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Just 1.4% of borrowers fixed in February 🔐📃
The share of borrowers who are fixing their home loans has shrunk to almost nothing.
Just 1.4% of all new home loans in February had fixed interest rates, while 98.6% had variable rates, according to the most recent data from the Australian Bureau of Statistics.
Back in August 2021, 46.0% of all new home loans were fixed, because it was possible to lock in record-low interest rates. But then banks started raising their fixed interest rates in anticipation of future rate rises from the Reserve Bank of Australia (RBA), which caused borrowers to shift to variable. By May 2022, when the RBA increased the cash rate for the first time, only 11.9% of borrowers chose to fix.
The reason very few borrowers are fixing now is because it's widely believed the RBA will start reducing the cash rate later this year, which means borrowers with variable rates may soon receive rate cuts.
Would you fix now? Let us know why or why not in the comments
#property #realestate #homeloans #realestateaccountants
Rental market squeeze shows no sign of ending 🤕👨👩👧👦
Just 1.0% of rental properties were vacant across Australia in March, the same as the month before, according to SQM Research.
The national vacancy rate has been at this ultra-low level for two years now – it was 1.2% in March 2022 and 1.1% in March 2023.
The rental market is regarded as being in balance when vacancy rates are in the 2-3% range: anything above that favours tenants, while anything below that favours property investors.
During the kind of landlords' market we're experiencing now, rents tend to grow strongly because tenants have limited options, which forces them to pay higher prices to secure accommodation.
SQM Research managing director Louis Christopher said that while vacancy rates were likely to rise a little in the short-term, as tends to happen during the cooler months, “we expect overall tight vacancy rates to be with us for 2024, driven by a fall in dwelling completions relative to growing demand.”
#property #realestate #investing #realestateaccountants
Govt unveils housing supply plan 🏛️📝
The federal government has released draft legislation to introduce tax incentives in the build‑to‑rent sector, which are designed to stimulate investment and construction.
The tax incentives apply to build‑to‑rent projects, consisting of 50 or more apartments or dwellings, made available for rent to the general public. To qualify, developers must retain the dwellings under single ownership for at least 15 years and ensure at least 10% of dwellings in a project are made available as affordable tenancies.
“Attracting more investment into housing will support our ambitious national effort to build 1.2 million new, well‑located homes over five years from 1 July 2024,” Treasurer Jim Chalmers said.
"Industry estimates that changes to promote build‑to‑rent investment will make an important contribution to achieving this national target and could see an extra 150,000 rental homes built over the next decade."
Unfortunately, housing construction is actually trending in the opposite direction, according to new data from the Australian Bureau of Statistics. Construction started on 163,836 homes in 2023, compared to 182,807 the year before – a reduction of 10.4% (see graph).
#property #realestate #taxation #realestateaccountants
Days on market trending up 📈🏘️
There’s been an increase in the time taken for homes to sell over the past six months, suggesting some heat may have been taken out of the property market in that time.
Between the September 2023 and March 2024 quarters, the median time vendors across Australia needed to sell their home rose from 30 to 36 days, according to CoreLogic.
That included an increase from 26 to 29 days in the combined capitals and 43 to 50 days in the combined regions (see graph).
When days on market are rising, that means it’s becoming harder for vendors to sell their home, which means there’s less pressure on buyers to bid up prices.
Or are vendor expectations too high for their selling prices?
Let us know what you think in the comments
#property #realestate #investing #realestateaccountants
Property investors earning higher yields 👍😀
There's been a significant increase in gross rental yields over the past year, according to Domain, delivering a larger return on investment for property investors.
Across the combined capitals, the median house yield rose from 3.55% in the March 2023 quarter to 3.74% in the March 2024 quarter. That means the annual rental income delivered by a $1 million house increased from $35,500 to $37,400.
In the combined regions, the median house yield climbed from 4.52% to 4.62%.
Yields increase when rents rise more rapidly than property prices.
#property #realestate #investing #realestateaccountants
