Perth prepared for 2018

Perth prepared for 2018

The Real Estate Institute of Western Australia (REIWA) is forecasting steady and moderate improvement to the Perth property market in 2018, though we shouldn’t expect rapid growth in either the established housing or rental markets over the coming year.

According to the REIWA, following a very soft 2016, Perth experienced stable listings, sales and median house price levels in 2017.

REIWA president, Hayden Groves, described this stability across key market indicators as “a welcome change”, adding that “we can look back on 2017 as a transitional period that brought about the bottom of the market.”

An average of 489 Perth properties sold per week in 2017, with this figure expected to rise to 500 per week over the next 6 months. According to the REIWA, if sales volumes continue to trend at current levels, listing volumes will begin to fall, creating upward pressure on prices as demand builds.

Perth listings for sale peaked at 15,000 in early 2017, before reaching a new low of 13,000 in September. New dwelling activity is expected to decline in 2018, meaning the number of properties for sale in Perth are forecast to remain at current levels, commensurate with market parity, over the next year.

Perth’s rental listings also declined over 2017, from 11,000 in January to 9300 in December. At the same time, leasing activity levels were strong, with approximately 1180 rentals leased each week – a trend that could see the balance between supply and demand of stock continue to improve in 2018.

2017 also saw Perth’s median rent price stabilise at $350 per week since April, with this figure expected to remain steady through 2018, due in part to strong demand for family homes.

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The home loan market is complex. With almost 4,000 different loans on offer, it’s becoming increasingly difficult to work out which loans work for you.

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They’re impersonal 

Most comparison sites give you information about rates, fees and features, but expect you’ll pay more with a low advertised rate and $400 ongoing fee or a slightly higher rate and no ongoing fee. The answer is different for each borrower and depends on a number of variables, in particular how big your loan is. Comparisons are either done based on just today or projected over a full 25 or 30 year loan. That’s not how people borrow these days. While you may take a 30 year loan, most borrowers will either upgrade their house or switch their home loan within the first five years. 

You’re also expected to know exactly which features you want. This is fine for the experienced borrower, but most people know some flexibility is a good thing, but don’t know exactly which features offer more flexibility than others. 

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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.

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Who offers 40 year mortgages?

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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.

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