Connect with us

Market Place

Property borrowers wooed with flights to London, cashback and low rates

Published

on

Property borrowers wooed with flights to London, cashback and low rates

Lucrative terms and conditions are being rolled out by lenders attempting to build residential loan books. Jim Rice

Property borrowers are being offering flights to London, refinancing cash back, heavily discounted fixed rates and the lowest variable rates since 1960, when Robert Menzies was prime minister and the median family income was $5600.

Lucrative terms and conditions are being rolled out by lenders attempting to build residential loan books that represent about 55 per cent of total loans, 25 per cent of revenues and about 30 per cent of cash earnings, according to investment bank analysis.

“We are offering great deals,” said Peter Lock, chief executive of Heritage Bank, which is reducing its two-year fixed rates by 14 basis points to 3.65 per cent.

“For the right customer, now is the right time to get and take advantage of low rates.”

Property borrowers wooed with flights to London, cashback and low rates
Lenders are balancing the need to boost profits as funding costs rise and the housing market slows, despite record low cash rates. Gabriele Charotte GLC

Lenders are restructuring their loan books to provide attractive rates for popular products, particularly shorter term fixed rates, typically two-year rates, for new borrowers or those transferring from competitors.

They are also targeting principal and interest borrowers, who are the largest segment of borrowers.

The lenders are balancing the need to boost profits as funding costs rise and the housing market slows, despite record low cash rates.

Commonwealth Bank of Australia, the nation’s largest mortgage lender, is offering a refinance cashback of $2000 to borrowers who refinance their home loan from another financial institution.

HomeLoans, which is listed on the ASX, is waiving the $120 fee on its Ultra Plus option, for refinancing and debt consolidation, for the life of the loan.

Property borrowers wooed with flights to London, cashback and low rates
Moody’s says risks in the housing market have risen. Rob Homer

Westpac is offering 500,000 Velocity frequent flyer points for home loans of $1m or more, which is enough for a couple to fly economy return to London from any Australian capital.

A $250,000 loan can earn a couple 200,000 points, enough for a return flight to Hong Kong.

Many lenders are offering ‘shop front’ loans by increasing the rates of other products.

For example, last month the average loan decrease was 20 basis points and the average increase 13 basis points, according to Canstar, which monitors rates and prices.

Property borrowers wooed with flights to London, cashback and low rates
Westpac is offering 500,000 Velocity frequent flyer points for home loans of $1m or more, which is enough for a couple to fly economy return to London from any Australian capital. James McCormick

The average increase on a fixed, owner occupier rate was 15 basis points and the average decrease 22 basis points.

But the total number of products whose loans increased was higher than overall decreases.

The current standard variable ‘indicator’ rate, which is an ‘indication’ of what borrowers should be looking for, is 5.2 per cent, the lowest since December 1960, which it was 5 per cent.

But there is a wide spread between rates in each category, which means borrowers need to shop around for best rates.

Property borrowers wooed with flights to London, cashback and low rates
Lenders are making it a lot harder to refinance or obtain loans in response to tougher scrutiny of borrowers’ income and expenditure imposed by the prudential regulators. Tamara Voninski

For example, the spread between basic variable principal and interest loans is 180 basis points.

In addition, lenders are making it a lot harder to refinance or obtain loans in response to tougher scrutiny of borrowers’ income and expenditure imposed by the prudential regulators.

Virgin Money, which is owned by Bank of Queensland, is among the latest to toughen lending conditions for borrowers, such as for high rise apartments in Brisbane inner suburbs, such as Chermside and Hamilton.

It is also broadening terms of unacceptable security to include property less than 60 square metres in prescribed high density Brisbane locations. It follows cuts of 10 basis points to popular interest-only loans.

The big four banks, which account for more than eight in 10 of the nation’s mortgages, are expected to raise rates because of rising funding costs, according to Citi.

Major lenders, and their smaller mortgage-centric competitors, can no longer afford to absorb the rising costs of their residential loan books, which account for more than 55 per cent of their total loan portfolios, its analysis warns.

The out-of-cycle rate hikes are expected to average around 8 basis points across their residential lending products with interest-only investor loans expected to rise more.

Source: www.afr.com

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Market Place

Will the new Brisbane State High School catchment affect property prices?

Published

on

Changes made to Brisbane State High School’s catchment zone are already affecting properties for sale in the area, according to local real estate agents.

The state government released new catchment maps last week which revealed Brisbane State High School’s catchment zone could be cut by 25 per cent to manage pressure on its rising enrolments.

The school’s current catchment stretches through West End and out to Dutton Park but, under the new draft catchment, students from more than 500 households in Dutton Park, Woolloongabba and Highgate Hill would no longer be eligible for direct entry to State High once the neighbouring high-rise school in Dutton Park opens in 2021.

brisbane state highschool

19A Gloucester Street, Highgate Hill, recently went under contract with four offers in one weekend because it will still fall in the catchment.

It’s been a devastating revelation for homeowners who bought in the area specifically to be in the catchment of Queensland’s top performing state high school, said Sam Peterffy, of Harcourts Homeside.

Not only are they upset at being kicked out of the catchment, they’re worried the value of their property will fall because if it, she said.

“Of course the people who are already living here are worried — many of them bought here for the school,” she said.

brisbane state highschool

7 Grantham Street, Dutton Park, is a six-bedroom family home that would fall outside of the Brisbane State High School catchment.

“I feel sorry for these people. They might have young children, aged five and under, and bought here planning for their children’s future. Now that’s up in the air. It’s not a great situation for them.”

Ms Peterffy said the local property market had already been affected.

“From a buyer perspective, I have people who were looking in these areas and have straight up said they’re no longer looking at Dutton Park or anywhere that’s out of the catchment,” she said.

brisbane state highschool

7 Grantham Street, Dutton Park: Marketing agent Ben Salm said being outside the BSHS catchment zone could potentially affect property prices of those homes who are currently in the catchment zone.

Brisbane State High School is a 3200-student strong, selective GPS school, sought-after for its top academic results and extensive extra curricular program.

Demand for places is so high, the school employed an investigator this year to uncover families rorting the catchment system.

Ben Salm of Place Estate Agents is selling a beautiful six-bedroom family home at Grantham Street, Dutton Park, that is currently in the State High catchment, but would be bumped out under the new plan.

He said it had already affected the property’s desirability for some buyers.

“It’s something we’ve seen a fair bit of with feedback from the buyers coming through,” he said.

“They’re unsure about the new school because it’s all so unknown at this stage; that creates a hesitancy and then you get less competition, which potentially means lower prices.

“Because this house is now looking like it’ll be out of the State High catchment, the feedback we’re getting suggests the price could be $50,000 less than what it might have been worth three to six months ago.

“There is a grace period though, so you never know what will happen.”

It’s important to note the effect on current and future families will not be immediate. Brisbane State High School students living in the proposed catchment zone for the new school will be allowed to remain enrolled at State High for the duration of their studies, while their siblings will still be able to enrol under transitional arrangements.

The government also said that families with primary school children living in a street which appears on both catchment maps can choose to enrol their child at either school.

But the changes are causing a lot of uncertainty. Ms Peterffy recently sold a house at Gloucester Street, Highgate Hill, a street where some houses will still fall in the catchment and others won’t.

This particular house will still be in the catchment, so the competition to secure it was strong, with four offers in one weekend, Ms Peterffy said.

“I had a couple who argued about it. The husband was saying that the new school was likely to be great but the wife was really worried about it,” she said.

“She just kept saying, ‘But it’s not going to be Brisbane State High, it won’t be the same’. So for them, the fact this house would still be in the catchment in a few years’ time was very important to them.

“That said, there will always be people who will want to buy in Dutton Park anyway. It’s the best suburb in Brisbane in my view.”

And Ms Peterffy said the silver lining would be in the new school, Inner City South State Secondary College, which had the potential to bring new buyers to the area long term.

“Some buyers who may not previously had Dutton Park and surrounding areas on their radar may come here because there is going to be a shiny new school with the best of everything and a connection to the University of Queensland,” she said.

“I know everyone wants to be in the State High catchment right now but my prediction is this new school will be in the top 10 state high schools in Queensland very quickly.”

Mr Salm said the property market could pick up again in these areas once the plans for the school are finalised and released to the public.

“It could actually create quite a bit of excitment in the area once there’s a lot more detail released and prices could go up again,” he said.

“I think in the long term this school will be competition for State High but at the moment it’s making buyers unsure about being in the area, and will only make competition for property staying in the State High catchment even tougher.”

The maps and the enrolment management plan are out for public consultation until September 30.

Source: www.domain.com.au

Continue Reading

Market Place

Medium Density Development Round-Up: Brisbane

Published

on

The Urban Developer recently published our first medium-density development round-up, covering five low-rise development proposals in Sydney.

This week we turn to sunny Queensland to seek out the latest in low- to medium-rise development in Brisbane – uncovering nearly $200 million worth of proposals that have recently entered planning assessment.


1. 79 Swann Road, Taringa

brisbane developers

Developer Sanchi’s proposal for “Green Spines” at 79 Swann Road, Taringa.

Its proximity to the University of Queensland and public transport makes Swann Road a popular destination for developers.

Sanchi Development has proposed a 6-storey Cottee Parker-designed project that will include 3-levels of basement parking.

The proposal is located nearby the Indooroopilly shopping centre and south-east bikeway with the Taringa Train Station and bus stops within 400 metres of the site.

The building will host a communal roof top terrace with views of Mt Coot-tha which will include a gym and BBQ facilities.


2. 69-71 Swann Road, Taringa

brisbane developers

Artist impression of Mosaic Property Group’s Swann Road, Taringa project.

Local developer Mosaic Property has proposed a low-rise, five-storey development at 69-71 Swann Road in Taringa.

The 1,256sq m site was purchased for $3.1 million and will be developed to deliver 16 dwellings.

Subject to approvals, construction will start early next year and is expected to cost $19.2 million.


3. 8-10 Amersham Street, West End

brisbane developer

Arkhefield implemented the Breath Design Philosophy to embrace natural light, ventilation, and passive cooling.

Developer Amersham Street Pty Ltd has lodged a proposal for a 5-storey residential development in Brisbane’s hip suburb of West End.

The $20 million project will create 23 units as well as 39 car parks with an estimated $9 million construction cost.

Each apartment has its own balcony or private terraces with the building topped by a rooftop garden with a fireplace and BBQ for tenants to take advantage of city views.

The project will launch to market early-2019.

Editor’s note: Adam Di Marco, founder of the Urban Developer, is a director of Amersham Street Pty Ltd.


4. 77 Walkers Way, Nundah

brisbane developer

Dennis Family Corporation’s proposal for 32 triple-storey townhouses in Nundah.

Dennis Family Corporation has lodged plans for 32 triple-storey townhouses along 77 Walkers Way in Nundah.

The $21 million development, designed by Ellivo Architects, is spread across 7,069sq m of rural zoning.

The project will include of 4,902sq m of communal space and 1,556sq m of private open space.

The site is located in within a 1 km of Toombul Shopping Centre and 3.5 km of Brisbane Airport.

The Dennis Family told The Urban Developer construction was expected to start late-2019 following pre-sales.

The property group is also going to tender to select a construction partner for the project.


5. Parkside, Springfield (Stage 2).

brisbane developer

Springfield City Group $39 million second stage in the heart of Springfield Central.

Springfield City Group’s second stage development in the heart of Springfield Central will create 74 apartments as well as 196sq m of ground floor commercial and retail space.

The $39 million development, designed by Plus Architecture, will overlook Robelle Domain Parklands and will be walking distance from Orion Town Centre and Springfield Central Train Station.

Construction commencement will be dependent on pre-sales, however, Springfield City Group told The Urban Developer the target commencement date was forecasted for the second or third quarter of 2019.

A builder has not yet been appointed to the project.

Source: theurbandeveloper.com

Continue Reading

Market Place

Brisbane House Price hits all-time high

Published

on

Brisbane

Brisbane house price has hit an all-time high.

The median brisbane house price is peaking at $673 000, which Real Estate Institute of Queensland (REIQ) says is a very good sign.

“It tells us that this market has well and truly recovered from the post GFC slump” CEO, Antonia Mercorella, said.

The latest Market Monitor report by REIQ revealed Brisbane’s median house price has increased 2.5% in the past year and 30% over five years.

The top growth suburbs across the city’s south include Holland Park West, Manly West and Carindale.

brisbane housing

Brisbane’s median house price has hit an all-time high. The median house price is peaking at $673 000, which Real Estate Institute of Queensland (REIQ) says is a very good sign. (9News)

In the city’s North, it’s Mitchelton, Stafford Heights and McDowall.

“Those suburbs are really popular with families in particular. And what they demonstrate is that there is good affordability.” Ms Mercorella said.

David Conboy is currently selling a five-bedroom, two-bathroom home at Mitchellton, asking $675,000.

He is not surprised the suburb is booming.

brisbane

 

 

Antonia Mercorella, said the post-GFC slump is over in the Brisbane property market. (9News)

“In this area we have a fantastic access to infrastructure to local schools, shops and public transport as well,” the Harcourts Property Sales and Marketing Consultant said.

A bit further out, the best performer in Greater Brisbane has been Caboolture South.

It has seen an increase of 30.4% to a median house price of $327 000.

Brisbane

Brisbane’s median house price has hit an all-time high. (9News)

“With the Bruce Highway improvements, we should continue to see those suburbs performing strongly, into the future” Ms Mercorella said.

Across Queensland, the coastal markets have seen the most growth.

Noosa on the Sunshine Coast taking out the top spot, up 6.9% to a median house price of $695,000.

It takes the title from the Gold Coast, where the median house price sits at $622,000.

“They offer just such a good lifestyle. You’re close to the water, close to nature” Ms Mercorella said.

Source: 9news.com

Continue Reading

Positive Cashflow

duplex designs, dual occupancy homes

Trending