Hilton Parkes Real Estate
13th April 2019

Rents Rise In Most Cities
Rents around the country have increased in the first three months of the year, with Hobart showing the biggest rise, according to researcher CoreLogic. CoreLogic’s first quarterly rental review broadly confirms earlier research on rents from SQM Research and rent.com.au. SQM Research figures indicate rents have increased in annual terms in all capital cities except Sydney and Darwin, while the CoreLogic data shows rents rose an average of 1% in the March Quarter. “This seasonally strong first quarter of 2019 has delivered the highest increase in weekly rents since the corresponding first quarter a year ago,” CoreLogic research analyst Cameron Kusher says. “Our regional housing markets are performing marginally better than the capital cities.” This reflects outcomes with prices, with most of the nation’s growth markets being in regional areas. In Hobart weekly rents rose 3.6% in the last quarter to $435 and increased 5.4% in the last year. However, with a median rent of $582 per week, Sydney remains the most expensive city.

Gearing Reform ‘Unpopular’: Survey

A new survey shows most Australians don’t understand the Federal Opposition’s real estate policy or how it could impact them. The report by JWS Research says 66% of Australians – polled from all age groups, political persuasions and socio-economic backgrounds – do not understand Labor’s proposed reforms to negative gearing and capital gains tax, while 34% are aware and understand the policy at some level. Further, 52% believe rents will go up and 74% believe there needs to be a review of the policy. “We have always said that changes to negative gearing and CGT for housing are bad policy,” says Graham Wolfe, managing director of the Housing Industry Association. “This research confirms how unpopular these changes are across all political persuasions. Twice as many voters oppose these changes as supporting them.” When Australians vote at the upcoming election in May, Wolfe says, most people are being asked to consider a key policy without properly understanding it or its impact.

Image Pursuit Holding Us Back

New research has found that 35% of Australians feel pressured to keep up appearances and maintain a certain lifestyle. Mortgage Choice and CoreData’s Financial Fitness whitepaper explores Australians’ attitudes and behaviours towards their finances. Mortgage Choice Chief Executive Officer Susan Mitchell says: “We found that Australians are feeling pressured to keep up appearances in order to maintain their lifestyles, which can come at a cost to their financial goals and their health and wellbeing. “The research revealed that 38% of Australians are choosing to forgo buying their own home in order to keep up appearances.” A strategic financial plan, which includes a budget and savings regimen, may be the answer to combating the pressure and stress involved with keeping up appearances, Mitchell says. “While 35% of respondents said they felt pressure to keep up appearances, this surged to almost 50% among respondents aged 30 years and younger. In contrast, only 20% of Australians aged between 51 and 60 felt pressured to keep up appearances.”

Banks Cut Home Loan Rates

The Commonwealth Bank has reduced interest rates on its fixed-rate loans for homeowners and investors. The cuts apply to a range of fixed-rate loans, with the biggest cut of 0.3 percentage points to its five-year owner-occupied loan to a new rate of 4.09%. The changes by CBA are further proof that lenders are desperate to lock in new customers, says Sally Tindall, the research director at comparison site RateCity. This follows earlier moves by ANZ to drop its interest rates on fixed-rate loans. Tindall says about 40 lenders have now dropped rates on more than 400 fixed-rate home loans since the beginning of this year.  Bendigo and Adelaide Bank is cutting interest rates on two home loan products. The bank says standard variable interest rates will decrease on its basic home loan products and online Bendigo Express home loan. Bendigo is reducing the variable interest rate on its express loan by 10 basis points to 3.79%, while the basic home loan sees a cut of 20 basis points to 3.79%. The reductions relate to owner-occupied home loans where the borrower is paying principal and interest.

Home Loans Beat Expectations

Australian housing finance rose in February, signalling (when taken with other evidence, such as improved auction clearance rates and recent price data) that the slump in big city dwelling prices may be levelling out.
The number of home-loan approvals, including refinancing, rose by a seasonally adjusted 2.0% in February from January, the ABS says. The value of loans for investment housing, excluding refinancing, rose 0.9% from January. Finance approvals to build new houses rose 2.5% in February. Approvals to buy newly built dwellings fell 2.4%, while lending for the purchase of established homes rose 0.7%. The number of owner-occupier home loans rose the most in the Northern Territory (14.2%), followed by the ACT (7.4%), Tasmania (6.2%) and Queensland (4.1%). The ABS figures also show that the number of first-home buyers in the market has hit a six-year high the market-share of FHBs rose from 26.8% to 27.1% in February. CommSec chief economist Craig James says the lift in home lending is encouraging. “The softer home prices are certainly bringing more first-home buyers into the market,” James says.

Quote of the Week 

“If these changes are made, rents will rise as supply dries up due to a lack of investment in new housing. This will make renting a home less affordable. If rents rise, renters saving for a deposit for their own home will take a backward step.”

Graham Wolfe, managing director of the Housing Industry Association, commenting on a survey on the impact of Labor’s negative gearing policy.