How strong is the Australian Property market?
On the whole, the Australian property market picked up over the course of the 2012/13 financial year.
With the exception of Hobart, housing in all the capital cities recorded an increase in value.
Capital city home values rose by 3.8 per cent on the back of a 3.6 per cent fall the previous financial year, while values in Hobart fell 1.8 per cent over the past year. Perth has shown a 6.0 per cent increase, the highest increase outside of Darwin, which posted a 6.1 per cent return. Similarly, rental yields are highest in Darwin (6.2 per cent) while in Perth, houses gave a 4.4 per cent rental yield on average and units a 5.1 per cent rental yield. Interestingly this trend can be seen nationally with units tending to post an equal or higher return than houses
What impact will the interest rate cuts have on the property market? And what does it mean for debtors?
In May this year, interest rates were cut by 0.25 per cent, and again in August, bringing the cash rate today to an historic low of just 2.5 per cent. These interest rate reductions, however, were somewhat different than previous cuts; the full rate cuts were passed onto consumers by the majority of lenders, and this provided some relief for those with higher levels of debt.
Are you paying too much interest?
Two years ago, early repayment penalties on variable rate loans were abolished which saw an increasingly large number of borrowers, now free of shackles, able to vote with their feet.In a bid to hold on to clients for longer, lenders reacted to this changing landscape by focusing their marketing efforts on fixed rates, particularly for those with terms of two and three years.
In the struggle for increased market share, low fixed rates have been combined with offers of greater discounts. However these are not usually made available to existing clients.
“What about loyalty? ” I hear you ask! And you’re not alone, as many people have taken this opportunity to review their home loan.
But before you make any decisions, it’s important to remember that whenever your circumstances change, it’s important to consider your options. Why not find out what other opportunities are available so your decision is an informed one?
Please call me on (02) 9411-4161 or email me at gordon@taurusfinancial.com.au for a free no obligation Mortgage Assessment to review your existing Loans to ensure they remain competitive.
The information contained in this newsletter is of a general nature only and does not take into account your particular objectives, financial situation or needs. Accordingly the information should not be used, relied upon or treated as a substitute for specific financial advice. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided. Taurus Financial Services Pty Ltd its directors or staff, nor its employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.