Australian Property Market Update

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Interest rate announcement – July 2020
As a result of the ongoing impact of the COVID-19 Pandemic, the RBA cut the offical cash rate to an unprecedented low of 0.25% in back in April 2020. Since then, the RBA has left the rate on hold at this level in an attempt to help support the economy. Today, the RBA decided to leave the cash rate on hold at 0.25% while reaffirming its commitment to continue injecting substantial liquidity into the financial system in line with the package announced by the bank in March this year.

The Australian property market fell for the second month running, with the national index down 0.7% in June. Each of the five largest capital cities recorded a decline, ranging from a drop of 1.1% in Melbourne and Perth to 0.2% in Adelaide. However, Hobart, Canberra and Darwin rose marginally.

CoreLogic head of research, Tim Lawless, said “The downwards pressure on home values has remained mild to-date, with capital city dwelling values falling a cumulative 1.3% over the past two months. A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stock levels and significant government stimulus. Additionally, low interest rates and forbearance policies from lenders have helped to keep urgent sales off the market, providing further insulation to housing values.”

Recent value falls represent an interrupted upswing across most regions, reflected in high annual growth rates. “The twelve month change in home values remains in positive double digit territory across Sydney (13.3%) and Melbourne (10.2%). The only capitals where values show declines on an annual basis are Perth and Darwin, but even across these cities, home values were early into a recovery phase pre-COVID.” Mr Lawless said.

Table 1: Changes in Dwelling Values as at 30 June 2020

 MonthQuarterAnnualTotal returnMedian value
Sydney-0.8-0.813.316.7$875,749
Melbourne-1.1-2.310.213.8$683,529
Brisbane-0.4-0.24.48.4$503,148
Adelaide-0.20.72.06.5$440.267
Perth-1.1-1.4-2.51.6$441,977
Hobart0.31.06.411.9$487,827
Darwin0.30.4-1.55.7$387,914
Canberra0.10.76.311.2$639,965
Combined capitals-0.8-1.18.912.5$641,671
Combined regional-0.20.33.78.5$394,570
National-0.7-0.87.811.7$554,741

Source: CoreLogic Hedonic Home Value Index, June 2020

Although the decline in home values has been fairly mild since April, the longer term outlook remains highly uncertain. “While it is encouraging to see lenders have recently hinted at an extension in their repayment leniency policies, the government stimulus will eventually taper and banks will require borrowers to repay their loans. The longer term outlook for the housing market is largely dependent on how well the economy is tracking when these support measures are removed,” Mr Lawless said.

First Home Loan Deposit Scheme

10,000 new places under the Australian Government’s First Home Loan Deposit Scheme are now available for the 2020-21 financial year. Under the Scheme, eligible first home buyers can purchase a modest home with a deposit of as little as five per cent.

First home buyers can check their eligibility and apply for one of the 10,000 Scheme places for the 2020-21 financial year through Harvest Property Loans.

Applications from 1 July will require a 2019-20 Notice of Assessment from the Australian Taxation Office to demonstrate that their taxable income is no more than $125,000 for individuals and $200,000 for couples.

For more information on the First Home Loan Deposit Scheme, please contact Harvest Property Loans on loans@harvestgroup.com.au or call 02 8908 4300.

Home Builder Grant

HomeBuilder will provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020. Construction must commence within three months of the contract date.

Home Builder will complement existing State and Territory first homeowner grant programs, stamp duty concessions and other grant schemes, as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.

Our Current Best Interest Rates

The best home loan rates we currently have available:

  • Variable rate of 2.55% pa (comparison rate: 3.04% pa)
  • 1 year fixed rate of 2.18% pa (comparison rate: 3.57% pa)
  • 2 year fixed rate of 2.18% pa (comparison rate: 3.57% pa)
  • 3 year fixed rate of 2.19% pa (comparison rate: 3.03% pa)
  • 5 year fixed rate of 2.59% pa (comparison rate: 2.59% pa)

Assumptions: <$400,000 loan, owner-occupied purchase, principle & interest, LVR < 80%.

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