Mining town housing prices still on the decline

Mining town housing prices still on the decline

The days of the mining boom are well and truly over, as median house prices and annual sales in major mining regions continue to decline.   

Statistics from CoreLogic highlight the peaks and troughs of the mining boom that began in 2003 and propelled Australia’s economy forward.

While the rate of decline is substantially lower than it was at the mining regions’ peak, it’s important to note that in some regions there are signs that this starting to slow.  

 There is also still demand for housing in these towns. “It’s just that demand is substantially lower than it was during the mining boom.” Cameron Kusher from CoreLogic indicates.

 “Someone looking to purchase now is securing a property at a substantial discount from previous highs however, these towns also continue to achieve some of the best rental returns based on current pricing and rents.” Cameron Kusher said.

Key statistics:

Gladstone 

578 sales over the past year at a median price of $323,875.  Sales volumes are 68% lower than their July 2007 peak and median prices are 32% lower than their September 2012 peak. 

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Mackay 

1,216 sales over the past year at a median price of $335,000. Sales volumes are 63% lower than their April 2004 peak and median prices are 23% lower than their June 2013 peak. 

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Isaac

198 sales over the past year at a median price of $140,000. Sales volumes are 70% lower than their March 2012 peak and median prices are 77% lower than their November 2012 peak.

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Port Hedland

204 sales over the past year at a median price of $300,000. Sales volumes are 49% lower than their July 2006 peak and median prices are 67% lower than their June 2013 peak.

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Karratha

289 sales over the past year at a median price of $285,000. Sales volumes are 44% lower than their March 2005 peak and median prices are 65% lower than their October 2010 peak.

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Roxby Downs

31 sales over the past year at a median price of $225,000. Sales volumes are 83% lower than their December 2003 peak and median prices are 55% lower than their October 2013 peak.

istock_79305201_small5 Data Source: CoreLogic

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The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee. 

The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.

Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

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Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.

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Once the settlement process is complete, the lender allows you to draw down the loan. The loan amount is debited from your loan account. As soon as the settlement paperwork is sorted, you can collect the keys to your new home and work your way through the moving-in checklist.

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The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

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To work out how much you could save, we run the home loan details you’ve provided through our database, and search for similar home loan options that we think would be suitable for you.

We then calculate the costs of these loan options over 15 years (to keep our calculations consistent) and compare them to the cost calculations for your current home loan.

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Refinancing your home loan can involve a bit of paperwork but if you are moving on to a lower rate, it can save you thousands of dollars in the long-run. The first step is finding another loan on the market that you think will save you money over time or offer features that your current loan does not have. Once you have selected a couple of loans you are interested in, compare them with your current loan to see if you will save money in the long term on interest rates and fees. Remember to factor in any break fees and set up fees when assessing the cost of switching.

Once you have decided on a new loan it is simply a matter of contacting your existing and future lender to get the new loan set up. Beware that some lenders will revert your loan back to a 25 or 30 year term when you refinance which may mean initial lower repayments but may cost you more in the long run.

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For example, if you want to buy a $500,000 property, you’ll need a low-deposit home loan if your deposit is less than $100,000 and therefore you need to borrow more than $400,000.

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