Mortgage News

A report conducted by the Federal Government has stated that it costs about $200,000 more to build in Sydney than any other Capital. The National Housing Supply Council advised that the shortage of housing is estimated at 178,000 dwellings needed and it is only getting worse. SMH has reported that the main cause is a surging population growth which began sometime during 2005.

Simon Reibelt from Oasis Home Loans Northern Beaches stated that the housing shortage would only get worse until the Government could approve more land for Residential construction to keep up with the increasing population figures.

Source: The Age, written by Scott Keck. Executive chairman of Charter Keck Cramer property valuers.April 26, 2010.

As Australia moves towards a housing crisis, solutions lie in looking at who wants what – and considering why.

The residential sector is extremely diverse and affects us all, whether as owners or renters. It is the subject of vigorous debate about increasing demand, insufficient supply and rocketing values.

On the supply side, subdividers, apartment developers, the construction industry and consultants deal with the challenges of a slow planning process, insufficient skilled labour and a lack of credit.

SMH has reported that the combination and increasing trends in larger mortgages and rising interest rates is causing more First Home Owners trouble. With major lenders now at their highest lending exposure levels at all time highs, new borrowers will find it ever harder to borrow as the banks tighten their policies.

Simon Reibelt from Oasis Home Loans Northern Beaches said that anyone looking to enter the market and anyone who has recently entered the property market will be the ones most in focus by lenders.

BIS Shrapnel has reported for SMH that they expect a percentage of First Home Owners (FHO) to re-enter the property market in the second half of this year, after their initial stint back at the start of 2008. The slump after the Government ended it’s assistance injection packages is forecasted to mellow-out, as Upgraders move onto properties in closer proximity to major cities and FHO take up the slack.

Simon Reibelt from Oasis Home Loans Northern Beaches said that FHO should be wary of the projected interest rate rises if they decide to enter the marketplace this year.

According to RP Data and The Housing Industry of Australia, land prices are surging ahead at they’re fastest rate since 2004, causing further problems to Australia’s already stressed property market. Construction and approval figures are lagging behind the inflation of rate land prices which is also adding fuel stated SHM.

Simon Reibelt from Oasis Home Loans Northern Beaches stated that until planning guidelines and approval numbers picked up, the race to secure vacant land for building and development will not stop.

Rising out of the shadow cast by the Global Financial Crisis, Australian property markets have been driving ahead at full force with no sign of giving up, rising by 12% to 14% stated by some sources. Though with any market, we are always needing to know is it heading high or shows signs of receding? The prime problem with looking at these figures is that it is all based on Median housing prices. We seemly ere saved by our Mineral wealthy land, our proximity to the global powerhouse China and protective Banking sector states SMH.

Simon Reibelt from Oasis Home Loans Northern Beaches stated that as long as our culture focuses on the dream of owning property and the security that comes with it, we shall never be deterred from doing as much as ones self can to achieve it.

SMH has reported that the number of  home loans being taken out has dropped for the 5th consecutive month in a row now, leading to speculation by experts that it may be pointing towards property prices loosing steam or possible falling over the next year or so. Loans taken out dropped a further 1.8% in February from January’s slide of upwards of 7% as the Governments incentive scheme ended according to Bloomberg data. Figures reflect the RBA’s seemingly steady interest rate climb as it starts to take a toll on the capacity of borrowers.

Simon Reibelt from Oasis Home Loans Northern Beaches said that as long as the demand for housing remains upwardly strong and outstrips supply, we shall see a continuing trend in the marketplace.

Dr Keen has superimposed those words over a chart comparing falling houses prices in Japan and the US over the past 23 years with Australia’s which remain elevated. Both Japan and the US have seen their real estate bubbles pop in that period.

“To me the irony is I’m marching uphill and house prices will start marching down because as you’ve seen in the lending figures the trend seems to be very strong,” he says.

Homes loans slumped for the fifth consecutive month in February, dropping 1.8 per cent.

“Mortgage debt is now falling. And with falling mortgage debt ultimately you’ll get falling house prices.”

Article courtesy of SMH Business by Mr CHRIS ZAPPONE April 15, 2010 – 7:24AM.

SMH has shown that renters have been given a reprise from increasing rates as previously predicted. The quarterly report comprised by Australian Property Monitors showed many eastern suburbs and inner city rents did not move between December of last year to the end of March.

Effectively, base line affordability is causing rents to stay put as tenants cannot afford anymore increases at this stage. The inner west and lower north shore though showed minor prices increases as demand surged.

Simon Reibelt from Oasis Home Loans Northern Beaches stated that tenants should be aware that rental increase always lag behind interest rate rises as landlords readjust and evaluate their own financial position moving forward.

SMH has reported that buyers are leaving the Sydney property market in waves as the marketplace becomes slowly exhausted causing real estate prices to plateau for the forthcoming year. As demand continues to skyrocket causing prices to keep increasing, in addition to the expectancy of rising interest rates, the result will be one where buyers will look elsewhere to satisfy their needs.

Simon Reibelt from Oasis Home Loans Northern Beaches said that the natural slowing of growth in the marketplace would eventuate due to tightening of government policies and low development approvals for new dwellings.