Sonam Capital’s Post

𝟮𝟬 𝗬𝗲𝗮𝗿𝘀 𝗼𝗳 𝗛𝗼𝘂𝘀𝗲 𝗣𝗿𝗶𝗰𝗲𝘀 Which capital city has experienced the strongest growth in house prices over the past 20 years? The answer is Adelaide, based on Australian Bureau of Statistics median house price data covering the two decades to June 2024. * Adelaide = 209% growth over 20 years * Hobart = 193% * Brisbane = 190% * Perth = 186% * Sydney = 181% * Melbourne = 165% * Canberra = 160% * Darwin = 136% As the data shows, the average buyer who purchased a house in any capital city 20 years ago has enjoyed strong capital growth. That’s why property investing is a popular wealth-building strategy for so many Australians. #property #realestate #homeloans

𝗔𝘂𝘀𝘁𝗿𝗮𝗹𝗶𝗮 𝗻𝗼𝘁 𝗕𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗲𝗻𝗼𝘂𝗴𝗵 𝗛𝗼𝗺𝗲: 𝗠𝗶𝗻𝗶𝘀𝘁𝗲𝗿 Federal housing minister Clare O’Neil has delivered strong words about housing supply and affordability. “Australia is in the middle of a housing crisis which has been decades in the making,” she said in a speech to the AFR Property Summit. “This chart shows us that incomes and house prices were diverging in the 1980s, and that this problem accelerated acutely from the late 1990s. At the turn of the century, the median household price was about 4 times average incomes. Today it is nearly 8 times. “Why have prices gone up in this way? Because for a long, long time in our country, we have not been building enough homes.” Minister Clare O’Neil said Australia has less housing per person than comparable countries, such as Canada, the UK and France. “Fewer homes means less affordable housing. Because the same number of buyers and renters are spread across fewer homes. It sounds trite – but what happens when we build more homes? Housing becomes more affordable.” The federal government is aiming to facilitate the building of 1.2 million homes in the five years from July 2024, but many experts believe it will struggle to achieve its target. #property #realestate #homeloans

𝗛𝗼𝘂𝘀𝗲𝗵𝗼𝗹𝗱 𝗦𝗮𝘃𝗶𝗻𝗴𝘀 𝘄𝗲𝗹𝗹 𝗯𝗲𝗹𝗼𝘄 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝗔𝘃𝗲𝗿𝗮𝗴𝗲 In a sign of how tight a lot of people’s finances are right now, the average household saved just 0.6% of their income during the June quarter, according to the latest data from the Australian Bureau of Statistics. Back in the pandemic year of 2020, when people were locked inside their homes and interest rates were at record-low levels, households cut back on their spending, with the result that the household saving ratio reached a record-high 24.1%. However, since then, as the graph shows, saving has been trending down, in large part due to higher rates and cost-of-living pressures. Since the year 2000, the average household saving ratio has been 5.0%, so the current level of saving is below the long-term average. That said, during that time, there have been 14 quarters when the household saving rate has been negative, so people are doing a better job of saving than in some periods. With inflation falling and – potentially – a rate cut on the horizon, it wouldn’t be surprising if saving increased soon. #economy #homeloans #money

𝗕𝗿𝗼𝗸𝗲𝗿𝘀 𝗢𝗿𝗶𝗴𝗶𝗻𝗮𝘁𝗶𝗻𝗴 𝗧𝗵𝗿𝗲𝗲-𝗤𝘂𝗮𝗿𝘁𝗲𝗿𝘀 𝗼𝗳 𝗡𝗲𝘄 𝗛𝗼𝗺𝗲 𝗟𝗼𝗮𝗻𝘀 Mortgage broker market share has increased significantly over the past four years. Brokers originated 73.7% of all new home loans in the June 2024 quarter, according to data from Comparator, which was commissioned by the Mortgage & Finance Association of Australia. That compares to 57.0% in June 2020. A large majority of consumers now realise that brokers provide better service than banks. If you make a home loan enquiry with your bank, they’ll tell you only about their own products. But if you make the same enquiry with a broker, they’ll compare loans from a diverse range of lenders, thereby increasing your chances of getting a better deal. #property #realestate #homeloans

𝗥𝗲𝗻𝘁𝘀 𝗥𝗲𝗺𝗮𝗶𝗻 𝗨𝗻𝗰𝗵𝗮𝗻𝗴𝗲𝗱 𝗳𝗼𝗿 𝗦𝗲𝗰𝗼𝗻𝗱 𝗦𝘁𝗿𝗮𝗶𝗴𝗵𝘁 𝗠𝗼𝗻𝘁𝗵 At first glance, rents appear to be booming, given that many markets have experienced strong rental increases over the past year, as the graphs show. However, more recent data suggests the tide appears to be turning. August was the second straight month in which the national median rent was unchanged, according to CoreLogic. So rents didn't fall, but nor did they rise. “While monthly results are subject to seasonality, the annual growth trend also shows a consistent slowdown in rent rises. Nationally, rent values were up 7.2% in the year to August, which is the lowest annual growth rate since May 2021. Annual rent growth is now slowing in every capital city market, except for Hobart, which is coming off a dip in rent values through 2023.” CoreLogic said the rental slowdown appeared to be the result of: * Lower demand – net overseas migration has decreased * Higher supply – average household size has increased, thereby freeing up rental space #property #realestate #homeloans

𝗙𝗶𝗿𝘀𝘁 𝗛𝗼𝗺𝗲 𝗕𝘂𝘆𝗲𝗿 𝗦𝗰𝗵𝗲𝗺𝗲 𝗗𝗲𝗹𝗶𝘃𝗲𝗿𝗶𝗻𝗴 𝗥𝗲𝘀𝘂𝗹𝘁𝘀 About one in three first home buyers who purchased a property in the 2023-24 financial year used the federal government's Home Guarantee Scheme (HGS), according to a new report from Housing Australia. The HGS lets eligible first home buyers – and previous buyers who haven’t owned a home for at least 10 years – enter the market with just a 5% deposit without having to pay lender's mortgage insurance. You must be an owner-occupier to participate. You can buy as an individual (if your annual income is under $125,000) or a couple (if your combined income is under $200,000). Other criteria also apply. For participants who lived in capital cities, the median income was $85,000 for single borrowers and $134,000 for joint borrowers, while their median purchase price was $482,000 and $624,000, respectively. For regional participants, the median income was $78,000 for singles and $126,000 for couples, while the median purchase price was $390,000 for singles and $520,000 for couples. #property #realestate #homeloans

𝗔𝗯𝗼𝘂𝘁 𝟱% 𝗼𝗳 𝗕𝗼𝗿𝗿𝗼𝘄𝗲𝗿𝘀 𝗙𝗮𝗰𝗶𝗻𝗴 𝗖𝗮𝘀𝗵 𝗳𝗹𝗼𝘄 𝗦𝗵𝗼𝗿𝘁𝗳𝗮𝗹𝗹 Reserve Bank of Australia (RBA) governor Michele Bullock has described higher interest rates as a necessary evil, while acknowledging that it has left some borrowers in a vulnerable position. Governor Bullock said higher rates were necessary to slow the economy and thereby defeat inflation, because “inflation causes hardship ... particularly for the more vulnerable in our community.” However, she also said those with mortgages were “feeling the squeeze”. “For owner-occupiers with variable-rate loans (which is a subset of all borrowers), we estimate that around 5% are in a particularly challenging situation, where the combined total of their essential spending and scheduled mortgage repayments is more than their income – that is, they have a cash flow shortfall (see graph),” she said. “Although this group is fairly small overall, those in it have had to make quite painful adjustments to avoid falling behind on their mortgage repayments. This includes things like cutting back on their spending to the more essential items, trading down to lower quality goods and services, dipping into their savings or working extra hours.” #property #realestate #homeloans

𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝗕𝗼𝗿𝗿𝗼𝘄𝗶𝗻𝗴 𝘂𝗽 𝟰𝟵.𝟮% 𝘀𝗶𝗻𝗰𝗲 𝗝𝗮𝗻𝘂𝗮𝗿𝘆 𝟮𝟬𝟮𝟯 Property investor borrowing is close to record levels after increasing for the 14th time in 18 months. After investors signed up for a record $11.762 billion of home loans in January 2022, volumes steadily declined, bottoming out at $7.849 billion in January 2023. Since then, investor borrowing has trended up, reaching $11.708 billion in July 2024, according to the latest data from the Australian Bureau of Statistics. That's an increase of 49.2%. During the same period, owner-occupier borrowing has increased 22.5%. Why are so many investors entering the market? Probably due to a combination of rising prices, rising rents and an expectation that interest rates might fall in early 2025. #property #realestate #homeloans

𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗟𝗶𝘀𝘁𝗶𝗻𝗴𝘀 𝗥𝗶𝘀𝗲 𝟳.𝟵% Large numbers of new listings have come onto the market, which will have implications for both buyers and sellers during spring. Across Australia, a total of 249,523 properties were listed for sale in August, according to SQM Research. That was 7.9% higher than the month before and 11.1% higher than the year before. That means buyers will have more choice and less competition, which will give them more time to conduct due diligence and provide them with more negotiating power. Conversely, vendors will have to work harder to attract buyers to open homes, which will incentivise them to invest more in marketing and move towards buyers on price. #property #realestate #homeloans