3 in 4 migrants move to NSW and Vic

3 in 4 migrants move to NSW and Vic

NSW and Victoria are by far the most popular states for migrants, helping explain why the Sydney and Melbourne property markets are performing so strongly.

NSW took 39.1 per cent of all migrants during the 2015-16 financial year, while Victoria took 35.7 per cent, according to new data from the Australian Bureau of Statistics.

Queensland was a distant third with 11.0 per cent, followed by Western Australia with 7.5 per cent, South Australia with 5.0 per cent, the ACT with 0.9 per cent, Tasmania with 0.6 per cent and the Northern Territory with 0.2 per cent.

New arrivals need somewhere to live, so higher levels of overseas and interstate migration generally produce increased competition to buy and rent properties.

Region Net overseas migration Net interstate migration Net migration Population boost from migration
NSW 71,161 -11,349 59,812 0.8%
Vic 65,007 16,699 81,706 1.4%
Qld 20,019 11,581 31,600 0.7%
SA 9,163 -6,398 2,765 0.2%
WA 13,640 -7,703 5,937 0.2%
Tas 1,143 42 1,185 0.2%
NT 420 -2,696 -2,276 0.9%
ACT 1,607 -176 1,431 0.4%
Australia 182,165 N/A 182,165 0.8%

Although NSW received 71,161 foreign arrivals, the state simultaneously lost 11,349 residents, giving it a net migration figure of 59,812.

Victoria actually had the highest level of net migration (81,706), with 65,007 people moving there from overseas and 16,699 people relocating from interstate.

Queensland had the next highest level of net migration (31,600), followed by Western Australia (5,937).

In percentage terms, Victoria experienced the biggest boost to its population from migration, with overseas and interstate arrivals increasing its numbers by 1.4 per cent.

The Northern Territory received a 0.9 per cent boost from net migration, while NSW received a 0.8 per cent boost.

Region Population Percentage
NSW 7,726,924 32.0%
Vic 6,069,636 25.2%
Qld 4,843,303 20.1%
SA 1,708,135 7.1%
WA 2,617,074 10.9%
Tas 519,063 2.2%
NT 245,191 1.0%
ACT 396,294 1.6%
Australia 24,128,876 100%

Sydney and Melbourne real estate booming

Sydney’s median property price jumped 16.0 per cent during the year to April, according to statistics from CoreLogic.

Melbourne was the second-strongest market, with the median price increasing 15.3 per cent.

That was followed by Hobart on 13.6 per cent and Canberra on 8.4 per cent.

Adelaide grew 2.2 per cent and Brisbane grew 2.1 per cent – in line with Australia’s inflation rate, which is 2.1 per cent.

However, the other two capitals went backwards, with Perth falling 6.0 per cent and Darwin falling 2.3 per cent.

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What are the pros and cons of no-deposit home loans?

It’s no longer possible to get a no-deposit home loan in Australia. In some circumstances, you might be able to take out a mortgage with a 5 per cent deposit – but before you do so, it’s important to weigh up the pros and cons.

The big advantage of borrowing 95 per cent (also known as a 95 per cent home loan) is that you get to buy your property sooner. That may be particularly important if you plan to purchase in a rising market, where prices are increasing faster than you can accumulate savings.

But 95 per cent home loans also have disadvantages. First, the 95 per cent home loan market is relatively small, so you’ll have fewer options to choose from. Second, you’ll probably have to pay LMI (lender’s mortgage insurance). Third, you’ll probably be charged a higher interest rate. Fourth, the more you borrow, the more you’ll ultimately have to pay in interest. Fifth, if your property declines in value, your mortgage might end up being worth more than your home.

Does Australia have no-deposit home loans?

Australia no longer has no-deposit home loans – or 100 per cent home loans as they’re also known – because they’re regarded as too risky.

However, some lenders allow some borrowers to take out mortgages with a 5 per cent deposit.

Another option is to source a deposit from elsewhere – either by using a parental guarantee or by drawing out equity from another property.

Interest Rate

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How much deposit will I need to buy a house?

A deposit of 20 per cent or more is ideal as it’s typically the amount a lender sees as ‘safe’. Being a safe borrower is a good position to be in as you’ll have a range of lenders to pick from, with some likely to offer up a lower interest rate as a reward. Additionally, a deposit of over 20 per cent usually eliminates the need for lender’s mortgage insurance (LMI) which can add thousands to the cost of buying your home.

While you can get a loan with as little as 5 per cent deposit, it’s definitely not the most advisable way to enter the home loan market. Banks view people with low deposits as ‘high risk’ and often charge higher interest rates as a precaution. The smaller your deposit, the more you’ll also have to pay in LMI as it works on a sliding scale dependent on your deposit size.

How much debt is too much?

A home loan is considered to be too large when the monthly repayments exceed 30 per cent of your pre-tax income. Anything over this threshold is officially known as ‘mortgage stress’ – and for good reason – it can seriously affect your lifestyle and your actual stress levels.

The best way to avoid mortgage stress is by factoring in a sizeable buffer of at least 2 – 3 per cent. If this then tips you over into the mortgage stress category, then it’s likely you’re taking on too much debt.

If you’re wondering if this kind of buffer is really necessary, consider this: historically, the average interest rate is around 7 per cent, so the chances of your 30 year loan spending half of its time above this rate is entirely plausible – and that’s before you’ve even factored in any of life’s emergencies such as the loss of one income or the arrival of a new family member.

Will I have to pay lenders' mortgage insurance twice if I refinance?

If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments. 

If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.

How can I get ANZ home loan pre-approval?

Shopping for a new home is an exciting experience and getting a pre-approval on the loan may give you the peace of mind that you are looking at properties within your budget. 

At the time of applying for the ANZ Bank home loan pre-approval, you will be required to provide proof of employment and income, along with records of your savings and debts.

An ANZ home loan pre-approval time frame is usually up to three months. However, being pre-approved doesn’t necessarily mean you will get your home loan. Other factors could lead to your home loan application being rejected, even with a prior pre-approval. Some factors include the property evaluation not meeting the bank’s criteria or a change in your financial circumstances.

You can make an application for ANZ home loan pre-approval online or call on 1800100641 Mon-Fri 8.00 am to 8.00 pm (AEST).

Does Australia have no cost refinancing?

No Cost Refinancing is an option available in the US where the lender or broker covers your switching costs, such as appraisal fees and settlement costs. Unfortunately, no cost refinancing isn’t available in Australia.

Can I change jobs while I am applying for a home loan?

Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements. 

If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out. 

If I don't like my new lender after I refinance, can I go back to my previous lender?

If you wish to return to your previous lender after refinancing, you will have to go through the refinancing process again and pay a second set of discharge and upfront fees. 

Therefore, before you refinance, it’s important to weigh up the new prospective lender against your current lender in a number of areas, including fees, flexibility, customer service and interest rate.

Can I refinance if I have other products bundled with my home loan?

If your home loan was part of a package deal that included access to credit cards, transaction accounts or term deposits from the same lender, switching all of these over to a new lender can seem daunting. However, some lenders offer to manage part of this process for you as an incentive to refinance with them – contact your lender to learn more about what they offer.