Signs of stability appear for Perth property

Signs of stability appear for Perth property

Declines in the Western Australian property market may be coming to an end, with preliminary figures gathered by the Real Estate Institute of Western Australia (REIWA) indicating that stability may be returning to the market.

According to REIWA president, Hayden Groves, little change was recorded to key market indicators over the June quarter, as opposed to the steep declines recorded in the recent past.  

“We’re certainly not experiencing the steep declines across the board we once were. Although no one can accurately ascertain the future of the property market, the signs are there that we have finally found, or are very close to finding, the ‘floor’ of the market.”

The REIWA’s preliminary figures found Perth’s median house price coming in at $500,000 in the June quarter. However, Mr Groves said that once all the transactions have settled, he expects the revised June median will come in much closer to the $515,000 recorded in the March quarter.

As for Perth units, the preliminary median of $412,000 was down just 1.8% on the $419,500 recorded in March 2017, indicating that once all sales have settled, the final figures for the quarter could actually end up coming in higher than the previous quarter.

REIWA found a total of 6188 dwelling sales in WA in preliminary figures for the June 2017 quarter – a similar number to the preliminary figures recorded in the previous March and December quarters.

According to Mr Groves, the relatively consistent sales activity is a welcome change from the declining trends being observed previously.

“Once all transactions for the quarter settle, we expect the final sales figure to lift to just above 9000, which will put it on par with the December and March quarter.”

“We’ve also seen a similar trend in the Perth metro area, with early reiwa.com data showing there were 4000 house sales over the quarter. This figure should lift to around 6100 once sales have settled, putting it on par with the revised March quarter figure and slightly higher than the same time last year, which is a trend we also witnessed last quarter.”

Listings for sale in Perth decreased from 14,841 at the end of March to 14,076 by the end of June, with Mr Groves attributing this 5.2% decline in stock levels of steadily improving sales transactions.

“Although we still have plentiful choice in the market, we do appear to have hit a ceiling and are no longer seeing the increases we once were. As long as transactions remain steady, we should see listing levels decline.”

The last indicators of a stabilising market were found to be the average number of days to sell a house, which in Perth dropped from 69 in the March quarter to 68 in the June quarter, and  the percentage of vendors discounting their asking price over the quarter, which dropped marginally to 54.8%, with the amount these sellers were having to reduce by rising from 6.4% in March to 6.6% in June.

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When do mortgage payments start after settlement?

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.

Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.

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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An IMB Bank reverse mortgage allows you to borrow against your home equity. You can draw down the loan amount as a lump sum, regular income stream, line of credit or a combination. The interest can either be fixed or variable. To understand the current rates, you can check the lender’s website.

No repayments are required as long as you live in the home. If you sell it or move to a senior living facility, the loan must be repaid in full. In some cases, this can also happen after you have died. Generally, the interest rates for reverse mortgages are higher than regular mortgage loans.

The interest is added to the loan amount and it is compounded. It means you’ll pay interest on the interest you accrue. Therefore, the longer you have the loan, the higher is the interest and the amount you’ll have to repay.

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.

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When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

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

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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.

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Generally, if you’re 60 years old, you can borrow up to 15 per cent of the property value. If you are older than 75 years, the amount you can access increases to up to 30 per cent. You can use a reverse mortgage calculator to know how much you can borrow.

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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.

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How can I get a home loan with no deposit?

Following the Global Financial Crisis, no-deposit loans, as they once used to be known, have largely been removed from the market. Now, if you wish to enter the market with no deposit, you will require a property of your own to secure a loan against or the assistance of a guarantor.

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Why should you trust Real Time Ratings?

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Real Time Ratings™ is a new idea and will change over time to match the frequently-evolving demands of the market. Some things won’t change though – it will always rate all relevent products in our database and will not be influenced by advertising.

If you have any feedback about Real Time Ratings™, please get in touch.

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