Interest rates are likely to stay on hold for the remainder of 2011, although the possibility of an end of year hike remains as the benefits of the resources boom start to kick in. The job market remains strong with the unemployment rate in Sydney dropping from 5 per cent in June to 4.6 per cent in July, the lowest rate recorded for this year.

New South Wales incomes are rising with a private sector annual wage growth of 3.7 per cent to June 2011.

Housing is still in short supply in Sydney as revealed by a tight rental market with very high levels of competition for properties. With low levels of new dwellings being built, relief to the shortage in the near future isn’t likely.

There are early indications of an increase in buyer activity, with weekend auction clearance rates beginning to reach the 60 per cent mark in recent weeks after having been stable around the mid-50s over the winter.

Over the next few weeks the number of properties up for auction is also increasing as expected over the active spring selling season.

Although the numbers are still lower than this time of last year, reflecting the quieter present housing market environment, it is expected that as spring progresses the number of properties up for auction in Sydney each weekend will approach those recorded last year as seller confidence in the market rises.

Experts also predict an rise in investor activity in Sydney property as, with dropping deposit rates, stock market volatility and a stable housing market, property is becoming an increasingly tempting investment option.

If you are considering entering the property market, contact New Loan and one of our consultants will be happy to advise you.

The July 1 ban on charging of exit fees on new mortgages permitted mortgage holders to change to a new loan without incurring early exit fees. MFAA urge home loan borrowers to seek credit advice from mortgage brokers as mortgage lenders are bombarding the public with marketing.

The MFAA Home Finance Index for May showed that whilst 30.9 per cent of the respondents made a move to refinance their mortgages in the last 12 months, only half claimed to have benefited from their refinancing.

With a financial commitment as big as a mortgage, switching to a better rate may not be as important as the terms of the loan.

Experts say that with a ban on exit fees, lenders see all mortgage holders as potential switchers, and as a result borrowers are being swamped by extensive promotional advertising. They advise consulting a mortgage broker for a second opinion before switching.

It you have any questions about your home loan, contact New Loan and one of our consultants will be happy to help you.

But lenders today are looking for more than that, placing the complete financial background of an hopeful home buyer under scrutiny to establish whether they’re going to get their money back.

Personal loans, credit cards, rental history, HECS/HELP debts: all of these payments are looked over extensively by lenders before they approve a loan.

The number of lenders requiring only a 3 per cent deposit for a home loan has doubled to 5 per cent since January.

However, lenders are still eager to stay away from the kind of high-risk loans that precipitated the financial crisis and comply with new responsible practices in lending.

Experts advise that aspiring homeowners should not take up banks’ offers to increase credit card limits, as they may assume that if you have a $30,000 limit you will spend that after you have taken out a loan.

A borrower’s credit score, obtained from credit agency Veda Advantage, is one of the major factors determining if a home loan will be offered.

Banks also consider more remote postcodes and certain areas as a higher risk, amongst other factors such as a pattern of bills that have not been paid on time, an applicant’s assets and liabilities and whether or not they have been in steady jobs for more than six months.

Experts suggest that potential borrowers should obtain a copy of their credit report from Veda Advantage to ensure they have no potential skeletons in their financial closets. Knowing about any past misdemeanors will allow borrowers to overcome any issues that may arise in the application process.

Most importantly, make sure bills are paid on time and set up direct debits wherever possible to keep your credit file as clean as possible.

If you are thinking about buying a home, contact New Loan for a great deal.

Right now, the market is balanced between positive and negative forces (Australia’s strong fundamentals vs. low consumer confidence). Until the uncertainty clears many investors and home buyers are likely to do nothing and wait to see how the situation resolves itself. Many are worried about making a wrong decision, either purchasing the wrong property or committing to one that might get devalued.

Although the probability that the Australian property market will crash is small, many Aussies are playing it safe and avoiding getting involved in the property market.

Is this a sign of a new era for Australia’s property market?

The last couple of years have seen the prices of properties rise by over 20 per cent a year. Many Australians stopped seeing their home as a shelter and long-term investment, and instead as a get rich quick scheme. This was a result of increasing property values and relatively easy credit, with banks lending money at low interest rates and high loan to value ratios. However, much of this has changed.

Australia has entered an era where many people are saving instead of consuming. In sharp contrast to a few years ago where the trend was to spend more than one was earning by borrowing increasing amounts, most Australians are now saving between 10 and 12 per cent of their earnings.

This renewed thrift is a positive thing. Higher savings within households, lower credit card debt and early mortgage payment are all signs of strength that will protect Australians if further problems arise in the economy.

If you are considering entering the property market contact New Loan to help you with a home loan that is best suited to you.

June marked the sixth consecutive month in which there was a correction in the cost of property.

Low levels of consumer confidence fueled by speculations on interest rates and uncertainty regarding global economics are dampening market conditions.

The average selling time for a property has dropped to 52 days, down from 58 days March. This could be a sign that more home loan customers are out there searching for a new house.

Over the June quarter the house values in Western Australia fell by 2.5 per cent and in Queensland by 2.7 per cent, whilst the cost of a house in Melbourne has fallen by 2.1 per cent in the last year.

If you are looking for a home loan, contact New Loan and one of our consultants will be happy to help you find a great deal.

There has been a decline of 0.1 per cent for the June quarter to a level 1.9 per cent lower than the same time last year.

Approvals to construct houses dropped by 3.8 per cent and units by 3.1 per cent, whilst the private sector new house segment fell by 3.2 per cent in July, a 27 month low.

For many these worrying figures on building approvals, or the lack thereof, add weight to the widely held view that the economy has effectively ground to a halt.

Stagnation can also be seen in the NSW construction sector.

Property analysts have predicted favourable returns for 2011 to June 30; however, commentary on the six to 12 months to come will be less positive than a year ago.

Those who have a larger office portfolio will most likely be more fortunate than those exposed to retail and housing markets.

With evidence that economic conditions had softened in the second quarter of the year, the positive impact from activity in the resources sector has yet to be felt in other parts of the economy.

Residential market conversion rates have slowed and experts forecast that the spring selling period from September to November will be a critical period for residential developers.

If you are considering at investing in property or simply looking for a new loan contact us and one of our home loan consultants will be able to help you find a great loan today.

Migration charts suggest that young people move into the inner-city at 18-24 and relocate to suburban areas in their 30s when they start to raise a family.

Australian inner cities mainly consist of small apartments with one to two bedrooms, which are far more suited to single adults than families.

There are some exceptions where a high density of families can be found; however these are mainly in suburban areas with a lot several apartments that cater to people born overseas.

A gain of young adults, loss of families and lower levels of population movement for those over 55 can be seen in inner-city local government areas such as Yarra in Melbourne, Subiaco in Perth, Waverley in Sydney.

Usually inner cities have high-density accommodation, while most families prefer separate houses. It may seem rational that after children leave home parents would want to downsize; however that may not always be an option.

Such factors as the high cost of relocating, the rising number of young adults moving back to their parents’ houses and a lack of local downsizing choices where a connection can be maintained with the local community, can all affect ability and motivation to downsize.

In general, there is a high tendency to reside in medium and high-density dwellings among those in their 20s which declines in their 30s and 40s but increases again in their 50s.

If you are considering entering the property market contact New Loan to help you with a home loan that is best suited to you.

First of all, it’s very simple. All it requires is making more repayments more often and ensuring you have the most suitable mortgage for your situation.

Although the average home loan is now approximately $300,000, you may only need to find an extra $200-$500 a month to exceed your mortgage payments. This might sound like a lot but it can be easier than you think to save on a monthly basis.

1. Know your budget

It’s surprisingly common to be unaware of exactly where your income goes. The best idea is to get to know your incomings and outgoings, and identify where savings can be made. You may be astounded to learn just how much you’re spending on eating out, takeaway or coffees each month. Even just an extra $20 per fortnight towards your mortgage can make a significant difference to the balance.

You should also use your tax returns. For instance, depositing a $2000 tax return as a lump sum into an average $300,000 mortgage can potentially take eight months off a 30-year-term, saving you in the long run almost $12,000. If you do this each year, the years will drop off your loan.

2. Work out your budget

There are lots of free mortgage payment calculators online that will tell you exactly how much money you could save by increasing repayments.

The monthly repayments over a 25 year term on a $300,000 mortgage at 7.25 per cent are approximately $2,168. But if you could pay off the loan ten years earlier by raising your repayments by $575 every month, in the long run you would save $158,277 in interest.

Although it sounds like a lot extra, finding the money could be a simple matter of scrutinizing your household budget and asking yourself before every expenditure how much you really need it.

3. Pay your loans fortnightly rather than monthly

On a $300,000 mortgage you could cut four years and six months from your loan and save $83,823 in interest simply by switching to fortnightly repayments. There are 26 fortnightly repayments instead of 12 monthly repayments each year, reducing the loan faster.

In Melbourne, the cost of renting a residential property dropped over the June quarter. This could indicate that more people are looking to enter the home buyer market, in addition to an increase in apartment availability and less competition amongst prospective tenants.

There has been a decline of 1.4 per cent in the median weekly asking rents for houses over the quarter to $360, while the median weekly asking rents for units remained steady at about $350.

The recent increase in the number of first home buyers – a group typically closely linked to movement in the rental market – could be a contributing factor to this overall decline. In Victoria the number of first home buyers rose by 16.4 per cent in May to 2276, the highest recorded monthly number so far in 2011.

This is contradictory to expectations earlier in the year when a decline in the number of first-home buyers was thought to have increased rental costs.
Another contributing factor could also be a rise in new apartment stock available for rent, along with a decline in competition among potential tenants at least partially caused by less international students coming to Melbourne to study.

Rental prices in Melbourne remain significantly lower than those in Sydney as a consequence of pressures on rents – 36 per cent lower for houses and 29 per cent for units.

If the current trends regarding first-home buyers and apartment stock availability continue and the interest rates remain steady, meaning minimal pressure on the landlords to raise rents, Melbourne’s rental market is likely to stay favourable to potential tenants in the short term.

If you are considering entering the property market contact New Loan to help you with a home loan that is best suited to you.

Banks can capitalise on marketing strategies to sway the undecided on investing with them. Since there is an intention to diversify their investment portfolio, they are not sure where to place their money and banks can help them improve their stock by making sound investments with their funds.

If you are looking at investing in property or simply looking for a new loan contact us and one of our home loan consultants will be able to help you find a great loan today