Value of Australian Real Estate Decreases

The Global Real Estate Trends reports that Australian house prices will significantly drop this year due to higher interest rates, reduction in government spending and measures for austerity.

Opportunities for Property Investors

The Australian property market is expected to remain strong this year even though challenges are expected. The reported status of the residential property market is exaggerated and modest growth will come especially in the major Australian cities.

House Prices to Slip in 2011

House Prices are set to slip in 2011, since May 2010, house prices have been flat. Prices decreased by 0.2 percent in November due to the increase of the official cash rate by the Reserve Bank of Australia. Also, all house prices in the major cities went down since May 2010 and the end is not yet in sight.

Slower House Price Growth Predicted

Property analysts predict that house prices will increase by about five percent this year due to the re-emergence of investors and first home buyers. Though residential property prices remained stagnant for the last quarter of 2010, the tight rental market brought prices back to normal. Rising house prices can be attributed to rising rental demand and worker wages.

House Sales Caused by Interest Rate Adjustments

It has been revealed that one in ten home buyers is feeling the pressure to sell their home due to the cash rate increases by the Reserve Bank of Australia, this though was stated even before the RBA officially increased the official cash rate to 4.75 percent during Melbourne Cup day.

RBA Cash Rate Remains Unchanged

After the board meeting of the Reserve Bank of Australia for December, the official cash rate is still at 4.75 percent. With the next RBA board meeting in February 2011, this means that the cash rate will stay put for at least two more months.

Opportunities in a Slowing Market

While property price growth is slowing down, the Australian Bureau of Statistics show that Victorian owner-occupied housing finance commitments went down by 2.1 percent in September and it is about 17 percent below the mark in September 2009.

Prices are flat but where are the Investors?

Australian housing investment activity is weakening despite two-year high levels early into 2010. The slowing investment activity in housing can be attributed to the rising interest rates and the wait-and-see approach of investors.

Increase of buying opportunities

The slowdown of the property market means that this is the best time for property buyers to score a great property with an increase of buying opportunities. Auction rates over the weekend had a 61 percent clearance rate, two percent better than the previous week’s rate.

Firstfolio Launches New Loan Home Loan Linked to RBA Cash Rate

The product, the Cash-Rate Linked Loan, is to be launched under Firstfolio’s New-Loan brand. The loan will have a starting interest rate of 7.25%; more than 50 basis points below the average standard variable rate offered by the big four, and is directly linked to movements in the RBA Cash Rate Target for three years from settlement.

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