Many lenders are taking a number of weeks (sometimes months) to approve loans at the moment. These delays have been caused mainly by significantly higher mortgage application volumes and the operational disruption from onshoring back-office services due to Covid lockdowns in the Philippines and India. As such, banks are prioritising applications for borrowers that have already purchased property and have a definitive settlement date to meet. Consequently, pre-approval applications are low priority and can take a long time to arrange. This blog discusses the pros and cons associated with buying a property without a loan pre-approval. What is a mortgage pre-approval? A pre-approval is conditional loan approval. Typically, the main condition is that the borrower is able to offer a suitable property as security for the proposed loan. For example, a bank may approve a loan for $800,000 subject to the borrower buying an acceptable property that is valued by the bank […]

The continuous growth of Australian housing market has put upwards pressure on the portion of profit-making resales, new research has found. The portion of profit-making resales in the first quarter of 2021 soared to 90.3 per cent nationally, up from 89.1 per cent in the previous quarter and the COVID-induced low of 86 per cent in the three months to June 2020, CoreLogic’s latest Pain and Gain report, based on approximately 98,000 resales, revealed. The proportion of national loss-making sales, on the other hand, declined from 10.9 per cent to just 9.7 per cent, with owner-occupiers said to have enjoyed a higher incidence of profitability than investors Namely, owner-occupiers recorded 94 per cent profit-making resales, whereas investors only bagged 88 per cent. According to CoreLogic’s head of research, Eliza Owen, the increase in the rate of profit-making sales has come off the back of remarkable growth in Australian dwelling values. Between the […]

With a Federal election looming and the first signs of pressure on interest rates appearing, the government may soon be locking horns with banks and the Reserve Bank of Australia to keep lending rates at current historic lows. A blowout in inflation forecasts is a major threat to the Federal Government’s budget outlook, especially if it prompts the RBA to raise interest rates much earlier than its current expectation of 2024 at the earliest. A subsequent rise in the Australian dollar would only exacerbate the situation by making the country’s exports pricier. The impact on confidence and household, business and national debt would pose risks for the unfolding economic recovery that could translate as lost votes in an election. Earlier this year it was expected that October or November were shaping as the most likely months for the first post-COVID-19 federal election, but more recent speculation is that Prime Minister […]

Record-low fixed rate loans could be on the outer, with a significant number of Australian banks hiking rates on four-year fixed terms over the past month. Research by RateCity.com.au showed 14 lenders had increased their four-year fixed rates, following the lead of the  Commonwealth Bank of Australia, which increased its rates for four-year fixed terms last month. RateCity research director Sally Tindall said the movement by the banks was in anticipation of a likely official cash rate increase in early 2024, if not before. “So far Australia’s second largest bank, Westpac, has kept its four-year fixed loan at a record low of 1.89 per cent, but it’s hard to see this rate sticking around for long,” Ms Tindall said.  “The idea of paying under 2 per cent interest until 2025 is an incredibly attractive proposition for many homeowners, but that doesn’t automatically make it a good idea. Take the time […]

The pace of capital gains across Australian housing markets has been close to record breaking, with the national growth rate in March the fastest since 1988. Such exuberant conditions have been driven by a multitude of factors including record low mortgage rates, a stunning surge in consumer confidence as the economic recovery beats expectations, a range of additional stimulus measures which have incentivised home buying and building, and persistently low advertised inventory levels which has created a renewed sense of FOMO amongst buyers. But… there are some early signs the exuberance in the housing market may be peaking. This isn’t to say housing values are about reverse; a more likely scenario is the housing market is moving through a peak rate of growth and the pace of capital gains will gradually taper over coming months. CoreLogic’s home value index is already indicating a slowdown in the pace of capital gain […]

In an active seller’s market, how can home owners make their properties shine and ultimately maximise profits? New research from Westpac found that seller confidence has been rebounding as buyer demand continues to rise across Australia, with one in three home owners intending to sell their property in the next five years. According to Westpac’s managing director of mortgages, Anthony Hughes, the big shift in property aspirations, which involve seeking bigger space and outdoor amenities, not only fuels buyer demand but also motivates “more Australians to think about selling their current property so they can purchase a new home to better meet their future needs”. With more sellers expected to come onto the market over the next few months, Westpac shared five top tips for preparing a home for sale: 1. Increase curb appeal A property appealing to the eye can help generate further interest. Simple measures like cleaning the front […]