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You’re probably aware that many lenders have recently announced an increase to their variable home and investor loan interest rates. These increases are due to occur this month (most will occur on 20/11/2015).

So why are they jacking up rates outside of the Reserve Bank? They say it’s to raise additional capital in response to new regulatory requirements.

Who has announced these changes? So far –we have:

ANZ 0.18%
WBC 0.20%
CBA 0.15%
NAB 0.17%
Macquarie 0.20%
St George 0.15%
ME bank 0.20%
Bankwest 0.18%
Choicelend 0.17%
Will other lenders follow their lead? It’s highly likely they will – and I predict it’s just a matter of time before the others make their announcement.

What should you do about it? Now isn’t the time for knee-jerk reactions. Whilst it’s frustrating (especially for investors who have already seen their rates increase outside of the Reserve Bank) – refinancing to another lender might not be the solution right now (particularly for investors). I’d wait for the dust to settle.

Having said that – we are still experiencing a period of historically low interest rates and banks are competing hard for the owner occupied dollar. In this space – there are low rates on offer and nice little perks such as cashback and frequent flyer points offers.

Feel free to get in touch if you’d like for me to explore your options.

How is the Canberra property market performing? Taken from the Herron Todd White Month in Review for May 2012

The Canberra residential market has continued to remain stable in the New Year with slightly extended marketing periods and steady auction clearances.

The bulk of supply that has come online in this period has been in the Gungahlin region. The lower end of this market, such as units within the price point of $300,000 to $400,000 and dwellings $380,000 to $450,000, have not seen the short-term growth that was once evident in the Canberra market.

South of the city, most of the new supply is being released in Googong and Molonglo with strong demand for properties in both regions.

Rental vacancies are still low, with the traditional new year influx occupying a significant number of properties in the early months of the year. This initial rush for rental properties traditionally quietens with a stable level of supply and demand in the rental market throughout the remainder of the year.

Good results are still occurring in well located properties, close to the city or major town centres. This performance is sustainable in the short to medium term, but possible changes in the Federal Government could have adverse impacts on an already savvy market.

The entire report for May 2012 which includes other property markets across Australia is available here -

How is the Canberra property market performing in early 2012? Taken from the Herron Todd White Month in Review for Febuary 2012

Towards the end of 2011 higher supply levels, and lower sale volumes saw the market begin to stabilise from the growth it enjoyed throughout 2010 and earlier. The market has entered 2012 in a steady position with an outlook of a swing to a buyers market. The increased supply levels of land, houses and units will give more options to potential buyers particularly in the Gungahlin region, which is mainly a mix of affordable and mid-range property.

Value growth during 2012 can be expected for quality properties in well regarded locations, namely inner suburbs close to Canberra’s CBD, while growth in outer areas may be limited. Vendors in 2012 can expect longer marketing periods or may need to lower their expectations.

The rental market in 2012 will also see an increase in supply and possible a rise in the vacancy rate. Large unit developments proposed or already completed, and on the market include Axis in Lyneham, Dockside and Bridge Point on the Kingston foreshore, Kingston Place in Kingston and numerous apartment complexes in Gunghalin.

In addition to the higher density unit developments completed and proposed, land releases continue to be scheduled. The district of Gunghalin is the main area of land development with further land releases occurring in the suburbs of Crace and Casey and the planned new suburbs of Moncriett and Kenny. South west of the city in the Molonglo area, land releases are planned and underway with new suburbs Wright, Coombs and new Weston currently being developed. Across the border land releases are planned along with other mixed use property for the new Googong Town Centre.

This years federal budget will be aiming to address the current deficit with potential to impact the government workforce. As a traditional driver behind the Canberra economy, there is a chance there could be less population growth from a smaller migrating workforce.

Apart from natural growth, positive population drivers include students starting the new university semester, professional and other private sector workers migrating and construction workers coming to service the strong demand in that sector.

So overall, 2012 is predicted to provide increased supply to the rental and sales markets, a possible rise in the rental vacancy rate and good purchasing opportunities.

The September median prices of $520,000 for houses and $415,000 for medium density property are expected to remain stable.

The entire report for Febuary 2012 which includes other property markets across Australia is available here -

How did Canberra go in 2011? Taken from the Herron Todd White Month in Review for December 2011

Compared to previous years there has been a major swing towards a buyers market. Sales listing figures have significantly increased from last year with Gungahlin, Belconnen, North and South Canberra providing the key areas of increased supply. Gungahlin, the newest region under development continues to provide the first homebuyer market with a mix of affordable and mid-range property.

The median price in Canberra remains steady at $520,000 for standard residential housing compared to $510,000 at the same time last year. Medium density property on the other hand has increased by 7% to $415,000 on the back of major new developments in the Inner South.

Vendors throughout Canberra have been forced to lower their price expectations given increased supply and softer consumer sentiment, a reflection of world financial markets and local political uncertainty.

As predicted, the rental market in 2011 has seen an increase in supply, due mainly to the completion of larger unit developments, in particular, ‘Oracle’ in Belconnen, ‘Verve’ in Bruce and ‘Kingston Place’ in Kingston. However, reported population growth of 1.8% has resulted in a continued tight vacancy rate and steady rents, providing investors with gross returns of 5% to 6%.

The entire report which includes other property markets across Australia is available here -

How is the Canberra market fairing at present? Taken from the Herron Todd White Month in Review for July 2011 - 21.07.2011

Overall, the Canberra property market has been somewhat insulated to the negative growth in dwelling prices currently experienced in most other capital cities around Australia. This insulation is predominately due to the city’s low unemployment and relatively higher disposable incomes.

Although Canberra has transitioned into a softened market, overall median prices have seen the best growth compared to other capital cities in the order of a seasonally adjusted 0.8% in the quarter ending April 2011, with a median dwelling price of $490,000. This is represented by house median price at $560,000 and unit median price at $420,000. (Source: RP Data-Rismark). Furthermore, prices are expected to remain flat over the next few years, however rental returns are expected to remain strong.

Considering these factors along with low vacancy rates in rentals, low affordability for first home purchasers and the threat of increasing interest rates, investors looking to invest a lazy half a million dollars would find better opportunities in units. Seeking units that produce higher than average rental yields is possible with particular attention in:
  • Bruce – modern and new one to three-3 bedroom range from $325,000 to $500,000-plus.
  • Braddon – modern and older one to two-2 bedroom range from $380,000 to $490,000-plus.
  • City – modern and older one--bedroom range from $220,000 to $500,000-plus.
  • Kingston – modern and older one to two-bedroom from $395,000 to $500,000-plus.
Units in these areas produce rental yields around 6% (above the Canberra average of 5.4%) and they tick all the boxes in terms of demand fundamentals where they are very popular due to their appeal and close proximity to:
  • Major town centres.
  • Universities.
  • Transport corridors.
  • Public transport.
  • Popular shopping, cafe and restaurant cores.
  • Business districts for employment.
  • The Australian Institute of Sport.
In terms of capital growth over the past 10 years, units have produced 10.1% of growth, which is 3.5% higher than the national average. Housing has produced a 10.2% growth over the same period indicating 2.4% higher growth than the national average (Source: RP Data-Rismark).

The entire report for July 2011 which includes other property markets across Australia is available here -

Australian Housing Market Overview March 2011
Tim Lawless, RP Data | 2011

Margaret Lomas talks about getting a better return from your rental property
Realestate Talkshow | 2010

Terry Ryder talks to Margaret Lomas on her Property Success show about real estate No Go Zones
Hotspotting | 2010

How to renovate your property for a profit
By Karina Barrymore From: News Limited Newspapers, August 02, 2010 11:30am
IF PROPERTY is Australia's "first love" then renovating it has to be a close second. [read more]

Reserve Bank waters down fears of real estate housing bubble in Australia
By Eoin Blackwell From: AAP June 15, 2010 6:27pm
THE Reserve Bank of Australia has downplayed concerns over a house price bubble in Australia, but painted a bleak picture for heavily indebted governments. RBA deputy governor Ric Battellino said today house prices in Australia, relative to income, were reasonable. [read more]

End of days for unfair home loan exit fees
By Steve Lewis From: Herald Sun June 19, 2010 12:00am
FAMILIES struggling to pay off their home loans will save hundreds of dollars in fees as part of a new push to drive bank competition. Greedy banks and other mortgage providers who rip off their customers will face court orders to repay thousands of dollars in home loan "exit" fees. [read more]

Kevin Turner shows viewers a handy website for getting free property valuations
Realestate Talk Show | August 08 2010

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