Mortgage Sphere

08/06/2023

Instant asset write-off ending soon

Businesses that are considering capital purchases in the near future should have a conversation with their finance broker to see if they can maximise these incentives before they end.

The government tax incentives, such as Temporary Full Expensing of Depreciating Assets (TFEDA) and Temporary Loss "Carry Back" opportunities are due to expire by the end of the financial year (EOFY) 2023, and businesses still have the opportunity to benefit.

TFEDA allows businesses to deduct the cost of eligible capital assets acquired from Budget Night 2020 and first used by June 30, 2023, while Temporary Loss "Carry Back" opportunities enable eligible companies to offset tax losses from specific income years against previously taxed profits.

Strategic planning can help companies make the most of these incentives, resulting in substantial savings as we approach EOFY 2023.

30/05/2023

22/05/2023

Regional areas and high-end Sydney suburbs lead the bounce back in property prices

Affordable regional areas and high-end Sydney suburbs dominate the list of suburbs bouncing back the fastest, according to CoreLogic.

CoreLogic’s Property Pulse found that of the top 25 performing suburbs this quarter, 20 are located in regional Australia, spread across SA, VIC, NSW, WA and QLD.

According to CoreLogic, Robe in South Australia was the strongest-performing location over the past three months, growing 8.3 per cent, along with Dinner Plain in Victoria (8 per cent), Trangie (7.4 per cent) and Werris Creek (7.1 per cent) in NSW and Kalbarri in WA (6.9 per cent).

CoreLogic said more affordable locations in regional areas have been seeing demand from buyers.

The report said it has been common for regional Australia to dominate growth charts through the pandemic period, but as the cycle has matured, it seems to be more rural regional markets with particularly low price points that have seen the strongest rates of growth.

Dinner Plain in the Victorian Alps, 13km from Mount Hotham, is a striking exception among the top-performing regional suburbs, where values have trended higher following a slight dip through the second half of 2022, the report said.

Along with regional areas, there are also several high-end Sydney suburbs seeing capital growth across the affluent North Sydney and North Shore suburbs.

Top performing locations included East Killara (6.8 per cent), Middle Cove (6.4 per cent) and Warrawee (6.4 per cent).

“These suburbs are largely popular with owner-occupiers, having a higher-than-average owner-occupier rate of 76 per cent, compared to an average 63 per cent across Greater Sydney suburbs,” the report said.

The report also found that Sydney and Perth had the highest portion of suburbs that were seeing growth, while Hobart was continuing to struggle.

“The number of suburbs seeing growth tells us a bit about where these regions are in the cycle,” the report said.

“For example, Hobart had just two suburbs that saw dwelling value increases in the quarter, as the city has moved through a steep peak-to-current decline of -12.9 per cent.

“Steep price falls in the city follow more than seven years of almost uninterrupted growth, so it is somewhat unsurprising to see such an extended, broad-based decline.”

The report said there was a relatively high volume of suburbs experiencing growth across Sydney and Perth, however, they have very different growth dynamics.

“Sydney dwellings are showing signs of a rebound, following a peak-to-trough decline of around 14 per cent over the year to January.”

“Sydney often leads inflections in the housing cycle across capital city markets and may be seeing a relatively high portion of markets in growth because it is moving through to the next cyclical phase.

“Strong recovery has been concentrated in the high end of the market, with the top five performing suburbs having median dwelling values of at least $1.5 million.”

The current upswing could reflect a hangover of the pandemic and the interest rate environment, where affordable, regional property remains desirable, the report said.

03/05/2023

Over the last few years, demand and values in regional Australia has exploded.

With strong capital growth and tight vacancy rates driving up rents, more and more investors have been looking to regional areas. While many regional areas have been strong performers, there are a number of things you should check before investing in these locations.

Local economy
Across the country, there are very big differences in regional locations. Some small towns have only a few hundred people, while the larger towns have over 100,000 and are basically regional cities.

When you’re looking to invest, it’s important to understand what the key drivers of the local economy are in those areas. A great example is a mining town. Many mining towns have very strong economies driven by a local mine site. While the commodity sector is strong these towns do well, but things can quickly turn around when prices fall.

On the flipside, some of the larger towns have multiple economic drivers and include infrastructure such as hospitals and universities that contribute heavily to employment. The more diversified the economy, the stronger the location and the more likely it is to sustain capital growth.

Vacancy risk
In recent times, talking about vacancy rates is not something many investors are likely considering. But over a long period of time, many regional areas have suffered from a lack of quality tenants, which can lead to your property being vacant for a long time.

This is common in seasonal locations and holiday areas. While there might be strong demand during the summer months for a beachside location, during winter, you might not be able to find tenants.

A lot of smaller towns also have problems with social issues which can make it difficult to find tenants that will look after your property.

Finance
Lenders understand that regional areas, while appealing, also present some risk if the value of the property falls due to any number of factors.

For that reason, many will require you to put down a larger deposit than what you could typically find for a city location. This is common with lifestyle properties and things like hobby farms that only suit a certain demographic of buyers.

Lenders will normally have a list of postcodes that you can purchase in with them and it’s worth speaking with your mortgage broker ahead of time to ascertain what lenders are currently thinking about a certain regional area if you’re thinking of buying there.

01/04/2023

Sydney's housing market is showing signs of recovery with values bouncing back by 0.4 per cent since February 7, according to CoreLogic.

The recent data from the CoreLogic Daily Home Value Index (HVI) revealed that dwelling values in Sydney have rebounded by 0.3 per cent over February, reducing the peak-to-trough decline to 13.6 per cent.

Across the other major capital cities, Melbourne and Brisbane home prices both fell 0.4 per cent, Adelaide was 0.2 per cent lower, Perth 0.1 per cent, while values in Hobart dropped 1.4 per cent.

The national index declined 0.14 per cent over the month, the smallest monthly fall since May 2022 when rate hikes commenced.

23/02/2023

Property markets across the country are starting to stabilize after the rapid increase in interest rates dented market sentiment in 2022.

According to PropTrack, property prices fell 0.09 percent in January, led by Canberra (-0.24 percent), Hobart (-1.7 percent), and Melbourne (-0.22 percent). Meanwhile, the smaller capital cities continue to hold up well with Darwin (0 percent) remaining steady and Adelaide down just (-0.14 percent).

PropTrack said although the housing weakness remains geographically broad-based there are signs some momentum has left the housing downturn, with the quarterly trend in housing values clearly pointing to a reduction in the pace of decline across most regions.

Even with the modest declines, PropTrack said prices are down just 4.51 percent from their peak and still well above pre-covid levels.