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

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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

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The most in-demand Brisbane suburbs for July 2018

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The most in-demand Brisbane suburbs for July 2018

Brisbane may not be the most popular Queensland location to invest into compared to other markets, but it is certainly seeing a rise in demand and in median price, according to new data.

Data from realestate.com.au’s Property Outlook – July 2018 report shows that demand in Brisbane is up 5.9 per cent year-on-year. Both houses and apartments are up, with rises of 6.7 per cent and 4.5 per cent respectively.

The report stated that offshore property searches are very active and is the most popular capital city for demand from this particular investor type.

The overall median price saw a rise of 1 per cent to $485,000, with the report noting that the timing in the cycle seems to be moving out of sync with Sydney and Melbourne, claiming “prices never increased to the same level and it remains far more affordable”.

Overall, metro Brisbane was fairly in demand and experienced positive price growth. The eastern region of Brisbane was the most in demand and saw the largest median price growth, with a rise in demand of 16.7 per cent and a median price rise of 5.7 per cent to $556,000. The next best region in demand was the inner city region, which saw demand rise to 13.7 per cent, but was the only region to experience a price growth decline by 3.1 per cent down to $628,000.

The most 10 popular suburbs in Brisbane, according to realestate.com.au, are:

Houses

  1. East Brisbane
  2. Indooroopilly
  3. Paddington
  4. Holland Park
  5. Wilston
  6. Chandler
  7. Windsor
  8. Coorparoo
  9. Newmarket
  10. Toowong

Apartments

  1. Graceville
  2. Mansfeld
  3. Tarragindi
  4. Camp Hill
  5. Red Hill
  6. Ashgrove
  7. Holland Park
  8. Tingalpa
  9. New Farm
  10. Paddington

Regional Queensland saw every single area rise in demand with the exception of the Gold Coast, which declined by 9.1 per cent. The strongest rise in demand was Gladstone, which was up 39.1 per cent and a median price of $230,000 and was followed by Fraser Coast, which was up 33.8 per cent and a median price of 33.8 per cent and Gympie, which was up 32.2 per cent and a median price of $295,000.

Despite the demand, price growth was fairly down, aside from four areas; the Sunshine Coast which rose 5.8 per cent to $545,000, the Gold Coast which rose 4.1 per cent, Mackay which rose 0.3 of a percentage point to $321,000 and Gympie, which held steady.

Gladstone saw the largest median price growth decline, falling 14.8 per cent, and was followed by Rockhampton, which declined 12.7 per cent to $240,000 and Bundaberg, which declined 7 per cent to a median price of $265,000.

Metro Brisbane median price and demand

RegionMedian priceMedian price year-on-year percentage changeDemand year-on-year percentage change
East$556,0005.7%16.7%
North$540,0001.9%6.0%
South$635,0001.6%-2.1%
West$633,5000.6%0.1%
Inner City$628,000-3.1%13.7%

Regional Queensland median price and demand

RegionMedian priceMedian price year-on-year percentage changeDemand year-on-year percentage change
Bundaberg$265,000-7.0%30.2%
Cairns$340,000-4.2%6.5%
Douglas$335,000-1.2%19.3%
Fraser Coast$305,000-1.6%33.8%
Gladstone$230,000-14.8%39.1%
Gold Coast$536,0004.1%-9.1%
Gympie$295,0000.0%32.2%
Mackay$321,0000.3%31.1%
Noosa$608,000-3.5%24.2%
Rockhampton$240,000-12.7%5.6%
Sunshine Coast$545,0005.8%6.5%
Toowoomba$355,000-1.0%4.8%
Townsville$310,000-1.6%10.9%

Source: www.smartpropertyinvestment.com.au

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Mega mansion sells for $11m plus

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Mega mansion sells for $11m plus

The riverfront property in Hawthorne sits on a 2137 sqm riverfront block.

ONE of Brisbane’s most enviable trophy homes has sold for more than $11 million in the city’s biggest sale of the year so far.

The mega mansion, on a sprawling 2137 sqm riverfront block in Hawthorne, has been home to energy executive Shaun Scott and his wife, Sarah, for the past eight years.

Mega mansion sells for $11m plus
The view from the property in Hawthorne.

The Scotts’ property has been snapped up by self-made millionaire Anthony Yap, who founded Good Price Pharmacy Warehouse.

Mega mansion sells for $11m plus
Good Price Pharmacy Warehouse managing director Anthony Yap. Picture: Richard Walker.

Mr Yap and his wife, Hahn Luu, happen to be selling their current, six-bedroom home in neighbouring Balmoral, which is scheduled to go to auction next month.

Ms Luu declined to comment when contacted by The Courier-Mail.

Mega mansion sells for $11m plus
This house in Balmoral is for sale.

Mr Yap also owns another ­mansion in Balmoral, but his new digs in Hawthorne really are something else.

The home has five bedrooms, six bathrooms, two swimming pools, a heated spa, a north-south facing championship-size tennis court, a boat house, putting green and private 12m jetty.

Mega mansion sells for $11m plus
Inside the Hawthorne home.

Wait, there’s more.

There’s also a wine cellar, music room, library, gym and games room with built-in bar.

Records show Mr Scott, who is the former chief executive of Arrow Energy, bought the original property for $6.85 million in 2010.

Mega mansion sells for $11m plus
Shaun Scott is a former chief executive of Arrow Energy.

They employed architect Donovan Hill to design a brand new house, which was completed in 2014.

Selling agent David Price of Ray White – East Brisbane said the property attracted interest from potential buyers in London, New York and Dubai, as well Sydney and Melbourne.

“It was a truly international campaign,” Mr Price said.

“It’s a spectacular home. The house really had the lot because of the views over New Farm Park and the city, as well as being a flat block with a tennis court.”

There’s been some big money changing hands between the movers and shakers of Brisbane’s property market in the past year, with prestige homes attracting strong demand and increasing interest from interstate buyers.

This latest sale is the biggest of 2018 in Brisbane so far, eclipsing the $11 million sale of a mansion at 27 Sutherland Ave, Ascot, in March, and the $10.138 million sale in February of the Hamilton Hill mansion built by Christopher Skase at 36 Dickson Terrace.

Mr Price also recently sold a riverfront home at 15 Laidlaw Parade, East Brisbane, for $3.45 million and has listed another executive address at 10 Aaron Ave, Hawthorne.

“The top end’s very strong,” he said.

Mega mansion sells for $11m plus
The view from the house in Balmoral.
Mega mansion sells for $11m plus
The Hawthorne home sold for the highest price in Brisbane so far this year.
Mega mansion sells for $11m plus
Inside the Hawthorne house, which has sold.

Source: www.sunshinecoastdaily.com.au

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Brisbane’s Top Performing Growth Suburbs

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Brisbane’s Top Performing Growth Suburbs

Canny property owners in Brisbane have made huge cash gains after investing in suburbs which have recorded high capital growth.

Despite reports of a stalling real estate market, Place Advisory research has identified high performing suburbs in Brisbane, Ipswich and Logan, in the six months to March 2018.

Brisbane recorded an average capital gain of 6.2 per cent, with the inner suburb of Milton landing the highest capital growth of 19.9 per cent with median house values of $892,500.

Place Advisory’s Lachlan Walker said the growth has resulted in significant yields for property owners who have sold in the current climate.

“These gains are however the result of long-term strategies, crystallising capital growth if their initial investment was made based on the underlying drivers of population growth and the delivery of planned strategic local infrastructure,” Walker said.

SuburbGrowth (%)
Milton19.9%
Ascot13.3%
Kenmore Hills11.9%
Bundamba9.7%
Jamboree Heights9.4%
Shorncliffe9.2%
Park Ridge6.9%

Ipswich has lead the market in terms of a general rise in demand and pricing.

“The Ipswich corridor has undergone significant change over the past few years,” Walker said.

“Low entry level prices have allowed for strong growth to be achieved and value to be recognised by purchasers as this area continues to develop.

“The suburb of Bundamba recorded the highest capital growth in the Ipswich area, a significant 9.7 per cent.”

The Ipswich property market has also benefited from the awarding of a $5 billion defence contract to the region, which is forecast to generate jobs and infrastructure for the next 40 years.

In Logan, the top performing suburb was Park Ridge, with 6.9 per cent capital growth.

“The wider Logan area is a long-term investment opportunity,” Walker said.

Source: theurbandeveloper.com

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