Property Mortgage Update And Housing Affordability In NSW
Interest Rates and the big 4
The purple line in the chart below indicates that variable home loan rates mirror the stable RBA cash rate. There has been not much change over the last 6 months.
You will however see that both kinds of fixed rate mortgages have to a small extent increased over the last 3 months. Having said that, the two are still historically low.
Every quarter we collect a housing affordability report that is commissioned by the REIA (Real Estate Institute of Australia).
As a mortgage broker we especially like this report because it itemises the total number of loans carried out in each state. nevertheless, we thought a outline of the affordability statistics would be useful.
There were a number of other gripping findings that came out of this report:
1. In the last 12 months median family incomes enlarged in every state.
2. The normal loan size enlarged by less than 5% in every state (except Queensland, small decline).
3. The number of loans to first home buyers expanded in every state except QLD & NSW where substantial decreases occurred.
4. Australian Capital Territory maintains its self as being the cheaper state/territory in which to buy a home.
The present low interest rate environment is without a doubt having a meaningful impact on housing affordability and numerous investors are getting in to the market as a result.
We have also discovered that many investors are fixing their interest rates on their loans in order to continue these historically low rates.
This news will seemingly confirm what you have thought. The medium cost of transfer stamp duty on a suburban property has gone through the roof in NSW.
We have had a good look at the State government’s stamp duty data and have been startled to find out that the medium residential property buyer is now coughing up $8,290 more in Stamp Duty than
they were in 2005. Check out the table we have made below.
We were fighting to come up with a headline for this email that correctly pictured the degree of this tax burden. Here are some of our attempts:
“Bracket Creep rip off“
“NSW Govt cruels the real estate market”
“Call to ban property admission fees”
“Decrease stamp duty on owner occupied homes”
“Time for the State Govt to reset Stamp Duty”
“Climbing home prices, a bonanza for Govt coffers”
My largest concern is the lowering impact that this government impost is placing on our real estate market. Plainly, an extra $8,290 ($22,760 — $14,470) is going to delay a property buyer’s ability to partake in home ownership.
As Sydney property prices endure to climb, buyers are remaining pushed into towering stamp duty brackets. There has not been a solid alteration to these bracket milestones for a very long time. I conclude it is time for the government to promise an urgent review. We hope the media will lock on to this story. As we have observed in recent times, media pressure is very influential in our democracy.
We are certain the cash-strapped government is delight in with the massive jump in revenue but this tax has now develop into a substantial load on NSW home buyers. Time for a critical review.
If you would like to talk about this or any other money management matters, please give me a call.
About Aaron Sainsbury
With expertise spanning mortgage lending, property law, property investment and borrowing to invest within Self Managed Superannuation, Aaron Sainsbury offers more than 25 years professional advisory expertise.
He is an enthusiastic supporter of financial literacy, working closely with clients to help them gain and maintain control of their financial future.
Aaron is thoroughly committed to building lifelong relationships with clients based on the highest quality service, advice and trust.
Contact Aaron direct on 02 9818 8643 .
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