Author Archives: Terry Hansen

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Tips for buying in a booming market

Property prices have surged in the last few months as homebuyers line up to get their foot on the property ladder.

A rising market can be challenging for those looking to break in, but there are buying strategies you can use to help you keep pace even as prices go up.

Do your research 

First of all, try not to be alarmed about news of escalating prices because there are very different things happening from region to region across the country.

Your goal should be to really understand the market you plan to buy in and what property prices are doing there. Have they gone up significantly in recent months? Are some property types performing better than others (for example houses over units)?

Check the recently sold prices of properties in the area to get a rough estimate of what properties are selling for and keep this in mind when trying to gauge the price of a property you’re interested in. It may be that prices aren’t changing as drastically as you feared.

Change your target

If prices are growing too fast to keep up with though then you may need to change your goal post.

This might mean that you need to either increase your budget, or find property alternatives that are going to be more affordable.

Cheaper property options might be able to be found by looking at different suburbs, finding something smaller or going for a property that needs some renovations.

Move fast

Once you find a property that ticks all of the boxes then don’t waste time trying to lock it in. There’s a lot of competition in the market right now so you might find that a property will sell after it’s first open home (or maybe even before it!)

That means that you need to make a move on a property as soon as you hear about it. Make sure you’re on the mailing list of local agents so they can alert you as soon as a property hits the market and make the effort to head to open homes.

Then be quick to put in an offer otherwise somebody else might beat you to it. Having your finances sorted and ready to go before going on the property hunt will make it easier for you to be able to make an offer you’re comfortable with.

Keep trying

If you miss out on a property you’ve made an offer on then try not to be too disheartened. It can be frustrating but the property that is meant for you will come along eventually so keep looking and eventually you’ll find a home you can call your own.

If you would like to chat about the properties currently for sale in outer western Sydney then contact Professionals Outer Western Sydney today.

shop

Are you keeping it local?

We’ve all been affected in some way or another since the COVID pandemic began, but many small business owners have been doing it particularly hard as they struggle with ever-changing restrictions and last-minute lockdowns.

But we can all do our little bit to keep local businesses going strong, and keep our local communities thriving, by doing our part to support local when we can.

Often people don’t realise all of the wonderful goods and services that are available on their own doorstep, simply because they are used to purchasing from major department stores, or visiting shops or restaurants found in different neighbourhoods.

But there’s a lot on offer close by and you might be surprised by what you can find just around the corner from where you live.

If you want to support local, here are some tips from St Marys Town Centre:

  • Purchase a birthday present from a local shop.
  • Join a local gym.
  • Try out the menu from local cafes and restaurants.
  • Check out local hardware stores first when doing home renovations.
  • Choose a local mechanic for servicing and repair.

There are plenty more ways to support local, so the next time you need to make a purchase take a look at what you can find nearby because there’s plenty on offer.

And, when you find a local business you like then don’t forget to shout it from the rooftops by posting good reviews online so other people can find them too.

Local businesses are the heart and soul of our community. They help provide jobs, growth and vibrancy to the areas they are in. Plus, many give back in the form of sponsoring local sports teams or community events.

That means that supporting local businesses is helping support the place you live too!

So, why not get out there, sit down to a coffee at a local cafe and find out what else is a short walk or drive away.

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CBA predicts property market will boom over next 2 years

If you’ve been lining up for open homes on weekends then it probably won’t surprise you to learn that Australia is on the “cusp of a housing boom”.

That’s according to Commonwealth Bank (CBA), who has forecast that property prices will rise by 14% over the next two years, with an 8% increase in 2021 followed by a 6% increase in 2022.

Houses will see the biggest jump in prices, with a rise of 16%, compared to units where a smaller 9% increase has been tipped.

Property prices in Sydney and Melbourne are expected to grow by at least 12% over the next two years. This will mean a $160,000 lift in Sydney’s median property price, bringing it to a new median of around $1.2million.

Melbourne’s average property price is predicted to jump by about $110,000 to $920,000.

However, it’s the smaller capitals that are expected to see bigger percentage price rises over the next two years.

Darwin is expected to see the biggest jump (18%), followed by Perth (17.7%) and Brisbane (16.6%).

A 15.5% increase is predicted for Canberra, a 15% increase in Hobart and an 14.5% increase in Adelaide.

CBA’s property forecasts are based on the assumption that there will be no change in the official cash rate for the next two years, with the RBA having indicated that this is unlikely.

What could slow down growth?

While most indicators are pointing to sustained growth for the property market, there are still risks that may put a halt to growing prices.

According to CBA’s head of Australian economics, Gareth Aird, the main risks are a significant outbreak of COVID, large-scale lockdowns, interest rate hikes, or a reintroduction of macro-prudential measures to slow the rate of lending.

“At this stage we consider the reintroduction of macro-prudential measures to be a relatively low risk in 2021,” Mr Aird said.

“However, if new lending accelerated too quickly, particularly to investors, there is a risk that the Australian Prudential Regulatory Authority (APRA) could reintroduce macro-prudential measures to slow things as they did in 2017.”

But while there are risks that could put a dampener on price growth, there’s just as much chance that prices will rise higher than predicted too, particularly as property fever hits the nation.

“History shows that prices can rise very quickly when the housing market is on a roll. Indeed it may turn out to be the case that the growth profile for price outcomes over the next two years ends up more front loaded than our current projections,” Mr Aird said.

property prices

Chasing the lowest interest rate

The official cash rate was left unchanged when the Reserve Bank met this month, however that doesn’t mean that home loan rates haven’t been dropping. 

A new low rate of just 1.69 per cent has now hit the market from Greater Bank. The lender cut 0.2 per cent off its one-year fixed rate for owner occupiers paying principal and interest, making for one of the lowest rates currently on the market. 

There are some great deals available on fixed rates at present. If you’re simply looking to get the best rate possible then they are definitely worth looking at in the current environment. 

Before you fix

While there are plenty of great fixed rates on offer right now, it is worth keeping in mind that having a fixed loan will lock you into a particular lender or product for your fixed period. This means you won’t be able to move over to another deal if you find something better later on unless you’re willing to spend the time and money trying to break out of the loan, which probably wouldn’t make it worth it.

High exit fees on fixed loans may also make it difficult to sell, refinance or take out your equity if you were looking to do something like renovate your home. 

Fixed home loans also generally don’t allow extra payments to be made, if you were hoping to pay down your loan quickly while rates are low. 

However, many lenders offer the option of splitting your home loan so that it’s only partially fixed. This may be a good option if you want a little more flexibility and the ability to make extra repayments or access to an offset account.

Do your research

Fixed home loans can be a great option, particularly with some very competitive rates right now, but you really need to do your research before simply going for the lowest rate you can find. 

Consider your personal circumstances and what features are important to you in a home loan. Do you need flexibility, or are you planning to sell or renovate in the future?

These decisions may impact what will work best for you so you really need to shop around and compare the different types of loans available on the market. 

Chat to your current lender

Keep in mind that interest rates aren’t expected to rise for at least the next 3 years. That means that you can feel pretty secure in the fact that your interest rate is unlikely to rise anytime soon if you’re currently on a variable rate. 

However even if you want to stick with a variable rate you should still try to get a better deal. 

Ask your lender if they can improve your current rate. You may like to bring up lower rates you have found to try and sway your lender to improve their offering. 

If they won’t budge, or you’re not happy with the amount they are willing to drop to, then it may be worth considering moving lenders to get a better deal.

property

NAB predicts solid house price growth in 2021

Australia’s obsession with property looks set to continue in 2021, with one of the country’s major banks predicting that house prices could rise by as much as 8 per cent this year.

NAB’s Australian Residential Property Survey for the final quarter of 2020 has predicted that house prices in capital cities could rise by an average of about 8 per cent in 2021, followed by a further 6 per cent rise in 2022. 

The smaller capitals look set to outpace Sydney and Melbourne, which will see more impacts from slowing population growth, however these cities are still expected to see a strong lift in prices throughout the year. 

House prices in Sydney are forecast to rise by 7.3 per cent, while Melbourne house prices are set to see a lift of about 8.4 per cent. 

The expected lift in house prices comes despite the significant economic challenges the country is facing, such as uncertainty in the pace of population growth and a weaker labour market. 

Market sentiment has improved drastically since the pandemic hit last year. The NAB Residential Property Index fell to a survey low -33 points in Q2 2020, however it rebounded to reach a survey high +45 points in Q4.

NAB has attributed the improvement in market sentiment to solid house price growth

Looking ahead, it’s expected that low mortgage rates will continue to support prices, which will no doubt keep market sentiment strong. The unemployment rate should also continue to recover, again providing a boost to market confidence.  

NAB forecasts that prices will continue to rise over the next 2 years before normalising closer to income growth. 

They have also predicted that the structural shifts underway around working from home will see price growth in regional areas remain robust.

 

Source: 

https://business.nab.com.au/wp-content/uploads/2021/02/NAB-Residential-Property-Survey-Q4-2020.pdf

architecture

Which Sydney regions are seeing the strongest house price growth?

Home buying trends have undoubtedly shifted in the wake of COVID, and it seems that in Sydney people are moving away from the inner-city to enjoy the outer burbs. 

According to recent CoreLogic data, the Central Coast and outer suburbs, including the Blue Mountains and Blacktown, were the fastest growing housing markets in Sydney over the year to February. 

In these areas homebuyers are paying on average about $40,000-$60,000 more for properties than what buyers were paying a year ago.

The Central Coast saw home prices jump 9.3 per cent, taking its median value from about $642,00 in February last year to about $682,000 currently.

Home prices have also soared in the Blue Mountains, Blacktown and outer west suburbs where home prices have jumped about 6 per cent over the last year. This was about 3 times higher than the average growth of Greater Sydney, which was 2 per cent.

In these outer west regions the price increases equate to about an extra $40,000 to purchase a home.

Why are prices soaring?

A number of factors have contributed to a growing desire to purchase a property at the coast and outer west suburbs. 

In an article on realestate.com.au, property experts attributed the price movements to the shift in remote working arrangements since the pandemic, which has afforded families the option of moving further away from the Sydney CBD.

Buyers have also placed greater importance on finding homes with space and backyards, as a result of spending time in lockdowns.

CoreLogic head of research Eliza Owen highlighted that we are seeing different types of buyers leading the current boom, as opposed to what we’ve seen previously.

“The last housing boom from 2013-2017 was led primarily by investors purchasing properties within inner city areas, whereas first homebuyers and upsizers in outer suburbs were leading the recent charge”, Ms Owen said.

CoreLogic research director Tim Lawless also noted that there has been a transition of buyer activity away from metro areas and towards outer suburbs and regional markets. 

“Better housing affordability, an opportunity for a lifestyle upgrade and lower density housing options … might be contributing to this trend, along with the new found popularity of remote working arrangements,” he said.

All of these factors are making for a great time to be a seller in the outer west. There’s strong demand for property right now and a lot of properties are being snatched up quickly and for higher prices than expected. 

If you’re looking to find out more about selling in the current market then don’t hesitate to contact the Professionals Outer Western Sydney team on 02 9673 4422.

Sources: 

https://www.corelogic.com.au

https://www.realestate.com.au/news/sydney-real-estate-central-coast-outer-west-record-biggest-jump-in-home-prices

flipping property

Unused First Home Loan Deposit Scheme spots become available

More first home buyers will have the opportunity to jump onto the property market with a deposit of as little as 5 per cent, with the government reissuing about 1800 unused spots from the first tranche of the First Home Loan Deposit Scheme.

Housing minister Michael Sukkar announced that the unused loan guarantees would become available because those who originally took them up have since been unable to complete their first home purchase.

“This represents a great opportunity for around 1800 buyers to now enter the property market sooner”, Mr Sukkar said.

The first tranche of the scheme offered first home buyers a loan guarantee with a deposit of as little as 5% for the purchase of an existing or a new property.

The scheme has been an extraordinary success since its introduction at the start of last year, with more than 15,000 first home buyers having now taken it up and settled and moved into their homes.

The scheme was extended in October last year, with an additional 10,000 places on offer, however this was restricted to those building or buying a new property.

These places have proven to be popular and, in the three months since they became available, over 4,200 first home buyers have accessed these extra spots.

First home buyers have become a dominant force in the property market over the last year. Mr Sukkar pointed to figures from the Australian Bureau of Statistics from December, which shows that first home buyers are entering the market at the highest level since 2009.

The number of owner-occupier first home buyer loan commitments has risen by 9.3%, an increase of 56.6% from the same time last year.

Further to this, figures from NAB showed lending to first home buyers had increased by 21% against their 12-month average, with regional areas across the nation recording a 44% increase in first home buyer activity.

Further information about the First Home Loan Deposit Scheme can be found at www.nhfic.gov.au/what-we-do/fhlds/.

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Why you should feel confident about buying property right now

The property market has kicked off 2021 going full steam ahead with demand up in almost every corner of the country, according to CoreLogic data.

CoreLogic’s latest national home value index showed that housing values were up by 0.9% for the month of January, bringing them to a new record high.

Housing values have now surpassed their pre-COVID levels by 1.0% and are 0.7% higher than they were at their previous peak in September 2017.

But, can this price growth continue? 

There are a number of indicators that are pointing towards continued growth in 2021.

  • Low interest rates – One of the major reasons we are seeing so many people out buying up homes is that interest rates are ridiculously low. Money is cheap right now and with the RBA all but promising that they will remain low for at least the next 3 years, a lot of buyers are feeling confidence in borrowing.
  • Government’s are focused on growing the economy – Another big factor that is pushing up prices is government spending on housing and infrastructure. Not only are there federal schemes that encourage people to purchase a home (such as the First Home Loan Deposit Scheme and HomeBuilder) but local and state governments are splashing a lot of cash on new infrastructure that will improve job prospects and desirability in a lot of areas.
  • Lenders are keen to attract new customers – With such crazy low interest rates right now there are a lot of competitive deals available to help lenders attract customers. On top of this lending restrictions have eased, so a lot of buyers are getting into the market to take advantage of this.
  • Auction clearance rates are up – Another sign that the market is strong is the high level of auction activity. CoreLogic found that for their first week of auction reporting of the year that there was a preliminary auction clearance rate above 80%. While final numbers may be revised slightly lower, it is still higher than last year’s final auction clearance rate of 61%.
  • The sheer amount of buyers – While many have attributed the growth in house prices to the lack of housing stock on the market, low listings aren’t actually to blame. Data from SQM Research found that new listings were up 4.3% over January. It’s the high amount of buyers causing the undersupply of housing available, not a drop in new listings.

While growth is going to differ between regions and housing types, there’s little doubt that property demand is going to remain strong throughout 2021.

That means that it’s a good time to consider selling to make the most of the strong buyer demand, and it’s a good time to buy too because there are a lot of advantages to getting into the market right now.

penrith city park

Plans for Penrith’s City Park now on public exhibition

The heart of Penrith’s CBD is set to be transformed into a vibrant green space for the community to enjoy and it’s now one step closer, with a Development Application (DA) being formally submitted to Council.

Plans for the $12-million City Park include features such as themed gardens, water features, shaded areas and a green open space for outdoor activities.

At approximately 7,000sqm, City Park will be a significant open space and attractive drawcard for Penrith, located on the corner of Henry Street and Station Streets.

The project will play an important role in enhancing the Penrith CBD, and the addition of greenery, tree cover and water elements will have a positive impact on mitigating the heat island effect and cooling the city.

It will complement other developments Penrith Council has planned for the city, including a new parking and commercial tower at Soper Place, which has been designed with a rooftop garden to also help in efforts to cool the city down.

Overall, the new City Park is an exciting project for Penrith that will help give locals more chances to socialise, exercise, relax and entertain. It will help attract more people into the CBD and boost businesses in the area.

Construction on the project is due to begin later this year and be finished by early 2023.

How to have your say

The DA for the project will be on public exhibition until February 26, 2021.

You can view the DA (DA21/0047) online via Council’s DA Tracker at penrith.city/DATracker or at Penrith Civic Centre, 601 High Street, Penrith between 8.30am – 4.30pm.

 

Image via /www.penrithcity.nsw.gov.au

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Is it a good time to sell?

With natural disasters and a global pandemic going on, it’s no surprise that some people have been hesitant to put their homes on the market over the last year. 

But now that property market confidence has returned and property prices are reaching record highs, is now a good time to think about selling? Or should you wait to see if property prices climb higher?

Every market is different

First of all it’s important to remember that every property is different and therefore will be impacted by different market trends. That means that even if you see property prices in your city going up or down, your property may experience different results. 

One of the best things you can do to get a good idea of what your home might sell for is to research recently sold homes that are as close as possible to yours in terms of type and location, and chat to local real estate agents. They will be able to give you advice from being on the ground and give you a better idea of buyer behaviour in your neighbourhood. 

But in general, buyer activity is strong

While no two markets are exactly the same, in general there is a lot of buyer demand at present. That’s because interest rates are at record lows, there’s a lot of attractive government stimulus on offer and consumer confidence is high. 

Buyer demand is outstripping housing supply in a lot of areas, meaning that sellers are able to achieve strong sale prices for their homes. 

Those selling have the upper hand right now and can hold out for good prices, simply because there isn’t a lot of housing stock for buyers to choose from. 

Will prices go higher?

There are predictions that property prices will rise in 2021 but, as 2020 has shown us, nothing is for certain.

There’s a good chance that buyer activity will remain strong thanks to low interest rates looking like they’re here to stay for awhile, but the end of JobKeeper and JobSeeker in March could have an impact on the market, especially if it results in an increase in distressed sellers. 

Nothing is for certain but if you take the market as it is right now there are a lot of good fundamentals in place for those looking to sell.

You also have to keep in mind that if you’re looking to sell and upgrade to a new property it is much better to get before property prices rise, as you may end up paying a lot more for your subsequent property. 

While it might sound like a good idea to hold out and wait for prices to go up further, you need to keep in mind that prices will also go up on any property you purchase too. This means that you will be paying a higher percentage on a more expensive property, plus you will end up paying higher stamp duty and potentially higher lenders mortgage insurance too. 

So, if you’re thinking of selling to upgrade to a better home, it’s definitely a good idea to do so before the market takes off. 

Overall, everyone has to consider their own individual circumstances when it comes to a major decision like selling a home. But, with a lot of eager buyers out there waiting for the next property to drop, there are a lot of reasons why it could be a good time to sell.