Melbourne dominating building and population growth

Melbourne dominating building and population growth

Melbourne had the strongest market for building and population growth throughout 2018, according to the latest Housing Industry Association (HIA) Population & Residential Building Hotspots report.

What is a ‘Hotspot’?

A ‘Hotspot’ is an area with at least $150 million worth of residential building approved during the 2016/17 financial year, and a rate of population growth that is faster than the national average.

National Top 20 Building and Population Hotspots

Statistical Area

 

State / Territory

Residential Building Approved, 2016/17 ($’000)

Annual Population Growth Rate (%)

1. Mickleham – Yuroke

VIC

222,872

35.3

2. Pimpama

QLD

352,035

30.8

3. Cranbourne East

VIC

638,571

27.4

4. Cobbitty – Leppington

NSW

610,382

21.9

5. Riverstone – Marsden Park

NSW

736,224

21.1

6. Wollert

VIC

173,239

20.8

7. Docklands

VIC

199,734

14.7

8. Beaconsfield – Officer

VIC

256,005

13.4

9. Point Cook – East

VIC

169,300

12.8

10. Truganina

VIC

202,036

11.9

11. Melbourne

VIC

622,251

11.2

12. Coomera

QLD

173,540

10.3

13. Cranbourne West

VIC

171,594

9.2

14. Melton South

VIC

161,037

9.1

15. Tarneit

VIC

299,838

9.0

16. South Brisbane

QLD

154,000

8.8

17. Springfield Lakes

QLD

184,943

8.7

18. Arncliffe – Bardwell Valley

NSW

513,026

8.6

19. Southbank

VIC

417,688

8.6

20. Homebush Bay – Silverwater

NSW

358,252

8.0

Source: HIA.com.au

This top 20 list of building growth areas shows that:

  • 12 of the Top 20 Hotspots are located in Victoria;
  • NSW contains 4 of the national Top 20;
  • Four of the country’s top Hotspots are in Queensland.

HIA’s Senior Economist, Shane Garrett stated that Melbourne “dominated this year’s HIA Hotspots Report, with 12 of Australia’s Top 20 building growth areas all located around Victoria’s capital”.

“The Mickleham-Yuroke area of Melbourne is Australia’s number one Hotspot, with population growth of 35.3 per cent during 2016/17 and $222.9 million in building approvals. 

“With a large volume of work still to be commenced, no downturn evident in approvals, and population growth still exceeding 2 per cent, Melbourne and its surrounding areas are likely to produce many Hotspots for building activity going into 2019. 

“Pimpana on the Gold Coast slipped to second place this year with Melbourne’s Cranbourne East area in third position nationally. 

“The remarkable performance of Melbourne in this year’s Hotspots report demonstrates how well the circle of job creation, population growth and new home building can boost an economy. 

“A number of Sydney’s Western and South Western suburbs are also on the move. From Leppington to Parramatta and Blacktown, the large pipeline of new housing will attract significant population growth. 

“In Queensland, the South Eastern corner is the focus of activity. Population growth in the South East has accelerated over the past year, indicating that Queensland is starting to see solid employment gains. 

“Coomera is also a regular on the Hotspots list, joined by South Brisbane where the apartment boom has resulted in significant approvals and population growth. 

“Even in those parts of the country that are experiencing challenging economic conditions, there are some bright spots on the local housing map. We have identified Hotspots in all states and territories which are underpinned by robust levels of new home building and increases in population,” concluded Shane Garrett.

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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).

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Your current monthly home loan repayment. To accurately calculate how much you could save, an accurate payment figure is required. If you are not certain, check your bank statement.

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Select a number of years to see how much money you can save with different home loans over time.

e.g. To see how much you could save in two years by switching mortgages,  set the slider to 2.

What is a building in course of erection loan?

Also known as a construction home loan, a building in course of erection (BICOE) loan loan allows you to draw down funds as a building project advances in order to pay the builders. This option is available on selected variable rate loans.

What is a construction loan?

A construction loan is loan taken out for the purpose of building or substantially renovating a residential property. Under this type of loan, the funds are released in stages when certain milestones in the construction process are reached. Once the building is complete, the loan will revert to a standard principal and interest mortgage.

Do the big four banks have guarantor home loans?

Yes, ANZ, Commonwealth Bank, NAB and Westpac all offer guarantor home loans. These mortgages are also offered by many other banks, credit unions and building societies.

What fees are there when buying a house?

Buying a home comes with ‘hidden fees’ that should be factored in when considering how much the total cost of your new home will be. These can include stamp duty, title registration costs, building inspection fees, loan establishment fee, lenders mortgage insurance (LMI), legal fees and bank valuation costs.

Tip: you can calculate your stamp duty costs as well as LMI in Rate City mortgage repayments calculator

Some of these fees can be taken out of the mix, such as LMI, if you have a big enough deposit or by asking your lender to waive establishment fees for your loan. Even so, fees can run into the thousands of dollars on top of the purchase price.

Keep this in mind when deciding if you are ready to make the move in to the property market.

Who offers 40 year mortgages?

Home loans spanning 40 years are offered by select lenders, though the loan period is much longer than a standard 30-year home loan. You're more likely to find a maximum of 35 years, such as is the case with Teacher’s Mutual Bank

Currently, 40 year home loan lenders in Australia include AlphaBeta Money, BCU, G&C Mutual Bank, Pepper, and Sydney Mutual Bank.

Even though these lengthier loans 35 to 40 year loans do exist on the market, they are not overwhelmingly popular, as the extra interest you pay compared to a 30-year loan can be over $100,000 or more.

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.

Remaining loan term

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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.

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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.

How long does NAB home loan approval take?

The time required to get your home loan from NAB approved can vary based on a number of factors involved in the application process. 

Once you have applied for a home loan, a NAB specialist will contact you within 24 hours over the phone to take down relevant information, including your total income, debts (existing loans, credit cards, etc.), assets (car, shares, etc.), and your monthly expenses (food, utility bills, etc.). Your lender might also ask for information related to the property you want to purchase, including the type of dwelling and preferred postcode.

NAB will then verify all your information and check your credit score, and if the details stack up, you should be given a conditional approval certificate. This certificate stipulates how much money NAB is willing to lend you and is typically valid for 90 days. 

Once you have your conditional approval, you can start browsing for properties that you like and that fit within the budget that NAB has provided. After you find a suitable property, you’ll need to give a copy of the signed deed to NAB, following which you should get full approval and access to the funds. This process can take up to 4-6 weeks.