Mortgage News

Personal loans for items such as cars and boats are making a comeback on the tailcoats of an increasingly strengthening economy reports SMH. Fixed term loans for such items has risen by up to 38% from the lowpoint back in November 2008. The major banks have captured most of this growth. The unsecured loans are also out growing new credit cards, with increased job security allowing consumers to make more moves on bigger items such as cars.

Simon Reibelt from Oasis Home Loans Northern Beaches said this was another indication that consumers have found more confidence in borrowing, leading to a stronger housing market.

SMH has reported that Sydney tenants should be ready due to the end of the downturn in 2009, landlords may seek to increase rents as a stronger economy returns. A combination of low new building approvals, increased land taxes, low vacancy rates, stronger economy & incentives for first home buyers ending would drive rental prices up. Most suburbs around the inner west, north shore and northern beaches would be affected most by these factors. Simon Reibelt from Oasis Home Loans Northern Beaches said that due to the increasing rental prices that would be forthcoming in 2010, some renters could look at entering the property market as interest rates were still quite low.

Mortgage Business news has reported that the areas of Sydney’s Inner West, Warringah and Pittwater have become the strongest locations for property land value rises, beating the tradtional areas of the Eastern Suburbs and Lower North Shore. It was reported that some of the priciest areas were actually some of the worst performing postcodes, as the downturn affected the most expensive suburbs the hardest. Simon Reibelt from local brokerage Oasis Home Loans Northern Beaches saw this as a great time for both new home owners and property investors to consider either entering or re-entering the marketplace to make most of these property value increases.

SMH reports renters in the Northern Beaches may face increasing pressure this year as land valuations push land taxes up, causing landlords to increase their rental prices. New valuations figures form the basis for tax assessments sent out by the Office of State Revenue which will occur next month. The ATO states there are about 500,000 property investors in NSW, of which 150,000 of those pay land tax. These rise in valuations coincides with the forecasts of strong growth in the property market after a very flat 2009. Northern Beaches renters may find themselves being impacted by these movements. Oasis Home Loans Northern Beaches broker Simon Reibelt saw this as a sign for current renters to considering looking at obtaining mortgage instead of possibly facing increased renting costs.

With rising house prices especially for homes at the price scale for a first home buyer and also the added pressure of economic uncertainty younger people are choosing to stay in their current living circumstance with their parents. However it seems more parents then not feel compelled to help out their children with cash hand -outs to help purchase the children’s property.

Unfortunately this seems to in most cases only hurt the kids because they become accustomed to a lifestyle that they cannot afford and in the long term this is only to hurt them financially and possibly give them a bad credit history because they cannot afford the lifestyle their parents helped them establish. To Avoid this situation consulting a finance professional is a good option.

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2010 looks to be a challenging year with household living costs on the rise, it seems gone are the days of buying lunch & they have been replaced with the home packed vegimite sandwiches. Households look like they will be needing to find an extra $76 a week with these costs to affect people Australia wide.

However this cost rise will not only affect what we choose for lunch but also will directly influence home loan rates. Home loan rates are forecasted to rise by one percentage point this year. E.g. On A $300,000 mortgage this will then add another $44 a week to your repayments.

Unfortunately these will not be the only rates to rise with Electricity bills, Private school fees and even CityRail tickets just to name a few to rise.

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At the end of 2009 it was obvious that the reserve banks decision of three consecutive rate rises and the end of the first home buyers would have a major impact on the property market with fewer first home buyers and fewer sellers are able to upgrade to a new property.

Over the past 3 months new mortgages for first home buyers fell by 39% while sales to established home owners were down by 19.1% & investors falling 3%.

With this situation on the rise people purchasing property will feel uneasy tow.

Graham Reibelt from Oasis Home Loans quotes: “As long as banks continue to raise rates above RBA increases non bank lenders will continue to be more attractive to borrowers”

SMH has recently reported that Westpac customers in the Northern Beaches who were angry with the Bank may be inclined to seek other finacnial instituations after its (Westpac’s) oversized rate rise in December last year.

AFG stated that  a large proporation of its business last month was originating from Westpac cusomters switching over from the lender. AFG would not state exactly how many people were refinancing, though the Commonwealth Bank made up a large source of its mortgages from these replacements.