The newest suburbs in Australia to crack the million-dollar mark

The newest suburbs in Australia to crack the million-dollar mark

COVID-19 and the economic downturn has done little to dampen the rise of million-dollar suburbs in Australia, new data reveals, though prices have come down more generally in the past three months.

Forty-six suburbs across the country entered the million-dollar club in the 12 months to June 2020, according to REA Group data.

Melbourne led the charge, with 24 suburbs tipping past the million-dollar median house price point, followed by Sydney with 14 and Brisbane with seven.

But median house prices in 10 suburbs fell below the million-dollar mark. Sydney and Melbourne saw four and three suburbs drop off the list respectively. This was followed by two suburbs in Adelaide and one in Brisbane.

It’s worth noting that suburbs with fewer than 30 sales in this period were excluded.

Sydney and Melbourne lead Australia’s premium property market

REA Group chief economist Nerida Conisbee said the top end of the property market has been “one of the most stable property markets during the COVID-19 pandemic”, as high-income sectors have yet to see widespread job losses.

“Over the last 12 months, more suburbs have entered the million-dollar club than suburbs that have fallen out, but there are still some opportunities to get into a premium suburb for six figures,” she said, adding that this is still possible in Brisbane and Adelaide.

Melbourne saw the greatest jump in suburbs with median prices in the seven figures, tallying 119 suburbs in the list, but Ms Conisbee said it was too early to tell how the second lockdown could impact the property market.

She added that Sydney homebuyers could find it harder to purchase a property close to the city with a six-figure budget.

“Highlighting the extreme pricing of Sydney, 15 suburbs joined the million-dollar club, now bringing the total to 209 million-dollar suburbs, and making it difficult to find an inner or middle ring suburb for under a million dollars,” Ms Conisbee said.

Why the property market is remaining stable

While national real estate prices have been edging lower in the past three months, the annual figures are still positive. Property values increased by 7.1 per cent nationally in the 12 months to July 2020, the latest CoreLogic data showed, but they fell 1.6 per cent in the three months to July.

CoreLogic’s head of research Tim Lawless said low housing stock and buyer incentives has helped protect the real estate market during COVID-19.

“Advertised supply levels have remained tight, with the total number of properties for sale falling a further 4.3 per cent in the four weeks to July 27, sitting 15.2 per cent below where they were this time last year,” he said.

“Additionally, increased demand driven by housing specific incentives from both federal and state governments, especially for first home buyers, have become more substantial.”

Ms Conisbee said housing prices have remained “stable”, despite the economic recession. She attributed this to four factors:

  • High levels of stimulus.
  • A stable banking system.
  • Mortgage repayment deferrals.
  • Relative confidence among buyers, particularly before the shutdowns.

Should you refinance your mortgage?

If real estate values have grown in your areas, it’s possible that you may have more equity in your property. With record-low interest rates, it may be a good opportunity to refinance your mortgage and pay a potentially lower interest rate.

External refinancing jumped about 50 per cent in the 12 months to June 2020, indicating many are taking advantage of the low interest rate environment.

If you’re an owner-occupier with substantial equity in your property, chances are lenders may see you as a reliable, low-risk borrower, and they may be more willing to do business with you. If you’d prefer not to move to another bank, your existing lender may also consider your request for a rate reduction.

But refinancing may not be for everyone. For instance, if you have plans to sell your property in the short to medium term, it may not be worth switching to a low fixed rate home loan.

New suburbs in the million-dollar club

Melbourne Sydney Brisbane
Blackburn North - $1.08m Arncliffe - $1.105m Samford Valley - $1.1m
Blackburn South - $1.101m Asquith - $1,019,500 Bardon - $1.01m
Box Hill South - $1,266,666 Belmore - $1,030,500 West End - $1.05m
Brunswick East - $1.001m Berowra Heights - $1.03m Fig Tree Pocket - $1.17m
Burwood East - $1,084,500 Bexley - $1,251,500 Ashgrove - $1.03m
Chadstone - $1.01m Glenwood - $1.04m Clayfield - $1,092,500
Cheltenham - $1,035,500 Jannali - $1.11m Grange - $1,123,500
Coburg - $1,027,500 Menai - $1.04m  
Collingwood - $1.075m Mount Colah - $1,062,500  
Edithvale - $1m Northmead - $1.01m  
Flemington - $1,019,500 Picnic Point - $1.05m  
Kensington - $1,115,500 The Ponds - $1.037m  
Kingsville - $1,017,500 Wamberal - $1.025m  
Maribyrnong - $1,012,500 Winston Hills - $1.022m  
Mentone - $1,040,500 Yarrawarrah - $1,023,500  
Mitcham - $1.02m    
Moorabbin - $1.14m    
Mt Martha - $1,022,500    
Nunawading - $1,035,500    
Preston - $1,010,500    
Rosanna - $1.115m    
Seddon - $1,009,500    
Vermont - $1.02m    
Wantirna South - $1,029,500    

Source: REA Group. Data is for the 12-month median price for houses, based on at least 30 sales in a suburb.

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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).

Can I apply for an ANZ non-resident home loan? 

You may be eligible to apply for an ANZ non-resident home loan only if you meet the following two conditions:

  1. You hold a Temporary Skill Shortage (TSS) visa or its predecessor, the Temporary Skilled Work (subclass 457) visa.
  2. Your job is included in the Australian government’s Medium and Long Term Strategic Skills List. 

However, non-resident home loan applications may need Foreign Investment Review Board (FIRB) approval in addition to meeting ANZ’s Mortgage Credit Requirements. Also, they may not be eligible for loans that require paying for Lender’s Mortgage Insurance (LMI). As a result, you may not be able to borrow more than 80 per cent of your home’s value. However, you can apply as a co-borrower with your spouse if they are a citizen of either Australia or New Zealand, or are a permanent resident.

Savings over

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.

Monthly Repayment

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.

Why should I get an ING home loan pre-approval?

When you apply for an ING home loan pre-approval, you might be required to provide proof of employment and income, savings, as well as details on any on-going debts. The lender could also make a credit enquiry against your name. If you’re pre-approved, you will know how much money ING is willing to lend you. 

Please note, however, that a pre-approval is nothing more than an idea of your ability to borrow funds and is not the final approval. You should receive the home loan approval  only after finalising the property and submitting a formal loan application to the lender, ING. Additionally, a pre-approval does not stay valid indefinitely, since your financial circumstances and the home loan market could change overnight.

 

 

Can I get a NAB home loan on casual employment?

While many lenders consider casual employees as high-risk borrowers because of their fluctuating incomes, there are a few specialist lenders, such as NAB, which may provide home loans to individuals employed on a casual basis. A NAB home loan for casual employment is essentially a low doc home loan specifically designed to help casually employed individuals who may be unable to provide standard financial documents. However, since such loans are deemed high risk compared to regular home loans, you could be charged higher rates and receive lower maximum LVRs (Loan to Value Ratio, which is the loan amount you can borrow against the value of the property).

While applying for a home loan as a casual employee, you will likely be asked to demonstrate that you've been working steadily and might need to provide group certificates for the last two years. It is at the lender’s discretion to pick either of the two group certificates and consider that to be your income. If you’ve not had the same job for several years, providing proof of income could be a bit of a challenge for you. In this scenario, some lenders may rely on your year to date (YTD) income, and instead calculate your yearly income from that.

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

How long does Bankwest take to approve home loans?

Full approval for a home loan usually involves a property valuation, which, Bankwest suggests, can take “a week or two”. As a result, getting your home loan approved may take longer. However, you may get full approval within this time if you applied for and received conditional approval, sometimes called a pre-approval, from Bankwest before finalising the home you want to buy.  

Another way of speeding up approvals can be by completing, signing, and submitting your home loan application digitally. Essentially, you give the bank or your mortgage broker a copy of your home’s sale contract and then complete the rest of the steps online. Bankwest has claimed this cuts the approval time to less than four days, although this may only happen if your income and credit history can be verified easily, or if your home’s valuation doesn’t take time.

Interest Rate

Your current home loan interest rate. To accurately calculate how much you could save, an accurate interest figure is required. If you are not certain, check your bank statement or log into your mortgage account.

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.

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.

What is a line of credit?

A line of credit, also known as a home equity loan, is a type of mortgage that allows you to borrow money using the equity in your property.

Equity is the value of your property, less any outstanding debt against it. For example, if you have a $500,000 property and a $300,000 mortgage against the property, then you have $200,000 equity. This is the portion of the property that you actually own.

This type of loan is a flexible mortgage that allows you to draw on funds when you need them, similar to a credit card.

What is a low-deposit home loan?

A low-deposit home loan is a mortgage where you need to borrow more than 80 per cent of the purchase price – in other words, your deposit is less than 20 per cent of the purchase price.

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.

As a general rule, you’ll need to pay LMI (lender’s mortgage insurance) if you take out a low-deposit home loan. You can use this LMI calculator to estimate your LMI payment.

What is equity and home equity?

The percentage of a property effectively ‘owned’ by the borrower, equity is calculated by subtracting the amount currently owing on a mortgage from the property’s current value. As you pay back your mortgage’s principal, your home equity increases. Equity can be affected by changes in market value or improvements to your property.