Single parents and first home buyers get big budget boost

Single parents saving for a property and first home buyers are the big winners from this year’s federal budget. Today we’ll break down the three schemes that will help them crack the property market sooner.

In recent months there have been signs that first home buyers are beginning to shy away from the property market, as investors return in big numbers to take advantage of optimistic property market price outlooks.

So this year’s federal budget focussed on giving first home buyers and single parents a big leg up into the property market through three key schemes, which we’ve broken down for you below.

1. Single parents to purchase a home with a 2% deposit

Single parents hunting for a home will only need to save a 2% deposit to crack into the property market if they secure a place in the federal government’s new Family Home Guarantee scheme.

The scheme allows eligible single parents with dependants to borrow with a deposit under 20% without having to fork out for lenders mortgage insurance (LMI), as the government will guarantee up to 18% of the loan.

An initial 10,000 places will be available under the scheme, which will start on 1 July 2021 and run for four years.

Here’s a quick example of how it works.

Mary is a single parent with two young sons, Johnny and James. Mary has found the perfect home for $460,000 but has struggled to save enough for the usual $92,000 deposit (20%) while paying rent.

However, with the Family Home Guarantee, and on the success of her application with a lender, Mary could move into her dream home sooner, with just a $9,200 deposit (2%).

2. Buying or building your first home with a 5% deposit

Those hoping to build their first home with just a 5% deposit could soon do so thanks to an extension of the First Home Loan Deposit Scheme (FHLDS) for new builds.

The federal government has announced another 10,000 spots in the scheme will be available for new builds from July 1.

Those 10,000 spots are in addition to 10,000 places already allocated for existing home purchases under the scheme, which also become available from July 1.

So that’s 20,000 spots in total across new and existing builds!

The FHLDS allows eligible first home buyers to break into the property market sooner, as you only need a 5% deposit to purchase a property without paying for LMI.

This can save you anywhere between $4,000 and $40,000, depending on the property price and the deposit amount you’ve saved.

You can find out more about the FHLDS and eligibility requirements by getting in touch with us, or on the NHFIC website.

3. Saving a deposit by salary sacrificing in your Super account

The First Home Super Saver scheme will allow you to put up to $50,000 in voluntary superannuation contributions towards a first home deposit from 1 July 2022. Previously only $30,000 could be released for the purposes of buying a first home.

The increase will fast-track homeownership for first home buyers and the government says it recognises that deposits required for home purchases have increased over the years due to house price growth.

Here’s a quick example of how the scheme works.

Sue is an occupational therapist who earns $80,000 per year and wants to buy a new home.

Using salary sacrifice, she directs $12,500 of pre-tax income into her superannuation account each year.

After concessional contributions tax, her balance increases by $10,625. After four years, Sue is able to withdraw $45,226 of contributions and the deemed earnings on those contributions.

Withdrawal tax is applied at a concessional rate of 4.5%, which is Sue’s marginal tax rate minus a 30% tax offset. Sue now has $43,191 she can put towards buying her first home.

Sue’s partner, Rob, makes the same income and also salary sacrifices $12,500 annually to his superannuation fund over the same four years.

Combined, Sue and Rob have $86,382 to put towards their first home, which is $20,838 more than if they were to save in a standard savings account.

Prepare to apply

While the two LMI-related schemes will be available from July 1, it’s important to get ready to apply for them now.

In recent years the 10,000 spots in the FHLDS have been snatched up within a few months, and we’ve had more than a few hopeful applicants reach out to us when it’s too late.

So to help avoid disappointment, get in touch with us today and we can help you get everything in order prior to the schemes kicking off in the new financial year.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

SMEs to get full asset write-off extension and fairer go with ATO

Small businesses in dispute with the ATO over their tax debt will get “a fairer go” under new rules proposed in the federal budget. Meanwhile, one-year extensions have been granted for the full asset write-off and loss carry-back schemes. Let’s break it all down.

There’s a lot to digest in this year’s pandemic-recovery federal budget.

So today we’ve chosen to focus on just a few key budget announcements we feel may help SMEs manage finance and debt in the years to come.

Temporary full asset write-off and loss carry-back extensions

Great news for small businesses keen to invest in their future: they can continue to write off the full value of assets purchased until 30 June 2023.

The popular scheme, called ‘temporary full expensing’, is an expanded version of the popular instant asset write-off scheme.

It allows businesses, both big and small, to immediately write off any eligible depreciable asset, at any cost, until 30 June 2023.

This can help improve your cash flow by allowing you to reinvest the funds back into your business sooner.

To complement this, the federal government’s ‘loss carry back’ provision has also been extended to 30 June 2023.

“This is a tax initiative that effectively allows a small business to carry back tax losses from 2022/23 income year to offset previously taxed profits as far back as 2018/19, to support business recovery,” explains Small Business Ombudsman Bruce Billson.

Third umpire to pause ATO debt recovery actions during disputes

Small businesses will soon be able to apply to the Administrative Appeals Tribunal (AAT) to pause or modify ATO debt recovery actions where the debt is being disputed.

“Small businesses disputing an ATO debt in the AAT will get a fairer go by stopping the ATO from relentlessly pushing on with debt recovery actions against a small business, while the case is being heard,” Mr Billson explains.

Currently, small businesses are only able to pause or modify ATO debt recovery actions through the court system, which can be expensive and time-consuming.

“Under the proposed changes, small businesses can save thousands of dollars in legal fees, not to mention up to two months waiting for a ruling,” adds Mr Billson.

The AAT will be able to pause or modify ATO debt recovery actions, such as garnishee notices, interest charges and other penalties until the dispute is resolved.

“It means that rather than spending time and money fighting in court, small business owners can get on with what they do best – running and growing their business,” says Mr Billson.

Get in touch for finance for your business

While it’s all well and good to have the AAT pause ATO debt recovery instead of the courts, the fact remains that many small businesses will still need to pay their ATO debt back.

So if the ATO is seeking a tax debt from your business, get in touch to discuss finance options for repaying them sooner, and giving you some breathing space.

And if we backtrack to the beginning of this article, being able to immediately write off assets is all well and good, but if you don’t have access to the funds to purchase them, the ‘temporary full expensing scheme’ won’t be of much use to you.

So if you’d like help obtaining finance to make the most of temporary full expensing for your business – whether it’s this financial year or next – reach out to us today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Is it cheaper to buy or rent your next home? You might be surprised

While it might feel like property prices are skyrocketing out of reach, the majority of Australian homes are actually cheaper to buy than rent over the next decade, according to a new report.

The latest REA Insights Buy or Rent 2021 Report reveals it is cheaper to buy than rent around 57% of dwellings across Australia, based on modest housing price growth of 3% per year over the next decade.

Now, the results differ by property type and from state to state, which we’ve broken down further below.

But across the nation, the report found that just over half of houses are cheaper to buy over the next 10 years, while the share of units that are cheaper to buy is almost 75%.

So why is it generally cheaper to buy than rent across the nation?

Well, record-low mortgage interest rates are the main driver of favourable buying conditions.

“Interest rates can currently be fixed below 2% per year and the Reserve Bank of Australia has committed to maintaining low-interest rates until at least 2024,” explains Realestate.com.au economist Paul Ryan.

“This certainty that mortgage costs are not going to increase rapidly provides comfort to buyers borrowing larger amounts.”

Given these low-interest expenses, Mr Ryan says that moderate property price growth (which means having an asset that’s growing in value) will likely offset the additional costs of owning a property, such as stamp duty, maintenance and council or strata rates.

State vs state breakdown

Below is REA Insight’s state-by-state breakdown of the percentage of suburbs where it is cheaper to buy than rent. Houses below have three bedrooms, units have two bedrooms:

NSW: 41.3% (of suburbs) for houses, 69.1% (of suburbs) for units

Victoria: 42.2% for houses, 67.6% for units

Queensland: 85.4% for houses, 98.4% for units

South Australia: 73.6% for houses, 98.4% for units

Western Australia: 69.7% for houses, 98.4% for units

Tasmania: 73.2% for houses, 100% for units

Northern Territory: 97.6% for houses, 100% for units

ACT: 65.7% for houses, 100% for units

So here’s the catch in the analysis

The REA Insights analysis assumes buyers already have access to a 20% deposit, which remains the biggest hurdle for many buyers – especially for first home buyers as prices continue to rise.

“Many would-be buyers can already afford loan repayments, but struggle to save a deposit while renting,” adds Mr Ryan.

“Continued price growth may cause additional concern for many in this position.”

How we can help you start buying, and stop renting

As mentioned just above, saving for a house deposit is the biggest hurdle for many of those dreaming of living in a home they can call their own.

But the good news is that there are several potential options to help you get a foot on the property ladder quicker.

One option is the First Home Loan Deposit Scheme, which allows eligible first home buyers with only a 5% deposit to purchase a property without paying for lenders mortgage insurance (LMI).

It’s due to accept applications for a further 10,000 hopeful homebuyers from July.

There’s also a range of first home buyer grants and stamp duty concessions around the country that you might be eligible to apply for.

For more information, give us a call today – we’d love to discuss with you your finance options to help you make the leap from renter to buyer.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Business demand for equipment has hit record numbers

Businesses across the country are purchasing new equipment and vehicles in record numbers, as companies big and small embrace the strongest market conditions seen in years, according to NAB data.

And with the end of the financial year approaching quickly, we’re expecting demand for equipment and vehicles to remain strong, with businesses looking to invest in their future by taking advantage of the federal government’s temporary full expensing rules (more on that below).

NAB believes the demand for new equipment is the result of a bumpy 2020, when businesses were forced to ‘pivot’ and innovate their way through the pandemic.

And now Australian businesses are investing to build on the opportunities they uncovered.

“With business confidence at an all-time high and businesses building on things they’ve learnt through the pandemic, I’m not surprised that equipment sales are so high,” says NAB Executive Regional and Agribusiness Julie Rynski.

The top equipment purchases Australian businesses have made according to NAB include:

– tractors up 146% year-on-year (YOY)
– irrigation equipment up 217% (YOY)
– earthmoving/construction equipment up 133% (YOY)
– forklifts up 216% (YOY)
– coffee machines up 155% (YOY)

What’s that ‘temporary full expensing’ thing you mentioned?

Temporary full expensing is more or less an expanded version of the federal government’s popular instant asset write-off scheme.

It allows businesses, both big and small, to immediately write off any eligible depreciable asset, at any cost, up until 30 June 2022.

This can help improve your business’s cash flow by allowing you to reinvest the funds back into your business sooner.

But it’s important to note that the asset must be installed, or ready for use, by 30 June in order to be eligible for this financial year.

Full details on business and asset eligibility can be found on the ATO’s website.

Want to explore your finance options for a new business asset?

Being able to immediately write off assets is all well and good, but if you don’t have access to the funds to purchase them, the scheme won’t be of much use to you.

So if you’d like help obtaining finance to make the most of temporary full expensing for your business, get in touch with us today.

We can present you with financing options for the scheme that are well suited to your business’s needs now, and into the future.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Has the housing market’s latest record-breaking run peaked?

Property prices climbed at a breathtaking pace in early 2021, which has been good news for homeowners and heartbreaking for house hunters. However, there are seven key signs that the pace of capital gains has peaked, says CoreLogic.

Now, it’s important to note that CoreLogic is not suggesting that housing values are about to dip.

Far from it.

Rather, CoreLogic believes the housing market is “moving through a peak rate of growth and the pace of capital gains will gradually taper over coming months”.

“Overall, we are expecting housing values to continue to rise throughout 2021 and most likely throughout 2022, just not at the unsustainable pace of growth that has been evident over recent months,” explains CoreLogic’s Head of Research Tim Lawless.

Below are the seven signs they’ve identified.

1. CoreLogic’s home value index indicates a slowdown

CoreLogic’s rolling four-week change in dwelling values shows Sydney’s rate of growth has dropped from 3.5% (in the four weeks leading up to 21 March) to 2.3% (in the four weeks to 21 April).

Meanwhile, Melbourne dropped from 2.5% to 1.5%, Brisbane from 2% to 1.8%, and Perth from 1.5% to 0.9%.

The only mainland state capital to record an increase was Adelaide, up 1.7% from 1.2%.

2. Auction clearance rates have dropped

Historically, there’s been a strong positive correlation between auction clearance rates and the pace of appreciation in housing values, says Mr Lawless.

Recently, however, there has been a slight softening in auction clearance results.

The weighted average clearance rate moved through a recent high of 83.1% in the last week of March, before dropping to 78.6% in the week ending 18 April.

3. Vendor activity has increased

There has been a considerable rise in new listings as vendors look to capitalise on the market’s strong selling conditions.

In the four weeks to 18 April as many as 26,470 capital city properties were added to the market, says CoreLogic.

“That’s the largest number of new listings for this time of the year since 2016 and 17% above the five-year average,” adds Mr Lawless.

4. Housing supply is on the rise

Thanks to HomeBuilder, there has been a significant lift in housing construction activity that will add to overall supply levels in the coming months.

Approvals for new dwelling construction are at record highs, points out CoreLogic, and dwelling commencements over the December quarter were almost 20% higher than a year earlier and 5.5% above the decade average.

5. Population growth has turned negative

Due to current tight border restrictions, it’s much harder to get into Australia than usual.

That’s led to a decline in population growth, which can also have an impact on housing demand (although it’s more likely to have a bigger impact on rental markets, as the majority of migrants rent before buying).

“Population growth, which is an important component of housing demand, has turned negative for the first time since 1916 due to closed borders and stalled overseas migration,” adds Mr Lawless.

6. Fewer government incentives and schemes available

You might have heard that applications for the HomeBuilder grant, which started off at $25,000 before being reduced to $15,000, have now closed.

On top of that, JobKeeper has also finished, and JobSeeker has been dialled back.

“Australia is moving into a new phase of the economic recovery where there is substantially less fiscal support which could result in a reduction of housing market activity,” says Mr Lawless.

7. Higher barriers for homebuyers looking to crack the market

Last but not least: the higher prices rise, the higher the entry barrier for home buyers.

And the higher the entry barrier, the fewer active house hunters there are, which means less demand to drive up prices.

“For those looking to enter the market, growth in housing values is substantially outpacing incomes, which means a growing deposit hurdle for first home buyers,” explains Mr Lawless.

Get in touch today for help overcoming these barriers

As you can see, there’s a case to be made that the rate of property price growth has peaked.

But Mr Lawless warns there are still a variety of factors that are likely to keep upward pressure on housing values for some time, including the record-low official cash rate, which the RBA says won’t lift “until 2024 at the earliest”.

So while prices are expected to continue to increase – and it might feel like you’re running on the spot – please know that potential solutions do exist for keen homebuyers.

For example, the federal government’s First Home Loan Deposit Scheme is due to accept another 10,000 applications in early July, allowing eligible first home buyers with only a 5% deposit to purchase a property without paying for lenders mortgage insurance (LMI).

For more information, give us a call – we’d love to help you out.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

HomeBuilder extension gives applicants extra 12 months to start building

Tens of thousands of HomeBuilder applicants around the nation can breathe a sigh of relief after the federal government extended the construction commencement requirement from six months to 18 months.

It’s fair to say that the success of the HomeBuilder program caught a lot of people off guard and, as a result, contributed to a surge in demand for manpower within the residential construction industry.

In fact, more than 121,000 Australians applied for the HomeBuilder grant, which is expected to support around $30 billion worth of residential construction projects.

“The number of new houses that commenced construction in the December quarter was the second-highest level on record,” says Housing Industry Association’s chief economist Tim Reardon.

Long story short: the $25,000 and $15,000 grants incentivised so many people to build or renovate their homes that many builders were going to be unable to turn the first sod within the required six-month time frame.

So who exactly will the extension benefit?

Ok, so if you haven’t lodged an application for the HomeBuilder grant, then bad news, this extension won’t apply to you as the application deadline was April 14.

This extension will benefit those who’ve already applied and signed contracts during the HomeBuilder eligibility period between 4 June 2020 and 31 March 2021.

It means applicants now have 18 months – from the date an eligible contract was signed – for construction to begin on their property.

Treasurer Josh Frydenberg says the extension will help smooth out the HomeBuilder construction pipeline and support construction jobs over a longer period of time.

“It will also ensure that existing applicants facing difficulties in starting construction on their new builds and renovations are not denied a HomeBuilder grant due to circumstances outside their control,” explains Mr Frydenberg.

Need finance for your HomeBuilder project?

If you applied for finance while making your HomeBuilder grant application several months ago, get in touch with us today to double-check it’s still the most suitable option for you (much has changed in the past months!).

And if you’ve signed a building contract for HomeBuilder, but haven’t got around to exploring finance options just yet, then be sure to reach out to us soon – we’d love to run through some solutions with you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

How long do you have to snap up a property in the current market?

You open up the real estate app on your phone, scroll through a few listings, and then there it is: the home of your dreams, ‘added 1 hour ago’. So just how long do you typically have to act in this hot market?

Well, let’s just say it definitely helps to have spoken to us about pre-approval if you’re actively house-hunting right now.

That’s because the average number of days properties are listed for sale on realestate.com.au reached record lows in every state in March, according to the REA Insights Housing Market Indicators Report April 2021.

And that’s likely got something to do with the fact that demand is extremely strong, with ‘views per listing’ at record highs.

So just how long are properties listed for?

The average number of days properties were listed on the realestate.com.au website was 48 in March 2021.

Properties sold the fastest in the ACT (average of 25 days listed), New South Wales (27 days) and Victoria (30 days).

Tasmania (37 days), South Australia (48 days) and Queensland (54 days) were positioned in the middle of the pack, however, they dropped 9, 17 and 19 days respectively over the course of the month.

And while properties in Western Australia (71 days) and the Northern Territory (59 days) took the longest time to sell on average, they recorded the largest falls in average time online over the past year, down 28 and 14 days respectively.

Views per listing and property price searches are also up

Properties are currently viewed an average of 1694 times on realestate.com.au – up from 819 in March 2020.

“This growth can be attributed to several factors, including record-low borrowing costs, government support packages for first-home buyers and limited available stock,” the REA report states.

Buyers are also on the hunt for more expensive properties than they were a year ago.

The percentage of searches for properties valued between $750,000 and $2,000,000 has increased to 52% in 2021, up from 47% in 2020.

Get in touch today to find out more about pre-approval

Make no mistake: competition amongst buyers is fierce.

More people are house hunting for more expensive properties, with fewer days to secure finance for the home of their dreams.

This all highlights the importance of exploring your borrowing options with us in advance, in order to increase your chances of securing a property in this hot market.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

COVID-19 repayment amnesty over: how to avoid a bad credit rating

The COVID-19 loan deferral program and credit reporting amnesty is now over, which means banks will report any late repayments on mortgage or small business loans to credit agencies unless you’ve entered into a hardship arrangement.

The banks’ mortgage deferral program and subsequent credit score reporting amnesty officially ended on April 1.

The package was created during the peak of COVID-19 to provide loan repayment relief for almost one million home and business loan borrowers facing financial hardship.

Luckily, many people have since been able to resume their repayments – as of late February, just 2,803 small business loans (1.2%) and 22,480 housing loans (5%) were still deferred, figures show.

But, we’re not out of the woods yet.

The JobKeeper wage subsidy scheme has also just officially ended, which has the potential to put tens of thousands of households and businesses at risk once more.

If you think you might be impacted by JobKeeper, read on

Latest reports indicate up to 150,000 workers could lose their jobs this month due to JobKeeper ending.

If your ability to repay your home or small business loan might be affected in the months ahead, then it’s important to act now, rather than wait until after you’ve missed a repayment.

That’s because by then it could be too late and it might end up on your credit file.

Your most appropriate course of action, however, will depend on your individual circumstances, which we’ve broken up into two categories below.

Category 1: Repayments will be tight, but possibly doable

If your upcoming loan repayments are looking tight, but possibly doable, then get in touch with us today to discuss some financing options that might make your repayments more manageable.

These options might include:

– switching to interest-only repayments for a period of time,
– renegotiating your rate with your current lender,
– refinancing to another lender,
– debt consolidation, or
– a combination of these and other measures.

Category 2: You don’t think you’ll be able to make your repayments

If you’ve lost your job due to JobKeeper ending, for example, and the chances of making your repayments are looking a little grim, then it’s important to get in touch with your bank today to discuss entering into a hardship arrangement.

Not only will this potentially give you some breathing space on your repayments, but it will help keep any missed payments off your credit file, as the Australian Banking Association states below:

“For customers that enter into another form of hardship or forbearance arrangement with their bank, banks will not report the repayment history information. Instead, they will leave the field blank for the duration of the arrangement.”

If you’d like to discuss any of the above in further detail please don’t hesitate to get in touch today – we’re here to help any way we can.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Fixed mortgage rates set to rise in coming months: experts

House prices could jump 17% in 2021 and mortgage rates are set to rise much sooner than expected, ANZ Bank has tipped.

How much earlier than expected?

Well, the Reserve Bank has repeatedly said the official cash rate isn’t likely to increase for a few years, but ANZ senior economist Felicity Emmett believes fixed-mortgage rates have already reached their lowest point, or close to it.

In recent times, more than 30% of new loans have been at fixed rates, says Ms Emmett, with two to three-year fixed-term interest rates available below 2%.

But that’s unlikely to be the case for much longer, she believes.

“In the second half of the year these sub-2%, three-year fixed rates that we’re seeing advertised at the moment are less likely to be around,” says Ms Emmett.

“Cheaper funding is not available forever and that will feed through into variable mortgage rates too.”

Shane Oliver, Chief Economist at AMP Capital, also believes fixed mortgage rates “have already started to bottom out”.

“It’s likely that the 30-year tailwind for the property market of falling interest rates has now run its course and longer dated fixed rates (4+ years) are starting to rise,” adds Mr Oliver.

Wait, did you say ANZ is tipping property prices to increase 17%?

That’s right. ANZ economists expect house prices to rise by a “sharp” 17% across the capital cities in 2021.

They’re tipping Sydney and Perth to perform best with 19% growth, followed by Hobart (18%), Melbourne and Brisbane (16%), and Adelaide (13%).

ANZ’s forecast is much more bullish than those of Commonwealth Bank and Westpac, which in February predicted price increases of 8% and 10% respectively.

Ms Emmet says low housing stock levels are combining with FOMO (fear of missing out) to help drive up the market.

“Buyers are taking advantage of historically low interest rates, particularly fixed rates, as well as various government support programs,” Ms Emmet said.

Got a bit of FOMO yourself?

After the relative hibernation of last year, there’s certainly a lot going on in the world of property and finance right now.

So, if you’d like to chat to us about financing a new home you’ve got your eye on, or refinancing your existing loan, get in touch today and we’ll help sort out that FOMO for you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Free new mental health support service for small business owners

Floods, fire and pandemic – it’s been an incredibly tough 15 months for many Australian businesses. And with government support about to end, looking after your mental health will be just as important as taking care of your business’s financial health.

With the federal government’s COVID-19 JobKeeper wage subsidy scheme expiring on 28 March, experts are tipping as many as a quarter of a million jobs could be lost.

When you also consider that rental eviction moratoriums are coming to an end in several states, and flooding is taking place across large parts of Australia’s east, then there is a lot of pressure on small businesses owners across the country right now.

Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Bruce Billson says it’s important for small business owners to consider their mental health and reach out if they’re not coping.

“Help is available to small business owners who need it. NewAccess for Small Business Owners offers free one-on-one telehealth sessions with specially trained mental health coaches providing evidence-based advice on strategies for managing stress,” he says.

Free mental health support

Developed by BeyondBlue, NewAccess is a confidential mental health program where coaches with a small business background work with business owners to tackle challenges.

Businesses can access up to six sessions, with the initial 60-minute assessment designed to talk through your challenges, develop a problem statement and create a personalised needs-based plan.

Subsequent half-hour sessions involve the business coach stepping you through your plan, providing practical tools for managing stress, and reviewing progress.

“Being able to talk to someone who understands the mental load of running a small business will make a real difference,” Mr Billson says.

“Small business owners who look after their mental health, can also help their business.”

No doctor’s referral or mental health treatment plan is required and the free service is available via phone or video call from 8am to 8pm.

Business health support

NewAccess has been incorporated into the ASBFEO’s My Business Health tool, which provides assistance in three key areas.

The section on how to keep your business afloat looks at government support, managing outgoings and cashflow.

How to manage your business explores COVID-19, staffing, workplace health and safety, resolving disputes and insolvency challenges. Where to access support includes a 5-minute wellbeing checkup, links to support services and natural disaster recovery.

And lastly, your business’s financial health

If it’s your business’s finances that are causing you stress, please know that there are lender support services to help you navigate financial challenges.

For example, Australian banks offer a range of financial support options to help farmers and small businesses affected by natural disasters, such as the NSW floods, which can include:

– a deferral of scheduled loan repayments
– waiving fees and charges, including break costs on early access to term deposits
– debt consolidation to help make repayments more manageable
– restructuring existing loans, without the usual establishment fees
– deferring interest payments on a case-by-case basis
– offering additional finance to help cover cash flow shortages.

If you’d like to talk through how some of these options may help your business, please don’t hesitate to get in touch with us or your lender today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

How do you compare: how much of your pay goes to your mortgage?

The property market is going through a boom phase, which means housing affordability is getting tougher. So how much does the average Australian household need to put towards their monthly home loan repayments in the current market? Let’s take a look.

You’ve probably noticed the housing market is going a bit crazy at the moment.

FOMO has taken hold and many properties across the country are selling well above their reserve.

As such, housing affordability has deteriorated, says Moody’s Investor Service, reversing the improving trend seen in 2020 during the peak of the coronavirus crisis.

So what percentage of a pay cheque goes towards a typical home loan?

On average, two-income households need to put aside a quarter (24.6%) of their monthly income to meet repayments on a new home loan, as of February 2021.

That’s up from 22.7% in June and July 2020, when new mortgages were the most affordable they’ve been in a decade.

The deterioration in housing affordability was evident in all capital cities over the five months to February 2021, with Perth remaining the most affordable and Sydney the least.

That said, housing affordability still remains better than the ten-year average of 26.1% and well under its peak of 30.7% in April 2011.

That’s because the average mortgage interest rate has nearly halved to 3.65% since 2011, according to Moody’s.

Want to know how much you can borrow?

Got your eye on an exciting new property and want to know if you can get a loan for it?

Get in touch today and we’ll help you crunch the numbers, work out your borrowing capacity, and discuss your finance options.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Do you have a succession plan in place for your business?

Who would take the reins of your family business if you had to take a step back from it? Turns out just one-in-six businesses have a proper plan in place. But rest assured you can develop your own succession plan fairly painlessly, with the help of a new guide.

So … it turns out the Murdochs aren’t alone when it comes to succession headaches.

Latest family business data from KPMG shows that just 17% of Australian family businesses have a documented succession plan to safeguard the longevity of their business.

That means a whopping 83% of businesses intend to wing it and do it on the fly.

Fortunately, the newly released ‘Introductory Guide to Family Business Succession Planning’ provides a step-by-step guide to passing the family business on to the next generation.

“Succession planning can be challenging,” Family Business Australia (FBA) CEO Greg Griffith says.

“But with the right approach, supported by quality information and advice, you can achieve rewarding outcomes.”

Why it’s important to have a plan in place

Australian Small Business and Family Enterprise Ombudsman Kate Carnell says there has never been a more important time to initiate a succession plan, given the highest proportion of business owners are aged between 45 and 59 years.

“Australia’s most successful family business stories – and there are many – are a result of well-executed succession planning,” Ms Carnell says.

“More than 60% of employing small business owners are approaching retirement age. This generational shift presents a number of challenges for the sector and the economy more broadly as some business owners may find it difficult to attract a buyer.”

Mr Griffith adds the easy-to-read guide offers tips on how to handle the kinds of tense conversations that can occur between family members throughout the transition phase.

“The key to families working well together is to have really open and honest communication – which can be difficult when your boss, colleague or direct report is also a member of your family,” Mr Griffith says.

“Our succession planning guide offers practical tips to ensure an orderly transition process.”

Understanding your family business’s finance situation

One critical area highlighted in the guide is the importance of your successor understanding your family business’s finance situation.

“You may also want to engage people outside the family and the business. In our experience, businesses can benefit from guidance from advisors in areas such as business finance: to understand the nuances of your family and business finances,” the report states.

Now, we understand that money and finances can be a difficult subject to discuss with family members.

So if you’re thinking of passing the baton to a family member – and you’d like help bringing them up-to-speed on your business’s finance obligations, opportunities and outlook – then please get in touch today.

We’re here to help your business succeed now, and in the hands of the next generation (engage!).

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

$15,000 HomeBuilder grant deadline fast approaching

Thinking of building, buying a new home or renovating? The HomeBuilder scheme ends on March 31, which means you’ve got less than two weeks to take advantage of the $15,000 grant.

The Australian government scheme, which was initially due to end in December but was extended to 31 March, has led to a big spike in new home sales in recent months.

And experts are tipping HomeBuilder applications will continue to rise before the impending cut-off date.

“We expect a surge in sales in March,” says Housing Industry Association (HIA) Economist Angela Lillicrap.

“Record low-interest rates and rising house prices are sustaining market confidence into 2021. This strong level of consumer confidence combined with the demographic shift to regional areas is driving ongoing demand for new detached homes.”

What’s the HomeBuilder scheme again?

The current iteration of the HomeBuilder program provides eligible applicants with a $15,000 tax-free grant for building contracts (new builds and substantial renovations) signed between 1 January and 31 March 2021, inclusive.

Applications for the grant can be submitted to the relevant State Revenue Office by 14 April 2021, and construction must commence within six months of the building contract being signed.

There are a number of property price caps worth noting, too.

For new builds, the property value cannot exceed $950,000 in NSW, $850,000 in Victoria, or $750,000 in all other states and territories.

For renovations, the reno contract must exceed $150,000 and the value of the property cannot exceed $1.5 million (pre-renovation).

Properties eligible for the grant

Two weeks might feel like you’re cutting it a bit fine, right?

But rest assured there are a range of build and property types (including ready-to-go ones) that can be eligible for the grant if construction commencement deadlines are met, including:

– off-the-plan apartments
– house and land packages
– new home purchases
– new home builds (on vacant land)
– substantial renovations.

How to take advantage of the grant

With the HomeBuilder deadline now literally days away, it goes without saying that time is ticking.

So get in touch today for more information on how you can take advantage of this $15,000 grant before it ends.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

7 ways to make your property more attractive to potential buyers

Did you know more than a third of Australian homeowners are considering putting their property up for sale so they can take advantage of the current boom in prices? Here’s how to get your property looking spick and span for prospective buyers.

New data shows seller confidence is now higher than it was prior to the COVID-19 pandemic, with 35% of homeowners considering selling by 2026, Westpac says.

And 12% of homeowners are already in the process of putting their house on the market or are planning to do so in the next 12 months.

So, if you’re a homeowner keen to sell your property in the current hot market, below are seven ways you could make it more attractive to potential buyers.

1. Bathroom boost

We hate to say it, but your bathroom/s will likely attract more scrutiny from prospective buyers than any other room.

If your bathroom is moderately new and not too dated, simply pay some professional cleaners to get it sparkling.

However, if your bathroom is fairly dated, consider updating some of the obvious essentials such as a new sink or tapware, updated countertops and cabinets, and a fresh coat of paint.

Also, ensure the taps and shower head are shiny and not leaking, and the toilet is spotless.

2. Kitchen kit-out

Giving the bathroom a good run for its money in terms of scrutiny is the kitchen.

Rest assured there are ways you can revitalise it without blowing the budget, such as replacing old cupboards and pantry doors, upgrading the benchtops, and making sure the taps and electrical fittings are in good working order.

And don’t forget that your kitchen appliances also act as sales props. If they’re old and outdated, they’ll bring the rest of the kitchen down with them. The good news is if you have to buy new appliances, at least you can take them with you!

3. Floor flaws

Nothing screams “I’ve seen better days” like stained carpet, scuffed floorboards, or chipped tiles.

If the floor a prospective buyer is standing on is dirty and dated, it won’t be long until they start thinking about what else is wrong with the house that they can’t immediately see.

If it’s within your budget, definitely consider giving this part of your property a makeover before inviting potential buyers in.

4. Pot plants

One of the quickest and cheapest ways of making the inside of your home feel more alive is to add a bit of greenery in each room.

Pot plants are fantastic because they’re low maintenance, make your place look great, and are great for your health.

And once again, rather than leaving them behind, like most other things on this list, you can take them with you when you sell your property.

5. Energy efficiency

Properties with high energy-efficiency ratings typically sell for up to 10% more, a review of international research shows.

The government’s Your Home website is a great starting point when it comes to making your property more energy-efficient and environmentally sustainable.

It includes information and tips on how to include more energy-saving features in your home, which may include improved lighting technologies, insulation, draught sealing and batteries, to name a few.

6. Paint pizzazz

A fresh coat of paint can make a property look and feel new again. And fortunately, it’s among the most affordable ideas on this list.

Best to play it a little safe though and go for neutral creams and whites that will suit most people’s tastes – you’ll attract more interested buyers that way.

And remember, lighter shades like beige and white also give the impression of more spacious rooms.

Finally, don’t forget the ceilings, even if they’re hard to reach!

7. Gardening gains

First impressions last – so one way to instantly increase the initial ‘wow’ factor of your home is to upgrade its exterior.

Trim any overgrown bushes, mow the yard, apply grass seed where there are bare patches, get some new flowers and plants in the garden beds, and ensure the fence looks great.

If you don’t have the tools for the job, or you’re simply more of an indoors person, consider hiring a landscaper to help out.

Got your eye on your own property upgrade?

If you’re thinking about selling your current property to buy elsewhere, get in touch today to discuss your finance options and borrowing capacity.

We’d love to take some weight off your shoulders when it comes to everything finance, so you can focus on getting your current property ready for sale!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Boom time: Australian home values surging at fastest pace in 17 years

It’s official: Australia’s housing market is in the midst of a broad-based boom, with the national home value surging 2.1% higher in February; the largest month-on-month change since 2003.

We haven’t seen this kind of fast-paced growth since Guy Sebastian robbed Nollsie to win Australian Idol, Roger Federer won his first of 20 grand slams (against the Scud at Wimbledon), and people primarily used their mobile phones to make calls (well, and play Snake).

The February surge, which was recorded by CoreLogic’s national home value index, was spurred on by a combination of record low mortgage rates, improving economic conditions, government incentives and low advertised supply levels.

What areas experienced growth?

Well, that’s the remarkable part.

Housing values rose in each capital city and rest-of-state region, highlighting the unusual and diverse nature of this housing upswing.

According to CoreLogic’s research director Tim Lawless, a synchronised growth phase like this hasn’t been seen in Australia for more than a decade.

“The last time we saw a sustained period where every capital city and rest-of-state region was rising in value was mid-2009 through to early 2010, as post-GFC stimulus fueled buyer demand,” says Mr Lawless.

So which areas performed best then?

Sydney and Melbourne were among the strongest performing markets, recording a 2.5% and 2.1% lift in home values over the month respectively, and making up for their weaker performances throughout 2020.

The quarterly trend, however, favours the smaller cities, including Darwin (up 5.5% over the past three months), Hobart (4.8%), Perth (4.2%) and Canberra (3.7%).

And Mr Lawless says whether Sydney and Melbourne can sustain their new found growth is yet to be determined.

“Both cities are still recording values below their earlier peaks, however at this current rate of appreciation it won’t be long before Australia’s two most expensive capital city markets are moving through new record highs,” he adds.

“With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge in these cities.”

New home lending is up, cash rate remains on hold

There were two other very interesting pieces of news this week definitely worth noting for soon-to-be borrowers and refinancers.

Firstly, latest figures from the Australian Bureau of Statistics show the value of new home lending hit $28.75 billion in January, up a whopping 44% from the same time a year earlier in seasonally-adjusted terms.

That’s a record high, according to the ABS, and is reflective of the record low interest rates currently available.

Meanwhile, the Reserve Bank of Australia (RBA) kept the official cash rate on hold at 0.1% during their March meeting.

Now, the RBA Governor Philip Lowe once again stated he doesn’t believe that the economic conditions required to increase the cash rate will be met until at least 2024.

But, there are more and more economic pundits suggesting he might be forced into a change of heart if the prudential regulator (APRA) doesn’t introduce lending caps to help cool the booming property market.

So with all that in mind, if you’d like to explore your borrowing or refinancing options in the current lending landscape – before any potential changes come into play – get in touch today.

We’re here to help you with all your home loan and refinancing needs.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

SME credit demand improves, lenders begin next phase of COVID-19 support

Things are starting to look better for small business owners across the country with just 5% of deferred business loans yet to resume repayments. Meanwhile, there are signs that business credit demand is improving, especially when it comes to asset finance.

The first bit of data comes from the Australian Banking Association (ABA), which shows just 11,263 business loans across the country are yet to resume repayments.

That’s a huge drop from the height of the pandemic back in June when more than 200,000 small business loans were deferred.

With automatic loan deferrals now coming to an end, the next phase of support for borrowers who are unable to make reduced repayments or restructure their loans will involve assistance from specialised hardship teams.

As part of this support, banks have developed an industry-wide, consistent approach to hardship and a new online assistant hub to guide customers in financial hardship and improve transparency.

“Customers can expect a thoughtful and compassionate approach, with clear and transparent explanations, regardless of who they bank with,” says ABA CEO Anna Bligh.

Credit demand improving

The other positive news for business confidence around the nation is that credit demand is showing signs of recovery, especially when it comes to asset finance.

Equifax’s Quarterly Business Credit Demand Index for the December 2020 quarter shows that while business loan applications were down 10.1% from the year before, the rate of decline has softened.

Applications in Victoria were up 7% in December 2020 compared to the September quarter, closely followed by Queensland and Western Australia (+5%).

Better yet, asset finance applications were actually 0.2% higher than the same period a year earlier.

“While overall business credit demand remains down, it is encouraging to see that there are signs of a turnaround,” says Equifax’s General Manager Commercial and Property Services Scott Mason.

“The lifting of extended restrictions in Victoria has allowed for a rebound in business credit applications driven by asset finance.”

How’s 2021 looking for your business?

If you’re starting to feel confident about your business’s outlook in 2021, and you want to explore your finance options to make the most of any upcoming opportunities, then please get in touch.

It’s worth mentioning that the federal government's temporary full expensing’ scheme – which allows businesses to immediately deduct the business portion of the cost of eligible new depreciating assets – is in place until 30 June 2022.

If you’d like to find out more about how it could assist with your business’s cash flow when purchasing assets, feel free to give us a call today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Tick tock – is time running out for first home buyers?

The first home buyer market had a bumper year in 2020 due to modest declines in property prices, reduced investor activity, and a range of government incentives. But with those advantages tailing off, how will first home buyers compete in 2021?

Another week, another big bank tipping national property prices are set to boom.

This week it was Westpac’s turn, with their senior economist tipping property prices to increase 10% in 2021 and another 10% in 2022.

This follows AMP predicting a 5-10% property price increase in 2021, and Commonwealth Bank expecting house prices will increase by 9% in 2021 and 7% in 2022.

Meanwhile, auction clearance rates are high – in the 80% plus range, according to CoreLogic.

So is time running out for first home buyers?

Not at all, but it sure won’t get any easier as property prices increase throughout the year.

Furthermore, the federal government’s HomeBuilder scheme is set to finish at the end of March.

The scheme provides buyers with $15,000 grants to build or substantially renovate homes that are generally in the first home buyer price range.

With the above in mind, the REA Insights Property Outlook Report 2021 states that ‘first home buyers are set to moderate in 2021’.

“In 2021, it is unlikely first home buyers will continue to be as active as they were. Prices are moving quickly; investors are coming back and any incentives available to first home buyers are likely to be eased,” the recently released report says.

The REA adds that first home buyers tend to be more active in slower markets when they can take their time.

But with savvy property investors returning to the market, this can add pressure to first home buyers.

“Investors and first home buyers frequently target the same sorts of properties at similar price points,” explains the report.

So what can first home buyers do to compete in 2021?

Rest assured there are a number of strategies first home buyers can employ to crack the property market in 2021.

With competition for properties heating up, it’s important to have your ducks-in-a-row when it comes to finance before you start looking.

This can help you find properties within your price range, identify any additional costs you may not have factored in yet, and make an offer while your preferred property is still available.

It’s also worth noting that the federal government is set to release another 10,000 spots in its First Home Loan Deposit Scheme on July 1, which can help you buy your first home with a deposit of just 5% without having to pay lenders mortgage insurance (LMI).

Another consideration is shifting the focus of your property search – whether that be the location or property type.

For example, house prices are predicted to grow a lot quicker than apartment prices this year.

So if you’re not quite ready to buy just yet, and it appears that properties are rising quickly out of your price range, consider that the apartment market should move more slowly.

Get the ball rolling today

If you’d like to discuss more options when it comes to obtaining finance to pay for your much-anticipated first home, get in touch with us today.

As mentioned above, the more prepared you are when it comes to financing your first home, the less stressful the whole buying process will be.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

“On the cusp of a boom”: CBA’s assessment of the housing market

Australia’s housing market is on the “cusp of a boom”, with house prices set to leap 16% over the next two years, according to the Commonwealth Bank (CBA).

The head of economics at Australia’s biggest bank, Gareth Aird, predicts national house prices will surge 9% in 2021 and a further 7% in 2022.

Apartment prices meanwhile are predicted to rise 5% in 2021 and 4% in 2022.

“The negative impact that COVID-19 had on Australian property prices turned out to be much more muted than almost any forecaster expected,” Mr Aird has written in a note to clients.

The CBA prediction is similar to that contained in an internal RBA FOI document, which projects house prices could rise by up to 30% if interest rates remain low over the next three years (which the RBA has indicated will happen).

So what can we expect across the country?

In Sydney and Melbourne, dwelling (house and apartment) prices are predicted to grow by at least 12% in the next two years, says Mr Aird.

That would see Sydney’s median dwelling price increase by a whopping $160,000 to $1.2 million, and Melbourne’s median dwelling price increase by $110,000 to $920,000.

Meanwhile, Perth values are tipped to rise 17.7% ($99,000), Brisbane 16.6% ($102,000), and Canberra 15.5% ($132,000).

Rounding out the capital cities, Adelaide is predicted to increase 14.5% ($86,000), Hobart 15% ($87,000) and Darwin 18% ($99,000).

So when and why are property prices set to increase?

Well, it appears as though the “boom” may have already just begun, Mr Aird explains in a CBA podcast.

“Over the first two weeks of February, national prices are up 0.8%. So we’re looking at over 1.5% in February alone,” says Mr Aird.

“Prices are now rising in all capital cities. And they’re rising quite quickly.”

Mr Aird says a strong indicator for property prices is lending figures, and over the last four to five months lending has picked up quite significantly.

“It’s quite intuitive when you think about it. The money that people borrow ends up going into the housing market, and that then pushes up housing prices. There’s usually about a six month lead time,” he explains.

“Initially, that (lending) was with owner-occupiers, but more recently it has spilled over to investors. And that is now feeding into house prices.”

Another strong indicator is auction clearance rates, adds Mr Aird.

“They are very, very firm at the moment. Nationally we’re seeing it sit in the 80s (percent), which historically has been consistent with double-digit dwelling price growth,” he says.

Other key momentum builders are the RBA advising that the record-low official cash rate won’t increase until 2024, says Mr Aird, and strong recovery in the labour market.

“The fact that the Reserve Bank has given explicit public guidance that rates are going to stay very, very low for a number of years, that’s given borrowers a lot of confidence to go out there and take on debt,” he says.

“All of those inputs that go into our model are screaming that house price rises could be faster than at any point we’ve seen before, and our model goes back 10 years.”

Explore your options

If you’re one of the many prospective homebuyers who are feeling confident about the housing market right now and want to explore your financing options, get in touch today.

We’re more than happy to help you determine whether you can finance that home you have your eye on before the next housing boom takes off.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Digital transformation: how does your business compare?

How well placed is your retail business when it comes to its digital transformation? Today we’ll look at some of the ways your competitors might be complementing their bricks and mortar stores with online empires.

For some retailers, COVID-19 was the death knell for their business. For others, it gave a much-needed nudge to supplement in-store sales with thriving online hubs.

So how well did you transform your business compared to your competitors in 2020?

Well, Retail Express conducted a benchmarking study of 22,000 Australian and New Zealand retailers across multiple sectors throughout 2020.

It looked at something called “omni-channel” retail, which is defined as “an approach to sales that focuses on providing seamless customer experience whether the client is shopping online, from a mobile device, a laptop or in a brick-and-mortar store”.

The study’s key findings

Founder and CEO of Retail Express, Aaron Blackman, says “the quality of a retailer’s eCommerce store, Click & Collect services and home delivery speed have now become key factors in who consumers decide to shop with.”

And the study demonstrates significant opportunities for Australian retail businesses to improve, with less than a third of surveyed retailers offering key omni-channel practices:

Click and collect: 26% of retailers offer this service

Display stock in store on website: 14%

Display live inventory available for online orders: 3%

Ship from store: 21%

Cross-channel gift vouchers: 26%

Inter-store stock transfers: 21%

Pre-orders: 13%

Investing in tech moving forward

As a business owner, it’s important not to think of 2020 as a once-off. Instead, consider that disruption is the new normal.

As such, Mr Blackman says retailers should be constantly thinking of ways to improve their omni-channel offerings.

“Just offering online shopping with Click & Collect will no longer be a competitive advantage, same day Click & Collect, and the speed of home delivery will be the benchmark,” he suggests.

In 2021 and beyond, digital transformation will be a significant priority as retailers look for ways to adapt to future disruptions, adds Mr Blackman.

“Now is the time for retailers to plan and design a robust and flexible operating model including a review of current systems and technology looking for all possible efficiency gains,” he says.

Get in touch

If you think now is the time to invest in your digital offerings, then get in touch today to discuss your funding options.

Obtaining the right finance is an important step when it comes to implementing the right technology, processes and personnel to fund your business’s future.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Back up for grabs: 1800 first home buyer scheme spots reissued

Great news just in for first home buyers: the Australian government will reissue 1800 First Home Loan Deposit Scheme (FHLDS) spots from the 2019-20 financial year.  

The 1800 spots are back up for grabs because people who previously reserved a spot in the Australian government scheme were unable to complete the purchase of their first home.

Their loss can be your gain!

The FHLDS allows eligible first home buyers to break into the property market sooner, as you only need a 5% deposit to purchase a property without paying for lenders mortgage insurance (LMI).

This can save you anywhere between $4,000 and $40,000, depending on the property price and the deposit amount you’ve saved.

More locations now possible

Ok, so the FHLDS has these things called ‘property price thresholds’.

Basically, they mean you can only qualify for the scheme if you purchase a property under a certain price tag in certain locations.

The good news is that the thresholds were recently increased to allow first home buyers a greater range of options.

And helpfully, property research group CoreLogic has just identified suburbs that – due to COVID-19 and the slight impact it had on inner-city apartment prices – are now a prime option for first home buyers in Sydney, Melbourne, Brisbane and Perth.

They’ve identified 23 suburbs where median unit values have slipped below the FHLDS property price thresholds in the past 12 months.

Here’s the full list, but some highlights include:

Sydney: Strathfield, Arncliffe, Ashfield, Gladesville, Wentworth Point.

Melbourne: Brunswick, South Melbourne, St Kilda East, Thornbury, Docklands.

Brisbane: South Brisbane.

Perth: Munster.

Time’s ticking!

It’s important to note that FHLDS spots are usually reserved pretty quickly.

So if you’re thinking about purchasing your first home soon and want to make the most of the scheme, give us a call today – we’ll help you get the ball rolling on applying with one of the scheme’s participating lenders.

And even if you are unable to jag one of the 1800 reissued spots, you’ll be in a prime position to apply when a further 10,000 spots are released on July 1.

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