Victoria could take top housing spot from NSW

Victoria could take top housing spot from NSW

The reign of New South Wales as Australia’s leader in housing construction could be on the verge of coming to an end, with Victoria poised to potentially usurp the position in 2018. Meanwhile, increasing activity in Tasmania and Western Australia could see these areas grow significantly in the future.

The HIA Housing Scorecard – Winter 2017 (a half yearly review of residential building conditions in each state and territory) from the Housing Industry Association (HIA) has seen NSW at the top of its ranking for the past two years, followed by Victoria in second place, both fuelled by strong population growth, house prices and demand for affordable housing.

However, with construction starting to slow as housing developments are completed, it’s possible that Victoria could overtake NSW and claim the HIA’s top spot by 2018.  With many property investors leaving the market due to increased levels of regulation around interest-only loans, it would take significant first home buyer activity to keep NSW in the top spot. But due to housing affordability challenges, this scenario could be unlikely.

One of the big movers of then HIA Housing Scorecard proved to be Tasmania, which was one of just two states that recorded increases to residential building activity, with room left to grow further in the future. These findings align with recent SQM research that saw strong growth in Hobart’s asking rents over the past few years.

The other state that saw residential building activity increase was WA, which had previously been struggling following the end of the resources boom. As previously noted by HIA, WA’s housing market appears to be reaching an equilibrium, and with the recorded improvement to building activity, the state could be on the verge of returning to strength.

HIA Housing Scorecard – Winter 2017

Rank State State score Score change Rank change Market momentum
1 NSW 94 -3 Unchanged Neutral
2 VIC 85 -2 Unchanged Neutral
3 QLD 65 -7 Unchanged Negative
4 ACT 64 -3 Up 1 Neutral
5 TAS 63 17 Up 3 Positive
6 SA 58 2 Down 2 Neutral
7 WA 38 5 Down 1 Positive
8 NT 37 -9 Down 1 Negative

Source: HIA

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While there are no limitations on how you can use a Macquarie reverse mortgage loan, a reverse mortgage is not right for all borrowers. Reverse mortgages compound the interest, which means you end up paying interest on your interest. They can also affect your entitlement to things like the pension It’s important to think carefully, read up and speak with your family before you apply for a reverse mortgage.

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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.

How is interest charged on a reverse mortgage from IMB Bank?

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.

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When does Commonwealth Bank charge an early exit fee?

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You can access the equity in your home to help you fund your needs during your senior years. A ME Bank reverse mortgage allows you to tap into the equity you’ve built up in your home while you continue living in your house. You can also use the funds to pay for your move to a retirement home and repay the loan when you sell the property.

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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.

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.

How much is the first home buyer's grant?

The first home buyer grant amount will vary depending on what state you’re in and the value of the property that you are purchasing. In general, they start around $10,000 but it is advisable to check your eligibility for the grant as well as how much you are entitled to with your state or territory’s revenue office.

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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.

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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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