Spratt Mortgages

09/08/2023

In good news for buyers, there's been an increase in the number of properties listed for sale, as well as an increase in the total number of properties on the market.

SQM Research has reported that the number of new listings (i.e. those less than 30 days' old) in June was 1.6% higher than the month before.

At the same time, the number of for-sale properties – which includes both new listings and older ones – was 1.8% higher than the month before.

So more homeowners are listing their property for sale and those homes are taking longer to sell.

With more properties on the market, buyers have more choice, which means they don’t have to compete as hard on price. In the month to 4 July, there was a 2.0% reduction in prices being asked by vendors.

Given that market conditions are favouring buyers in many parts of the country, this might be a good time to buy. Contact me if you’d like me to find you a great home loan.

07/08/2023

The deadline for existing HomeBuilder applicants to submit supporting documentation has been officially extended to 30 June 2025.

The deadline was previously set at 30 April 2023, but, in March, the federal government proposed to extend it, subject to the agreement of states and territories – which has now been secured.

This extension applies only to people who had already received formal approval under the HomeBuilder scheme for off-the-plan purchases or renovations. Applicants do not need to do anything to access the extension – it will automatically apply.

The reason the government extended the deadline was to support people who had entered into financial commitments on the basis they'd received the grant, but, through no fault of their own, were unable to use it due to supply constraints and construction industry delays.

Applications for HomeBuilder closed in April 2021. States and territories administer the scheme on behalf of the federal government.

03/08/2023

The Reserve Bank of Australia (RBA) has unveiled a series of reforms, in response to an independent review commissioned by the federal government.

Starting in 2024, the RBA board will meet eight times per year to assess the cash rate, rather than the current 11. Meetings will last longer; and, before each meeting, board members will have the opportunity to speak with a broader range of RBA staff.

"The less frequent and longer meetings will provide more time for the board to examine issues in detail and to have deeper discussions on monetary policy strategy, alternative policy options and risks, as well as on communication," RBA governor Philip Lowe said.

“Likewise, the staff will have more time for analysis, with less time spent preparing summaries of recent developments.”

In another change, the governor will hold a media conference after each cash rate meeting, which “will provide a timely opportunity to explain the board’s decisions and to answer questions”.

Meanwhile, the federal government has decided not to grant Governor Lowe a second seven-year term. As a result, the current deputy, Michele Bullock, will assume the top job in September when Governor Lowe's term expires.

01/08/2023

09/03/2023

Evidence is emerging that the national housing market downturn, which began in May 2022, is slowing.

CoreLogic has reported that the nation's median property price fell 1.0% in January – the smallest month-on-month decline since June 2022.

Meanwhile, while the national median price fell 4.1% in the October quarter, it fell only 3.2% in the January quarter.

Here’s how much prices fell in each capital city in both the three months to January and the three months to October:

* Perth -0.1% (was -0.7% in October quarter)
* Darwin -0.4% (was 0.0%)
* Adelaide -1.5% (was -0.6%)
* Melbourne -3.1% (was -3.1%)
* Canberra -3.4% (was -4.3%)
* Sydney -3.9% (was -5.3%)
* Brisbane -4.8% (was -5.4%)
* Hobart -5.5% (was -4.1%)

In other words, while prices are still decreasing, they're doing so at a decreasing rate.

Reach our if you are looking to buy a property.

05/03/2023

Despite the recent housing downturn, property prices are higher in most parts of the country than before the pandemic. As a result, deposit requirements are higher.

Domain compared property prices in the December quarters of 2019 and 2022, and found that buyers needed tens of thousands of dollars more today if they wanted to buy a house and put down a 20% deposit.

The increase in 20% house deposits for our four biggest cities was:
* Sydney $55,709 increase between 2019 and 2022
* Melbourne $25,995
* Brisbane $43,560
* Perth $25,697

While the deposit barrier is high, it’s not insurmountable.

As an expert mortgage broker, I can potentially help you enter the market with a low-deposit loan. Generally, if your deposit is lower than 20%, you will need to pay lender’s mortgage insurance (which can be added to your loan). While it’s never nice to pay an added fee, it can be money well spent if it lets you buy a property several years ahead of schedule.

Give me a call to discuss your situation.

03/03/2023

There was a steady decline in the amount of new residential construction that was approved during 2022, according to the latest data from the Australian Bureau of Statistics.

A total of 188,765 home building approvals were issued in 2022, compared to 226,629 the year before – a reduction of 16.7%.

Although approval numbers jumped around throughout 2022 – higher in some months, lower in others – the clear trend was down.

“Much of the decline between 2021 and 2022 was the expected consequence of the end of the HomeBuilder grant in 2021,” Housing Industry Association chief economist Tim Reardon said.

“The market was also cooling as the cost of construction rose, and the change in consumer preferences due to the pandemic desire for space, eroded.”

Mr Reardon said builders are still working through a “significant pipeline of work”, and that the slowdown in building approval numbers “will not hit building activity on the ground until late 2023”.

Need a construction loan? Let's talk!

01/03/2023

The rental market has turned decisively in favour of property investors, with the number of vacant rental properties plummeting by one-third over a 12-month period.

Between January of 2022 and 2023, the number of rental vacancies across Australia fell from 47,977 to 31,592, a reduction of 34.2%, according to SQM Research.

At the same time, the vacancy rate – which measures the share of untenanted rental properties – fell from an already-low 1.6% to just 1.0%.

Vacancy rates differ from city to city, but are low throughout the country, ranging from 0.4% in Perth to 1.6% in Canberra.

SQM Research managing director Louis Christopher said low vacancy rates were contributing to a “surge in rents”, which in turn was pushing up rental yields.

“I believe would-be investors will be attracted to higher rental yields in later 2023, provided the cash rate peaks at below 4% [it's currently 3.35%],” he said.

Get in touch if you need an investment loan.

27/02/2023

09/02/2023

While inflation continues to be worryingly high, it may have peaked.

The Australian Bureau of Statistics’ latest data show that inflation rose from 6.9% in October to 7.3% in November.

In early December, the Reserve Bank of Australia (RBA) forecast that inflation would "peak at around 8%" in December.

If that’s the case, inflation may already be cooling – even though the next inflation announcement (of the December result) may show an increase on the previous period.

Inflation is expected to decline in 2023 "due to the ongoing resolution of global supply-side problems, recent declines in some commodity prices and slower growth in demand", according to the RBA, before falling further in 2024, to "a little above 3%".

The RBA has said that high inflation "damages our economy and makes life more difficult for people", so it’s determined “to re-establish low inflation and return inflation to the 2-3% range over time".

08/02/2023

06/02/2023

Home building costs continue to rise sharply, but it appears the worst is behind us.

Residential construction costs rose 11.9% during 2022, after climbing 7.3% in 2021, according to CoreLogic’s Cordell Construction Cost Index (CCCI).

The 2022 result was the largest annual increase on record, apart from the period impacted by the introduction of the GST.

However, the pace of growth appears to be slowing: prices increased 4.7% in the September quarter, but only 1.9% in the December quarter.

CoreLogic construction cost estimation manager John Bennett said, in 2023, costs would be unlikely to rise at the same rapid pace as in the recent past, because rising interest rates and inflation have made consumers, builders and suppliers more cautious.

Analysing the price increases, Mr Bennett said:
- Volatile timber prices are affecting the cost of structural timber and general timber products
- Prices continue to increase for metal products, such as gutters, lintels and fixings, which are used for roofing and structural purposes
- Petrol price increases are affecting cartage and delivery costs, including for concrete and rainwater tanks
- Gravel, aggregates and fill prices have increased, possibly affected by the rise in petrol prices
- Costs have also increased for appliances and fittings

Get in touch if you need assistance with a building loan.