local suburbs

McDowall and Everton Parks No 1 rated real estate agent Madeleine Hicks said “suburbs like McDowall, Stafford and Everton Park, are really a victim of what has been happening in neighbouring suburbs Chermside and Nundah.  A lot of units have been built in those suburbs and we are paying the price”

“Whilst there has been some unit development in our main suburbs it has been nothing compared to our neighbours.” said Hicks.

Nervous lenders are turning the screws on apartment buyers amid growing concerns about over-supply, falling prices, restrictions on foreign buyers and potential risk from combustible cladding widely used on high rise apartment exteriors.

For example, new apartment sales in the Queensland capital have reportedly collapsed by more than 70 per cent in a year, prompting desperate developers to offer lucrative incentives to attract buyers.

Developers, such as Consolidate Properties, claim Brisbane has been cruelled by restrictions on financing set up to ease speculative buying in Melbourne and Sydney.

Other developers, such as ForceOne Development, have been using incentives like a free Toyota Yaris to encourage apartment sales.

AdelaideBank, a division of Bendigo and Adelaide Bank, will today (Wed) announce stricter controls on apartment lending that include bigger sizes, better design, identifiable cash flows for investor/lands and more stringent calculations of a borrowers’ capacity to repay.

 On the Plus side

“Now presents a great opportunity for cashed up investors to get into the growing Brisbane market and take advantage of bargains that exist.  We know that the population in Brisbane will continue to increase and that will mean there will always be strong demand for homes in the inner suburbs,” said Madeleine Hicks

In fact Ms Hicks called for “greater investment in infrastructure in the Stafford, McDowall and Everton Park suburbs to better reflect the increase in population that is moving into these suburbs.  This only seems fair as the Council is collecting greater revenues but not spending the money here.”

The Minimum requirements for high density apartments to obtain funding include windows in bedrooms and living rooms, separate bathrooms and their own laundries and kitchens. High density apartments are complexes of more than 50 units or five storeys.

Minimum sizes for two bedroom apartments have been doubled to 60 square metres and timeframes for off-the-plan valuations have been reduced from six to three months to “better the risk” and “align acceptance of applications and valuers’ professional indemnity cover”.

Last month Australia and New Zealand Bank also issued a blacklist imposing tougher terms requiring borrowers to have a 20 per cent deposit.

The value of apartments has fallen by about 1 per cent in Brisbane during the past 12 months, according to SQM Research, which monitors property prices.

Several recent reports by independent consultants have warned demand will be exceeded by the estimated supply of new apartments in Brisbane, which will add to downward pressure on prices.

There is also growing investor concern about the outcome of current investigations into the widespread use of inflammable cladding on apartments, particularly who will be liable for its replacement.

 Under Suncorp’s new rules, it will no longer accept investment loan applications for apartments that do not have a minimum deposit of at least 20 per cent.
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