Reserve Bank Interest Rate Announcement – August 2014
Today the Reserve Bank of Australia met to review the official cash rate. They have decided to leave this rate steady at 2.50% pa. The official rate has remained unchanged for 12 months now. We expect that most lenders will leave their rates unchanged, in line with the Reserve Bank’s decision.
Harvest’s Interest Rates
At Harvest, we have our own credit licence which means we are independent, and able to assist clients with home and investment loans. We have access to a panel of 30 different lenders which enables us to find the loan that best suits your needs.
We can also assist with the refinancing of an existing loan if your current home or investment loan rate is not competitive.
Australia’s Falling Rental Yields
Renting your property has become a lot less attractive over the past 12 months. Growing property prices and an increase in new developments have resulted in higher rates of vacant rental properties. This has caused increased competition among property owners to attract renters to their properties which in turn has resulted in yields falling by an average of 1.7% on home rentals and 2.8% on apartment rentals. For both homes and apartments, Sydney and Melbourne recorded the lowest rental yields. See the tables below for the changes in Australian capital cities.
Housing yields across Australia 2013 – 2014
Apartment yields across Australia 2013 – 2014
[fusion_old_table id=19 /] *note that the gross market yield = [math]frac{annual : rent}{market : value : of : property}[/math]Source: Australian Property Monitors
Sydney’s Fastest Growing Suburbs
Buyer demand has recently shifted away from traditional inner suburb growth hotspots to Sydney’s North-West and Western regions. House prices in these suburbs with good amenities, such as schools and public transport, have been growing at a faster rate than their inner suburb counterparts.
Many of these suburbs have experienced price growth of more than 30% over the last 12 months. The suburbs that have experienced the highest property price growth included Parramatta (37.2%), Marsfield (35.8%), Eastwood (35.7%) and Epping (35.7%). The growth in these areas has significantly exceeded the average Sydney price growth of 17%. The suburb of Eastwood now has a higher median house price than that of the premium suburb of Wahroonga.
Along with access to schools and public transport some other factors have also contributed to the high growth in value of these Sydney suburbs. Interest rates have remained consistently low, and there has been an increased amount of interest coming from international buyers looking to invest in Australian property.
Medial Growth Levels in Sydney House Prices
[fusion_old_table id=20 /] Source: DomainConsider Refinancing if Rate > 5.0%
If your current home or investment loan interest rate is more than 5.00% pa then it is worth considering a change. A 0.20% pa interest rate savings on a $500,000 loan is equivalent to an annual interest saving of $1,000.
When refinancing there are some costs of closing your existing loan facility and other costs in setting up a new loan facility. The set up costs include some government charges. Typically the total one off costs of transferring are in the range $600 to $950. However some lenders provide refinance rebates to customers of up to $1,250 to assist in meeting the one off costs of transferring.
What do I need to do?
Contact us to obtain a refinance quote. We will review your current loan arrangement and find a suitable new loan for you with a more competitive rate which will reduce your interest costs and monthly repayments.
[jbox vgradient=”#fdf2ea|#fdf2ea” shadow=”7″ jbox_css=”border:1px solid #f26522;” title=”General Advice Warning“]© 2014 Harvest Property Loans. This Newsletter has been prepared for Harvest’s clients. The information contained herein is current and up to date at the time it was prepared. Harvest Property Loans Pty Ltd, ABN 63 147 743 244, ACL 392 260. Harvest reserves the right to correct any errors or omissions. Any advice contained herein has been prepared without taking into account any individual or company objectives, financial situation or needs. As such, before acting on any information contained herein, a person or company should consider whether the information is appropriate for them, having regard to their objectives, financial situation and needs. Rates quoted are subject to change at any time.[/jbox]Click Here to download a PDF version of this newsletter.Click Here
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