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Hats off to Australia’s first home buyers! The latest lending data shows they’re refusing to let last year’s rate hikes and rising property values dampen their goal of buying a home. Here are five tips to help you buy your first home in 2024.
You’ve gotta hand it to first home buyers in the current market.
Not only were they faced with 13 cash rate hikes in just 18 months – which can obviously affect borrowing capacity – but property prices still rose 8.1% in 2023, according to CoreLogic.
Still, they won’t be deterred.
The latest lending data from the Australian Bureau of Statistics shows a massive 20.3% jump in the number of loans to first home buyers last year.
But it takes more than grit and determination to buy your first home. A few handy hints can also help.
If you’re hoping to buy your first home, below our top tips can help you become home loan-ready in 2024.
First home buyers are often unsure about what’s involved in buying a home. That’s fair enough.
We can help you know where you stand in terms of loan approval, the costs you should plan for, and the steps you can take now to help improve your finances.
Lenders like to see you have a decent track record of regular saving. It shows you have the discipline to manage home loan repayments.
Take a look at your budget, work out where you can trim back, and consider funnelling as much into savings as possible.
It may mean cutting back on luxuries and treats for a while but it’s not forever. And the more you save now, the less you potentially need to borrow.
When you apply for a home loan, lenders are often more interested in the limit on your credit card than the balance outstanding.
That’s because you could, in theory, max out your card after buying a home, which may affect your ability to manage mortgage repayments.
The average card limit is about $9,500, according to a Finder analysis of RBA data.
Shrinking this down (with a quick call to your card issuer) might get you over the line for the loan you need.
There’s a tonne of potential support for first home buyers – from First Home Owner Grants (FHOG) to possible savings on stamp duty.
We can explain what you might be eligible for, but research of your own can narrow down your choice of property.
Some support payments are only available if you buy or build a new home, and many have property price caps.
Sure, a 20% deposit is a target worth aiming for.
But you may be able to buy with less.
The First Home Guarantee and Regional First Home Buyer Guarantee let first home buyers get into the market with just a 5% deposit and no lenders mortgage insurance.
That might mean you’re ready to buy now!
Call us today for a chat about buying your first home, and discover how we can help you find a home loan that matches your needs at a competitive rate.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Australian homeowners are loading up their offset accounts in record amounts, so much so that the average household is now almost four years ahead on their mortgage payments.
Quick question: do you have an offset account (or several) attached to your mortgage?
They’ve become quite popular in recent years, especially since the RBA’s official cash rate has hit record low levels and impacted the amount of interest you can earn in savings accounts (which we’ll explain in more detail further below).
Research from the Australian Prudential Regulation Authority (APRA), provided to The Australian, shows the average balance sitting in offset accounts is now nearly $100,000 – up almost $20,000 since the pandemic kicked off in March 2020.
In total, $222 billion was in offset accounts across the country as of September 2021 – up almost $50 billion from $174 billion in March 2020.
In fact, in the September 2021 quarter alone, offset account balances increased by 10%.
All of this has helped contribute to mortgage holders now being, on average, 45 months ahead on their repayments – up from 32 months prior to the pandemic.
In terms of the various ways Australians have gotten ahead, 57% of prepayments came from offset accounts, 40% via available redraw balances, and 3% through other excess repayments.
Basically, an offset account is a regular transaction account that is linked to your home loan.
The advantage is that you only pay interest on the difference between the money in the account and the mortgage.
Some banks allow you to have 10 offset accounts attached to your mortgage, too, with cards linked to them that you can use for everyday spending.
Say you owe $350,000 on your mortgage, and have $50,000 in a savings account.
If you move that $50,000 into a full offset account, you’ll only pay interest on $300,000 (which is the loan value minus the amount in your offset account).
The offset account can then continue to be used for all your daily needs, like receiving your salary or withdrawing cash.
With the RBA’s cash rate at record low levels, the interest rate you’ll receive on the balance in your bank’s savings account is also at record low levels too.
Say for example that you had a savings account with a 1% interest rate and a mortgage with a 2.2% interest rate.
By allocating money into your full offset account, you’d save more money on interest than you would earn in your savings account.
Additionally, interest on your savings accounts is subject to tax, whereas the interest-saving on your mortgage isn’t.
Of course, there are additional factors you’ll want to consider, such as account keeping fees and the minimum amount needed in the account to make it useful.
And obviously, savings accounts and offset accounts are not the only two places you can park your hard-earned money. Depending on your risk appetite, there are other options you could consider that might yield a higher return.
The long and the short of it is everyone’s situation is different, but if you think an offset account might be for you, get in touch and we can help you explore your options.
For expert help in structuring finance https://calendly.com/fmsloans or call 0425341086
I'm not sure that foreigners are abandoning Sydney and Melbourne just yet.
NAB's September quarter residential property survey, which is a survey of market participants, reported that foreign buyers accounted for an incredible 19.4% (houses) and 16.5% (apartments) share of established sales in Victoria (which really means Melbourne), and 9.9% (houses) and 9.3% (apartments) sales in New South Wales (Sydney).
They're still very big numbers.
And the shares are even higher for newly constructed dwellings, with 28.5% (houses) and 26.0% (apartments) of sales in Victoria going to foreigners, whereas the share in New South Wales was 15.5% (houses) and 10.9% (apartments).
For further information please don't hesitate to contact Finance and Mortgage Solutions on our website.
If you have a #garage and you're not using it to park your car, you have a lot of wasted space that you could be putting to good use.
A garage has all the basic elements of a livable space, all you need to do is add what's missing and you can convert your garage into a home office, #spare bedroom, or even a self-contained granny flat.
How much does a garage conversion cost?
A garage conversion can set you back anywhere between $10,000 and $40,000, depending on its inclusions. Keep in mind that this is still much less than the cost of a home addition or extension.
How do you make a garage 'livable'?
Your garage already has a 'house shell' - a concrete slab, walls and a roof. If you look at it as an unfinished house, you can really see the potential. To make it habitable, you need to add:
1. insultation 
2. internal cladding
3. a ceiling
4. flooring
5. lighting
6. entilation
7. heating and cooling
If you're ready to go ahead with your garage conversion, or just need a helping hand with a job around the home, no matter where you live you can contact 0425341086 or Finance and Mortgage Solutions on our website.
First home buyers in NSW can currently receive $10,000.
| New homes | Existing homes | Vacant land |
|---|---|---|
| Buy a new home valued at less than $650,000, apply for a full exemption, and pay no transfer duty.Buy a new home valued between $650,000 and $800,000, and apply for a concessional transfer duty rate. The amount will be based on the value of your home. | Buy an existing home valued at less than $650,000, apply for a full exemption and pay no transfer duty.Buy an existing home valued between $650,000 and $800,000, apply for a concessional transfer duty rate. The amount will be based on the value of your home. | You won’t pay transfer duty if your land is valued at less than $350,000.For land valued between $350,000 and $450,000, you’ll receive a concessional rate. |
For further information or just some innovative financial advice please don't hesitate to contact Finance and Mortgage Solutions today on 0425341086 or visit our contact page.
Ever dreamed about telling your boss to “shove it” and starting up your own business? Well, there’s been a big jump in Millennials and Gen Zs who are saving up to do just that (well, maybe except for the “shove it” part!).
There’s something romantic about the notion of starting your own business.
You know, opening up a hole-in-the-wall cafe or little alleyway bar, growing a loyal band of merry locals, and waxing lyrical with them into the wee hours of the morning.
Of course, as any small business owner will attest, the realities of running a business are very, very different.
Say one thing for the Millennials and Gen Zs of the country, and that is that they’re an entrepreneurial bunch who won’t let something like a once-in-century-pandemic get in the way of their business aspirations.
According to a ME Bank survey of young Australians with no children, 18% stated their current financial goal was “investing in their own business”.
That’s up from just 4% six months prior!
To put that into a bit of perspective – compared to some of the other 15 options they could choose from – the top response was “paying off a mortgage” at 34%, while 19% of respondents were aiming to “save enough to buy a property to live in”.
So, not far behind the top two responses at all!
What a lot of young Australians don’t realise is that you don’t have to bootstrap your way into starting up a business.
There are finance and funding options we can help you explore to accelerate your launch – and they’re not as scary as they might sound (5-in-6 businesses don’t find it difficult to pay back their business loans).
So whether your financial priority in 2022 is starting your own business, or trying to buy your first home, get in touch with us today. We’d be excited to help you take that first step.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
It’s a three-speed property market across the country right now, with two capital cities showing signs prices might’ve peaked, three cities looking like they could soon peak, and three still going strong. How is the market performing in your neck of the woods?
While national housing prices have increased a staggering 20.6% over the past 12 months, every capital city and broad ‘rest-of-state’ region is now recording a slowing trend in value growth, according to the latest CoreLogic figures.
However, some areas are faring better than others, as we’ll run you through below.
Sydney and Melbourne showed the sharpest slowdown in February, with Sydney (-0.1%) posting its first decline in housing values in 17 months (since September 2020), while Melbourne housing values (0.0%) were unchanged over the month.
That’s a pretty big drop off for Sydney in particular, which recorded 0.6% growth in January, while Melbourne recorded 0.2%.
A major contributing factor to this slowdown is that there’s now more property stock for buyers to choose from.
In Melbourne, advertised stock levels are now above average and tracking 5.5% higher than a year ago, while in Sydney advertised stock is 6.3% higher than last year.
CoreLogic’s director of research Tim Lawless says more choice translates to less urgency for buyers and some empowerment at the negotiation table.
“The cities where housing values are rising more rapidly continue to show a clear lack of available properties to purchase,” Mr Lawless explains.
The three capital cities that showed signs of slowing down in February – but not yet peaking – are Perth (0.3%), Canberra (0.4%) and Darwin (0.4%).
To put those figures into context, in January Perth (0.6%), Canberra (1.7%) and Darwin (0.5%) all recorded higher housing growth figures.
And over the past 12 months, Perth (8.3%), Canberra (23.8%) and Darwin (12.3%) have all performed quite strongly.
Conditions are easing less noticeably across Brisbane (1.8%), Adelaide (1.5%) and Hobart (1.2%).
Similarly, regional markets have been somewhat insulated from slowing growth conditions, with five of the six rest-of-state regions continuing to record monthly gains in excess of 1.2%.
The stronger housing market conditions in Brisbane and Adelaide in particular can be seen in the quarterly growth figures, with Brisbane housing values rising 7.2% over the past three months, and Adelaide up 6.4% over the same period.
So while Brisbane and Adelaide have slowed down a touch, a shortage of listings in those markets is helping to keep pushing prices up.
“Total listings across Brisbane and Adelaide remain more than 20% lower than a year ago and more than 40% below the previous five-year average,” explains Mr Lawless.
“Similarly, the combined rest-of-state markets continue to see low advertised supply, 24.9% below last year and almost 45% below the five-year average.”
With property prices slowing down around the nation, now’s a good time to take stock and work out what you can and can’t afford over the year ahead – be that buying your first home or adding to your investment portfolio.
And part of that process is finding out your borrowing capacity before you start house hunting, so you don’t stretch yourself beyond your limits.
So if you’d like to find out what you can borrow – and therefore afford to buy – get in touch today.
We’d love to sit down with you and help you map out a plan for your 2022 finance and property goals.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Keen to tackle a renovation project in 2022? You might have noticed that tradies are hard to pin down at the moment. So if you live in one of the suburbs in this week’s article, you might want to get the ball rolling sooner rather than later…
If you’ve ever watched The Block, you’ll know that a good team of reliable tradies can be the difference between a home reno project running smoothly, and everything going to hell in a handbasket.
But where in the world are all the good tradies right now?
If you’ve tried to source one recently for your own reno project, you might’ve noticed that quotes are up, calls are going unanswered and unreturned, and wait times are through the (unfinished) roof.
Well, it turns out Australians have been spending record amounts on renovations, which in turn has led to a surge in tradie demand.
“Home renovations have boomed nationwide as more time spent at home combined with ultra-low loan rates, government grants and improved household savings became the perfect combination of factors to drive heightened demand for renovations,” explains PropTrack senior economist Eleanor Creagh.
Like most things in the world of property and finance, some areas are busier than others.
Below are the top ten most in-demand suburbs in each state, according to online tradie directory hipages, as well as the most in-demand suburbs across the country.
National: Point Cook (Vic), Berwick (Vic), Craigieburn (Vic), Frankston (Vic), Kellyville (NSW), Werribee (Vic), Tarneit (Vic), Blacktown (NSW), Baulkham Hills (NSW), Castle Hill (NSW).
NSW: Kellyville, Blacktown, Baulkham Hills, Castle Hill, Quakers Hill, Campbelltown, Sydney, Penrith, Schofields, Maroubra.
VIC: Point Cook, Berwick, Craigieburn, Frankston, Werribee, Tarneit, Melbourne, Truganina, Pakenham, Hoppers Crossing.
QLD: Buderim, Southport, Upper Coomera, Surfers Paradise, Robina, Coomera, Forest Lake, Brisbane, Helensvale, Springfield Lakes.
WA: Canning Vale, Baldivis, Mandurah, Dianella, Scarborough, Thornlie, Willetton, Perth, Morley, Armadale.
SA: Adelaide, Morphett Vale, Hallett Cove, Mount Barker, Paralowie, Golden Grove, Aberfoyle Park, Parafield Gardens, Prospect, Mawson Lakes.
ACT: Kambah, Canberra, Ngunnawal, Belconnen, Amaroo, Gordon, Wanniassa, Gungahlin, Banks, Casey.
TAS: Hobart, Devonport, Launceston, Glenorchy, Sandy Bay, Kingston, Howrah, Lenah Valley, Claremont, Bellerive.
NT: Alawa, Darwin, Anula, Archer, Bakewell, Bagot, Alice Springs, Darwin City, Palmerston, Durack.
With wait times for reliable tradies blowing out, and supply chain issues when it comes to materials like timber also causing disruptions, the last thing you need is more delays to your reno project due to finance complications.
And that’s where we come in.
Not only can we help you secure funding at a great rate, but we can also help you select a loan that allows flexibility for any unforeseen contingencies along the way.
So if you’d like to explore your reno finance options, get in touch today – we’d love to help you turn your 2022 reno dreams into a reality.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Construction costs just rose at the fastest annual pace since 2005. So why is it getting so expensive to build your own home? Today we’ll look at the materials that are becoming more expensive and why all homeowners should take note – not just renovators and builders.
“Your grandpa built this place with his own two hands”, or so your dad used to boast.
So if Pop could do it with his trusty hammer, some nails, and a bit of hard yakka, why is it so expensive to build a home of your own these days? (Your own handiwork inadequacies aside…)
Well, for starters, national construction costs increased 7.3% in the 2021 calendar year alone, which was the highest annual growth rate since March 2005.
And the not-so-great news is that property market data company CoreLogic is expecting growth in residential construction costs to remain above average over the coming quarter as supply chain disruptions persist.
“There is a significant amount of residential construction work in the pipeline that has been approved but not yet completed,” explains CoreLogic research director Tim Lawless.
Data shows that cost increases are being driven primarily by timber (mostly structural timber).
In fact, in the final quarter of 2021, the value of select wood imports reached their highest level on record, says Housing Industry Association (HIA) economist Thomas Devitt.
“Timber is predominantly produced domestically but excess demand, such as in a boom year like 2022, is largely sourced from overseas markets,” says Mr Devitt.
Other segments of the market also remain volatile, with increasing pressure currently on metal costs.
“With some materials such as timber and metal products reportedly remaining in short supply, there is the possibility some residential projects will be delayed or run over budget,” adds Mr Lawless.
And with building approvals for detached housing recording their strongest year on record in 2021 (with 150,000 approvals), demand isn’t expected to slow down anytime soon.
“This boom is set to keep builders busy this year and into 2023,” adds Mr Devitt.
Mr Lawless says: “With such a large rise in construction costs over the year, we could see this translating into more expensive new homes and bigger renovation costs, ultimately placing additional upwards pressure on inflation.”
Higher construction costs are likely to add to affordability challenges in the established housing market, making it harder for homeowners to upgrade.
And CoreLogic Head of Insurance Solutions Matthew Walker warns that higher building costs mean homeowners and property investors should also review their insurance cover.
“In these times of rapidly rising home and construction costs, under insurance can quickly become a real threat to what is a most valuable asset,” says Mr Walker.
“It’s important that homeowners keep track of their sum insured and annually check that it is sufficient should the worst occur by using their insurer’s rebuild calculator or giving them a call.”
Finding the right kind of finance for a construction project can be tricky at the best of times – let alone when building supplies are becoming more expensive and wait times are blowing out due to supply constraints.
That’s why it’s important to team up with a professional like us when looking for a construction loan.
Not only can we help you secure a great rate, but we can also help you select a loan that allows flexibility for any unforeseen contingencies.
So if you’d like to explore your options for your next building or reno project, then get in touch today – we’d love to help you map out a plan for your 2022 building and property goals.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Ever dreamed about telling your boss to “shove it” and starting up your own business? Well, there’s been a big jump in Millennials and Gen Zs who are saving up to do just that (well, maybe except for the “shove it” part!).
There’s something romantic about the notion of starting your own business.
You know, opening up a hole-in-the-wall cafe or little alleyway bar, growing a loyal band of merry locals, and waxing lyrical with them into the wee hours of the morning.
Of course, as any small business owner will attest, the realities of running a business are very, very different.
Say one thing for the Millennials and Gen Zs of the country, and that is that they’re an entrepreneurial bunch who won’t let something like a once-in-century-pandemic get in the way of their business aspirations.
According to a ME Bank survey of young Australians with no children, 18% stated their current financial goal was “investing in their own business”.
That’s up from just 4% six months prior!
To put that into a bit of perspective – compared to some of the other 15 options they could choose from – the top response was “paying off a mortgage” at 34%, while 19% of respondents were aiming to “save enough to buy a property to live in”.
So, not far behind the top two responses at all!
What a lot of young Australians don’t realise is that you don’t have to bootstrap your way into starting up a business.
There are finance and funding options we can help you explore to accelerate your launch – and they’re not as scary as they might sound (5-in-6 businesses don’t find it difficult to pay back their business loans).
So whether your financial priority in 2022 is starting your own business, or trying to buy your first home, get in touch with us today. We’d be excited to help you take that first step.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
