More and more Australians are turning to property investment, new analysis has revealed.CoreLogic’s head of research, Eliza Owen, found that the number of investors entering the market was exceeding the number exiting, by comparing home loans data with listings data.“Investor inferred listings have been trending higher since March this year, to 13,000, but remain well below the peak of investor listings activity in November 2021,” Ms Owen said.“As investment listings remain below these highs, the number of new loan commitments remains high at 18,400. The previous five-year average for the month was 14,516.”Why is property investing so popular? Probably because it offers three big potential benefits:Capital growth – if your property rises in valueOngoing rental income – which can be used to pay down your mortgageTax benefits – you can reduce your taxable income if your property is negatively gearedReach out if you’re thinking about buying an investment property. I’ll model different repayment scenarios for you, so you can make an informed decision about whether investing is right for you.Need a home loan? Let’s chat.Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about New insights into property investment
Top 3 ways to finance your renovations
Are you considering renovating? If so, you’re not the only one, because renovations are incredibly popular, with homeowners investing $2.84 billion on alterations and additions in the June 2024 quarter, according to the Australian Bureau of Statistics. Typical costs range from about $2,000 to $5,000 for bedrooms, $15,000 to $30,000 for bathrooms and $25,000 to $50,000 for kitchens, according to JDL Constructions.Here are three ways to finance your renovations:Take out a construction loan. With a construction loan, the funds will be distributed in stages throughout the project, rather than in an upfront lump sum, and you’ll be charged interest only on the funds you’ve already received. Your construction loan will be interest-only during the building phase and will then revert to a standard principal-and-interest home loan once the building has been completed.Take out a personal loan. Compared to a construction loan, the application process is likely to be faster and your chance of approval is likely to be greater, but your interest rate is likely to be higher as well.Pay cash. This is the simplest option.If you’re thinking about paying for the renovations with a credit card, please be careful, because while you will not have to go through an application process, the interest rate will be extremely high and could leave you susceptible to falling into a debt trap.Want to renovate? Let’s discuss your optionsHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Top 3 ways to finance your renovations
One in five buyers are purchasing interstate
More home-hunters are looking to buy property in a different state – but why? In the year to August, 22% of all enquiries to buy property on realestate.com.au came from buyers based in a different state, compared to 17% in the previous 12-month period. Some people are looking to buy interstate for reasons of affordability. New South Wales, for example, which is the priciest state, recorded the highest share of local buyers making enquiries in other states and the lowest share of receiving enquiries from other states. Meanwhile, some investors are targeting out-of-state locations that seem to offer better returns. The prime example is Western Australia – where property prices have been booming – which experienced the biggest increase in interstate enquiry over the past year. Here are some due-diligence tips if you're thinking about buying interstate:Use data to research the suburbs where you're thinking about buyingOrder building and pest inspections of homes that seriously interest youConsider hiring a property manager to conduct property inspections for you or a buyer's agent to manage the entire process for youFinally, please contact me for a home loan pre-approval before you start your property search, so you can get certainty around your budget. Need a home loan? Let’s chat.Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about One in five buyers are purchasing interstate
Average loan sizes and how to pay it off faster
The average borrower is taking out a $636,209 home loan, with loan sizes ranging significantly in specific states, based on mortgage data from the Australian Bureau of Statistics. Check out the chart below for the figures: Regardless of whether your mortgage is higher or lower than these figures, you probably want to reduce your loan balance. Here are some tactics to help you achieve that goal: Switch from monthly to fortnightly repayments – this means you'll make the equivalent of 13 months of repayments each year Use your offset account or redraw facility (if you have them), to reduce your interest bill Refinance to a lower interest rate – there are really good deals available for borrowers who have at least 20% equity in their home All of those things really depend on your personal circumstances and financial position – so please get in touch if you want me to help you run some numbers. Need a home loan? Let’s chat.Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Average loan sizes and how to pay it off faster
Lenders competing strongly for borrowers
Lenders are competing strongly for borrowers, especially those with strong credit profiles. As a result, borrowing activity jumped 18.2% between January 2024 and August 2024, according to the most recent data from the Australian Bureau of Statistics.During that time, owner-occupier borrowing climbed 14.9%, while investor borrowing surged 23.7% and refinancing also increased, rising 1.2%. If you have an existing loan and have not had it reviewed in the past two years, there’s a good chance a better deal might exist, or if you are in the market to purchase, please get in touch to find out.I can help you:Compare loans from a diverse range of lendersMaximise your borrowing capacityChoose a strategy and loan structure that suits your personal circumstancesGet in touch if you need a home loanHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Lenders competing strongly for borrowers
Why ‘buy and hold’ can be a lucrative strategy
About 20% of home owners bought their property in the past five years, CoreLogic has estimated. The data shows that 2021 was the most common year in which homes were last purchased, with 5.3% of all homes being bought in that year. It makes perfect sense for people to buy and sell homes every few years, because as circumstances change, we may need to upgrade, downgrade or relocate. That said, if you are able to hold onto a property for the long-term, there can be enormous benefits. First, you can avoid the transaction costs associated with buying and selling. Second, you can potentially enjoy strong capital growth. CoreLogic reports that the nation's median property price has increased by 70.2% over the past 10 years, 157.9% over the past 20 years and 425.9% over the past 30 years. Depending on your financial circumstances, it might be possible to move without selling your existing home if you turned it into an investment property. While you’d then have two mortgages, some of that extra cost would be offset by the rent you’d start collecting. If you want a larger or newer home, another alternative would be to renovate instead of moving: potentially, you could finance the project by borrowing against the equity in your home. Need a home loan? Let’s chat. Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Why ‘buy and hold’ can be a lucrative strategy
Why 98% of borrowers are going variable right now
The vast majority of home loan customers are currently choosing variable-rate loans over fixed-rate loans.In August 2024, 98% of new loans were variable, while 2% were fixed, according to the most recent data from the Australian Bureau of Statistics.By comparison, in August 2021, when interest rates were at record-low levels, 46% of borrowers decided to fix, while 54% went variable.Interest rate expectations appear to be guiding borrowers' decisions.In 2021, when rates were at ultra-low levels due to the pandemic, most borrowers assumed they would rise sooner or later – so many chose to lock in those lower rates. Today, most borrowers assume rates have peaked, so they want a variable loan that will get cheaper if and when the Reserve Bank of Australia starts reducing the cash rate.Fixed vs variable:Fixed loans simplify budgeting, because your monthly repayments won’t change during the fixed periodAs a result, you won’t suffer when rates rise and won’t benefit when they fallVariable loans are unpredictable, because your repayments can change at any timeVariable rates go higher when rates rise and lower when they fall Want a competitive rate? Let's talkHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Why 98% of borrowers are going variable right now
Negative Gearing Explained: Understanding Your Property Investment
Negative gearing in property investments is a term that many people hear but may not fully understand. It happens when the costs of owning an investment property, like mortgage payments and maintenance, are higher than the income it generates. This means you are losing money on the property each year. However, many investors use negative gearing as a strategy to offset their taxable income. In this blog, we will explore what negative gearing is, how it works, and its potential benefits and risks for property investors. What is Negative Gearing in Property Investments? Negative gearing refers to the practice of borrowing money to invest in a rental property where the costs of owning the property, including mortgage repayments, maintenance, and other expenses, exceed the rental income generated by that property. In simpler terms, when a property is negatively geared, the investor incurs a net rental loss. This loss can often be used to offset other income, thereby lowering the taxable income, which leads to tax benefits that can be quite appealing for property investors. The mechanics of negative gearing are straightforward. An investor purchases a rental property using a home loan, and the associated costs—including interest repayments, property management fees, and maintenance expenses—outweigh the income received from rental payments. This net rental loss, or negative cash flow, can be claimed as a tax deduction. Thus, while the property itself may not be generating positive cash flow in the short term, the tax deductions can provide immediate financial relief by reducing the investor's overall tax bill. Difference Between Positive and Negative Gearing In contrast to negative gearing, positive gearing occurs when the rental income from a property exceeds the expenses associated with owning it. A positively geared property generates a net rental profit, which can lead to higher cash flow for the investor. Choosing between positive and negative gearing largely depends on an investor’s financial situation, investment goals, and risk tolerance. While negative gearing can provide immediate tax benefits, it may require a more substantial financial commitment and a longer-term investment strategy to realize capital gains. What Are the Benefits of Negative Gearing? One of the most significant advantages of negative gearing is the tax benefits that come with it. Investors can claim the rental expenses associated with their negatively geared properties as deductions against their taxable income. These deductions can include interest on the mortgage, property management fees, repairs, and maintenance costs, ultimately reducing the investor's income tax liability. For many Australian investors, this tax consideration is a compelling reason to engage in property investing, as it allows for a strategic approach to managing their tax bracket and overall financial responsibilities. Although negative gearing typically results in a net rental … [Read more...] about Negative Gearing Explained: Understanding Your Property Investment