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September 30, 2010

Fixed rates on the rise

Have mortgage holders missed the boat?


This week is the second successive week in which our lender panel’s average interest rate for three-year fixed-term home loans – the most popular with borrowers – has risen. This increase totals only 0.05 percentage points but still may indicate rock bottom has already passed.

These rises come after 14 consecutive weeks of falls totalling 0.46 percentage points.

In comparison, the basic and standard variable rate averages for our panel have budged only 0.02 of a percentage point either way in the past four months. Read more →

September 29, 2010

Populate or perish

Australia’s population growth is under scrutiny.


In the time it takes you to read this blog, Australia will have gained another person. That’s if you’re a quick reader and take one minute and 18 seconds from top to bottom.

If you’re slow, we may have another two people by the time you’ve finished.

According to figures released today by the Australian Bureau of Statistics (ABS), one person is born in Australia every one minute and 44 seconds; and we gain another resident through net migration every two minutes and 11 seconds. Read more →

September 24, 2010

How will Australia’s changing demographics change our property markets?

Australia’s property markets are driven by our demographics: who we are, how we live and where we want to live in the future. So how can investors use this information to their advantage?


Sophisticated property investors are students of demographics, so I found a recent Goldman Sachs report, A Study On Australian Housing: Uniquely Positioned Or A Bubble?, an interesting insight into the different forces driving our housing markets.

The report points out that Australia’s population is currently growing by around 2.1 per cent per annum, which is faster than any other developing nation. In fact we’re growing at a rate more reflective of a developing nation than of a wealthy developed country. Read more →

September 23, 2010

Getting and keeping good tradies

One thing I hear about time and time again in my line of work is just how hard people find it to source someone good to do the work on their property renovation.


So the first question is, what constitutes “good’’ in the construction

industry? For most of us, it’s:

– Being on time and phoning when you say you will.

– Meeting all building, health and safety regulations.

– Being prepared to stand by the quality of your work.

– Cleaning up after yourself. Read more →

September 22, 2010

House prices and our kids’ inheritance

A new study forecasts changing fortunes for our children.


I don’t know about you but I was highly irritated by that series of television ads which depicted older Australians, the so called Grey Nomads, living it up in retirement.

The ads were accompanied by the tag line that these people were “spending the kids’ inheritance”.

This irritated me on two levels: first, the inference that they were doing something illicit and second, the idea that this somehow made it all the more enjoyable. Read more →

September 21, 2010

Will our property market crash?

There have been some remarkable world events on the back of the global recession, among them unprecedented regulatory changes to major banking systems and presidential world firsts. But what does the future hold for the Australian property market?


If we take our eyes off other parts of the world and zoom in on Australia, we can see a country outshining its rivals in wealth, growth and resources. Even the recent election dramas did little to affect us on a national or global scale. Our concerns must look rather piddling to countries still facing dark clouded forecasts of laboured recovery after the 2008 recession. Yet it doesn’t stop ‘experts’ wagging their finger and cautioning ‘it’s only a matter of time’ before we suffer the same fate. Read more →

September 20, 2010

Looking for a loan? It’s all about the detail

Once upon a time employment and stability used to be the key to a successful loan application – things like your employment history, having minimal unsecured debt, the strong ability to service a loan, a clear savings history and a deposit.


These things are all still important, however we’re seeing a definite trend toward the requirement by lenders for more and more detailed information.

The basics

Naturally, you want to put your best foot forward and ensure your loan application is as strong as possible. This includes: Read more →

September 17, 2010

A slow lead up to Christmas predicted for our property markets

With more properties on the market, fewer buyers for these properties and the constant conveyer belt of mixed messages in the media, the traditionally strong spring selling season is likely to be subdued.


The latest RP Data Rismark Home Value Index confirms that Australia’s capital city property markets have slowed considerably, with predictions that prices will continue to show minimal change for the remainder of the year.

A very modest seasonally-adjusted rise of 0.4 per cent for median house prices was recorded in July, after a drop of one per cent in June – the first negative price movement for Australian capital city home values in 17 months. Read more →

September 16, 2010

The benefits of interest in advance

For those property investors who are interested in taking full advantage of their tax deductions and also want a strategy that makes it easier to budget in advance, here’s some food for thought.


‘Interest in advance’ mortgages allow borrowers to pay interest as a lump sum in advance, usually for 12 months, with the benefit of being able to claim this as a tax deduction. The biggest benefit for investors is that you can claim for the current financial year and not have to wait a full 12 months before claiming the deduction. This type of loan is aimed at property investors who want to maximise their tax benefits. It’s also particularly advantageous should you happen to earn less one financial year compared to others. Read more →

September 15, 2010

The mortgage dilemma

Fixed interest rates are trending downwards so is now a good time to lock in your home loan?


To fix or not to fix? That is the question occupying many home borrowers’ minds.

For those who were caught with high fixed rates as variable rates plummeted during the global financial crisis (GFC), the memory probably produces a resounding ‘no’ today.

The percentage of borrowers with fixed rates dropped from about 25 per cent in early 2008 – pre GFC – to only three per cent a year later. Read more →

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