Property news video from Kevin Turner | 7th October

Property news video from Kevin Turner | 7th October

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There’s a growing demand for variable interest rates with speculation that the Reserve Bank of Australia could make further cuts in the coming months. A growing number of borrowers are opting for variable home loans, according to new home loan approval figures from Mortgage Choice. It says variable home loans have now jumped to their highest level since February and account for 73 per cent of all home loans.

Fixed rate demand has slipped to an eight month low of 26 per cent… although demand for fixed rates has jumped in the state of Queensland… suggesting those in the sunny state are opting for certainty and stability. There’s also talk of the Aussie dollar being back at parity with the US dollar by Christmas… with economic concerns continuing over there.

In other news it would appear that term deposits are out of favour, with the annual growth rate the slowest in a decade. CommSec says yield-focused investors are now being forced to take on a little more risk to generate income and are now looking to other investments like housing, thanks to interest rates being super low. Meanwhile, Sydney continues to drive the property market.

The latest RP Data figures show Sydney house values have now increased by nine per cent over the past 12 months, and the auction clearance rates are above 81 per cent. The number of listings have declined by about 30 per cent and the median now sits at $650,000. Melbourne is also strong – with the auction clearance rates above 84 per cent and house prices rising by about six per cent over the past 12 months.

Perth prices have increased by about seven per cent over the past 12 months.. but Brisbane and Adelaide prices are still stagnant. Brisbane house prices have only increased by two per cent over the past 12 months and the auction clearance rate is just 46 per cent, although the number of properties listed for sale are falling, indicating this market could be turning a corner.

And there are some suggestions development applications could soon be made a little easier in Perth. 30 councils will be merged into 14 in Perth by mid-2015.

It’s hoped these councils might help reduce red tape and have a more streamlined and consistent approach to development applications. But there are also concerns rates will rise once the councils merge – it all comes down to where your investment property is and which council area it falls into. So good luck with that one.