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HomeBuilder extension gives applicants extra 12 months to start building

HomeBuilder extension gives applicants extra 12 months to start building

23 Apr 2021 | First Home Buyers, Home Loans, News

Tens of thousands of HomeBuilder applicants around the nation can breathe a sigh of relief after the federal government extended the construction commencement requirement from six months to 18 months.

It’s fair to say that the success of the HomeBuilder program caught a lot of people off guard and, as a result, contributed to a surge in demand for manpower within the residential construction industry.

In fact, more than 121,000 Australians applied for the HomeBuilder grant, which is expected to support around $30 billion worth of residential construction projects.

“The number of new houses that commenced construction in the December quarter was the second-highest level on record,” says Housing Industry Association’s chief economist Tim Reardon.

Long story short: the $25,000 and $15,000 grants incentivised so many people to build or renovate their homes that many builders were going to be unable to turn the first sod within the required six-month time frame.

So who exactly will the extension benefit?

Ok, so if you haven’t lodged an application for the HomeBuilder grant, then bad news, this extension won’t apply to you as the application deadline was April 14.

This extension will benefit those who’ve already applied and signed contracts during the HomeBuilder eligibility period between 4 June 2020 and 31 March 2021.

It means applicants now have 18 months – from the date an eligible contract was signed – for construction to begin on their property.

Treasurer Josh Frydenberg says the extension will help smooth out the HomeBuilder construction pipeline and support construction jobs over a longer period of time.

“It will also ensure that existing applicants facing difficulties in starting construction on their new builds and renovations are not denied a HomeBuilder grant due to circumstances outside their control,” explains Mr Frydenberg.

Need finance for your HomeBuilder project?

If you applied for finance while making your HomeBuilder grant application several months ago, get in touch with us today to double-check it’s still the most suitable option for you (much has changed in the past months!).

And if you’ve signed a building contract for HomeBuilder, but haven’t got around to exploring finance options just yet, then be sure to reach out to us soon – we’d love to run through some solutions with you.

How long do you have to snap up a property in the current market?

How long do you have to snap up a property in the current market?

15 Apr 2021 | Home Loans, News, Property

You open up the real estate app on your phone, scroll through a few listings, and then there it is: the home of your dreams, ‘added 1 hour ago’. So just how long do you typically have to act in this hot market?

Well, let’s just say it definitely helps to have spoken to us about pre-approval if you’re actively house-hunting right now.

That’s because the average number of days properties are listed for sale on realestate.com.au reached record lows in every state in March, according to the REA Insights Housing Market Indicators Report April 2021.

And that’s likely got something to do with the fact that demand is extremely strong, with ‘views per listing’ at record highs.

So just how long are properties listed for?

The average number of days properties were listed on the realestate.com.au website was 48 in March 2021.

Properties sold the fastest in the ACT (average of 25 days listed), New South Wales (27 days) and Victoria (30 days).

Tasmania (37 days), South Australia (48 days) and Queensland (54 days) were positioned in the middle of the pack, however, they dropped 9, 17 and 19 days respectively over the course of the month.

And while properties in Western Australia (71 days) and the Northern Territory (59 days) took the longest time to sell on average, they recorded the largest falls in average time online over the past year, down 28 and 14 days respectively.

Views per listing and property price searches are also up

Properties are currently viewed an average of 1694 times on realestate.com.au – up from 819 in March 2020.

“This growth can be attributed to several factors, including record-low borrowing costs, government support packages for first-home buyers and limited available stock,” the REA report states.

Buyers are also on the hunt for more expensive properties than they were a year ago.

The percentage of searches for properties valued between $750,000 and $2,000,000 has increased to 52% in 2021, up from 47% in 2020.

Get in touch today to find out more about pre-approval

Make no mistake: competition amongst buyers is fierce.

More people are house hunting for more expensive properties, with fewer days to secure finance for the home of their dreams.

This all highlights the importance of exploring your borrowing options with us in advance, in order to increase your chances of securing a property in this hot market.

COVID-19 repayment amnesty over: how to avoid a bad credit rating

COVID-19 repayment amnesty over: how to avoid a bad credit rating

8 Apr 2021 | News, Personal Finance

The COVID-19 loan deferral program and credit reporting amnesty is now over, which means banks will report any late repayments on mortgage or small business loans to credit agencies unless you’ve entered into a hardship arrangement.

The banks’ mortgage deferral program and subsequent credit score reporting amnesty officially ended on April 1.

The package was created during the peak of COVID-19 to provide loan repayment relief for almost one million home and business loan borrowers facing financial hardship.

Luckily, many people have since been able to resume their repayments – as of late February, just 2,803 small business loans (1.2%) and 22,480 housing loans (5%) were still deferred, figures show.

But, we’re not out of the woods yet.

The JobKeeper wage subsidy scheme has also just officially ended, which has the potential to put tens of thousands of households and businesses at risk once more.

If you think you might be impacted by JobKeeper, read on

Latest reports indicate up to 150,000 workers could lose their jobs this month due to JobKeeper ending.

If your ability to repay your home or small business loan might be affected in the months ahead, then it’s important to act now, rather than wait until after you’ve missed a repayment.

That’s because by then it could be too late and it might end up on your credit file.

Your most appropriate course of action, however, will depend on your individual circumstances, which we’ve broken up into two categories below.

Category 1: Repayments will be tight, but possibly doable

If your upcoming loan repayments are looking tight, but possibly doable, then get in touch with us today to discuss some financing options that might make your repayments more manageable.

These options might include:

– switching to interest-only repayments for a period of time,
– renegotiating your rate with your current lender,
– refinancing to another lender,
– debt consolidation, or
– a combination of these and other measures.

Category 2: You don’t think you’ll be able to make your repayments

If you’ve lost your job due to JobKeeper ending, for example, and the chances of making your repayments are looking a little grim, then it’s important to get in touch with your bank today to discuss entering into a hardship arrangement.

Not only will this potentially give you some breathing space on your repayments, but it will help keep any missed payments off your credit file, as the Australian Banking Association states below:

“For customers that enter into another form of hardship or forbearance arrangement with their bank, banks will not report the repayment history information. Instead, they will leave the field blank for the duration of the arrangement.”

If you’d like to discuss any of the above in further detail please don’t hesitate to get in touch today – we’re here to help any way we can.

Fixed mortgage rates set to rise in coming months: experts

Fixed mortgage rates set to rise in coming months: experts

1 Apr 2021 | Interest Rates, News, Personal Finance, Property

House prices could jump 17% in 2021 and mortgage rates are set to rise much sooner than expected, ANZ Bank has tipped.

How much earlier than expected?

Well, the Reserve Bank has repeatedly said the official cash rate isn’t likely to increase for a few years, but ANZ senior economist Felicity Emmett believes fixed-mortgage rates have already reached their lowest point, or close to it.

In recent times, more than 30% of new loans have been at fixed rates, says Ms Emmett, with two to three-year fixed-term interest rates available below 2%.

But that’s unlikely to be the case for much longer, she believes.

“In the second half of the year these sub-2%, three-year fixed rates that we’re seeing advertised at the moment are less likely to be around,” says Ms Emmett.

“Cheaper funding is not available forever and that will feed through into variable mortgage rates too.”

Shane Oliver, Chief Economist at AMP Capital, also believes fixed mortgage rates “have already started to bottom out”.

“It’s likely that the 30-year tailwind for the property market of falling interest rates has now run its course and longer dated fixed rates (4+ years) are starting to rise,” adds Mr Oliver.

Wait, did you say ANZ is tipping property prices to increase 17%?

That’s right. ANZ economists expect house prices to rise by a “sharp” 17% across the capital cities in 2021.

They’re tipping Sydney and Perth to perform best with 19% growth, followed by Hobart (18%), Melbourne and Brisbane (16%), and Adelaide (13%).

ANZ’s forecast is much more bullish than those of Commonwealth Bank and Westpac, which in February predicted price increases of 8% and 10% respectively.

Ms Emmet says low housing stock levels are combining with FOMO (fear of missing out) to help drive up the market.

“Buyers are taking advantage of historically low interest rates, particularly fixed rates, as well as various government support programs,” Ms Emmet said.

Got a bit of FOMO yourself?

After the relative hibernation of last year, there’s certainly a lot going on in the world of property and finance right now.

So, if you’d like to chat to us about financing a new home you’ve got your eye on, or refinancing your existing loan, get in touch today and we’ll help sort out that FOMO for you.

How do you compare: how much of your pay goes to your mortgage?

How do you compare: how much of your pay goes to your mortgage?

26 Mar 2021 | Personal Finance

The property market is going through a boom phase, which means housing affordability is getting tougher. So how much does the average Australian household need to put towards their monthly home loan repayments in the current market? Let’s take a look.

You’ve probably noticed the housing market is going a bit crazy at the moment.

FOMO has taken hold and many properties across the country are selling well above their reserve.

As such, housing affordability has deteriorated, says Moody’s Investor Service, reversing the improving trend seen in 2020 during the peak of the coronavirus crisis.

So what percentage of a pay cheque goes towards a typical home loan?

On average, two-income households need to put aside a quarter (24.6%) of their monthly income to meet repayments on a new home loan, as of February 2021.

That’s up from 22.7% in June and July 2020, when new mortgages were the most affordable they’ve been in a decade.

The deterioration in housing affordability was evident in all capital cities over the five months to February 2021, with Perth remaining the most affordable and Sydney the least.

That said, housing affordability still remains better than the ten-year average of 26.1% and well under its peak of 30.7% in April 2011.

That’s because the average mortgage interest rate has nearly halved to 3.65% since 2011, according to Moody’s.

Want to know how much you can borrow?

Got your eye on an exciting new property and want to know if you can get a loan for it?

Get in touch today and we’ll help you crunch the numbers, work out your borrowing capacity, and discuss your finance options.