Low Aussie Dollar to Increase Australian Property Prices

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The Low Australian Dollar is Likely to Further Increase Australian Property Prices

The Australian dollar has now decreased to new lows against the US dollar, Great Britain Pound, Chinese Yuan and a host of other currencies. The Australian dollar has not been this low since the Global Financial Crisis (GFC) also know in some circles as Good For Chinese (GFC) because they kept buying when other were worries and held back.

What does the low Aussies dollar mean for Australian property prices?

Well, nothing is certain but it would appear that the low Australian dollar will further increase demand from overseas buyers for Australian property. The low Australian dollar makes our exports comparatively cheaper, it also makes our real estate comparatively cheaper for foreigners. Hey, who does not like a bargain.

Are there other factors at play that may impact on the property market?

Yes, there is lot going on that can influence the property market in Australia. For example:

• recent capital gains in the property markets on Sydney and Melbourne;
• the Government regulator (Australian Prudential Regulatory Authority – APRA) crack down on investment loans resulting in the major banks having differential pricing for investor loans and owner occupier loans;
• a crash in the Chinese stock market, economic contraction in the Chinese economy and devaluation of the Chinese currency;
• instability in the stock markets around the world;
• below trend growth in the Australian economy.

Some of these factors could contribute to the slowdown in the price gains in the Australian property market other may contribute to further increases in property prices.

Recent capital gains in Sydney and Melbourne property

The recent capital gains in Sydney and Melbourne can act in two ways.

1. encourage more investors into the market and raise prices expectations for buyers and sellers regardless of if they are investors or not; or
2. where prices rise to very high levels, they can impact on affordability where buyers simply cannot afford to purchase or fail to see value in such high prices.

Government crackdown on investor loans

The Government Banking Regulator’s crackdown on investment lending is likely to to reduce investor demand for properties in Australia. However, only if they borrowing to buy. Rich investors especially those who do not need to borrow will not be deterred by the changes to investment loans. If they are from overseas even if they do need to borrow to invest the low Aussie dollar has just made Australian property and any loan repayments a lot cheaper. This may mean that locals (especially investors) are at a competitive disadvantage (due to the low Australian dollar) to foreigners or people with foreign incomes.

Crash in the Chinese stock market and economic slowdown in the Chinese economy

This is likely to make Chinese investors shy away from stocks and head to asset classes that are considered as lower risk. Property and Australian property is seen as a safe asset class and it is likely that there will be more interest in Australian property from foreign Chinese investors and local permanent residents that have income and assets back in China.

Instability in the stock markets around the world

Similar to the issue of the Chinese stock market crash, the instability in stock markets around the world makes people wary to invest in these assets. Some stock market speculators will continue to play the market and perhaps even make more money if they know what they are doing. The average mom and pop investor is less likely to invest but will not necessarily opt to change to property investment.

Below trend growth in the Australian economy

There appears to be an overstatement about the economy. It is not going as great as it was during the mining boom but in the great scheme the situation is not bad. Had the economy been really in trouble the Reserve Bank of Australia would have cut interest rates and there would have been another response from the Government e.g. stimulus package. We did not see this happen infact the less than trend growth in the economy is likely to keep interest rates low and the property prices heading up.

Who are the winners?

Australian expatriates (Aussie Expats) who have foreign income and find that now Australian property is comparatively cheaper.
Foreign investors that due to the currency find that Australian property is “ON SALE” at discounted prices.

Aussie expat home loan

Are you an Australian expatriate? Aussie expats can still borrow to buy property in Australia. With a low Australian dollar now may be the right time to buy. Find out more about Aussie expat home loans.

Aussie expat mortgages

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Investment Loan Rate Increased? Investment Loan Review

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Has your investment loan interest rate increased? Don’t be ripped off, get an investment loan review

If your investment loan rate has recently increased or it has been a while since you had it reviewed you may want to get an investment loan review to check if there are any better options available.

What is going on with investment loans?

If you have been ignoring the chatter in the media about property prices and investment lending you may not be aware that the Government Banking Regulator (Australian Prudential Regulatory Authority or APRA) has been putting pressure on the banks to curb their investment lending if they have their investment loan books growth above 10%.
The offending banks and even some banks that were not above APRA’s 10% investment loan growth limit have responded in a number of ways:

1. Raising their investment loan interest rates including for existing variable rate investor loans;
2. Changing their borrowing power calculations to make it harder for property investors to qualify for a loan;
3. Limiting investment loan to value ratios to lower levels; and
4. Decreasing their interest rates for owner occupied loans to encourage more owner occupier borrowers and even out their loan books.

Not all offending banks are doing all of the above.

Are there still good investment loan interest rates available?

Yes,there are still good investment loan interest rates available! Not all lenders have exceeded APRA’s 10% investment loan growth limit and some lenders are still actively competing to get your investment loan. These other lenders are still offering competitive investment property interest rate, fee and feature packages.
As property investors we know how important it is to have a competitive interest rate on your investment loan. If you are paying more interest than the rental income, negative gearing may make up some of the difference but even with negative gearing you are still paying money out of your own pocket. This can impact on your ability to make further investments and or your lifestyle. Lets face it no one want to pay more than they need to on their loan, least of all property investors who are investing to make money.

Are higher loan to value ratio investment loans still available?

Yes, higher loan to value ratio investment loans are still available! Some lenders are also still offering higher loan to value ratio loans 90% or up to 95% LVR exclusive of lenders mortgage insurance for investment properties.

Find out more about higher LVR investment loans

With the recent lending changes some banks have stopped offering higher loan to value ratio loans for property investors. Other lenders are still happy to lend at higher LVRs up to 90% or 95%.

High LVR investment loans

Investment loan review – Free

If your investment loan rate recently went up then you should get your investment loans reviewed by one of our finance professionals that understand investment loans. Oak Laurel has mortgage brokers that know which lenders have the good investment loan rates now. Or brokers can assist you to switch your investment loan portfolio to where there is a better loan package from another lender. If you have one investment property or many investment properties, our investment loans specialists will review your loan portfolio to identify if they can get you a better loan or loans. If you also have an owner occupied home loan(s) our finance professionals can check to see if there is something better available for that also.
We will not charge you for the review. If we cannot find any better options then there is no loss to you. However, you can be confident that you are not being ripped off. If we can find you better options then it could save you a lot of money.

Contact an Oak Laurel about an investment loan review!

Don’t delay act NOW!

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Construction Costs in Australia Decreasing

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Construction cost in Australia are among the most expensive in the world but are coming down according to an international report.

A report by Turner & Townsend a multinational professional services company ranked Sydney at 10th, Perth at 16th, Melbourne at 19th and Brisbane at 20th most expensive cities in the world for construction costs.
The study analysed 35 residential and commercial projects in different markets around the world and found that New York is the most expensive place to undertake construction activities.

Markets analysed and the report’s predicted construction market in next 12 months included:

Cooler	Staying the same	Warmer
Australia – Perth	Australia – Melbourne	Australia – Sydney
Brazil	Canada	Doha
China	Chile	Hong Kong
Kazakhstan	Germany	Ireland
Malaysia	India	Kenya
Russia	Japan	Netherlands
Singpore	Poland	UAE
Uganda	South Africa	UK – Central
–	South Korea	UK – London
–	Vietnam	UK – North
–	–	UK – Northern Ireland
–	–	UK – Scottland
–	–	UK – South
–	–	USA – Houston
–	–	USA – New York City
–	–	USA – Seattle

Construction market in Australia

According to Sourceable Senior economist Gary Emmett from Turner & Townsend said Australia is becoming a relatively cheaper place to build, due to low interest rates and a falling Australian dollar.

“The 2015 report shows that compared to 2011, it would cost overseas investors paying in US dollars 13 per cent less to construct buildings in Australia, which is a significant reduction,” he said.

Mr Emmett said that with the exception of Sydney’s apartment market, the cost of construction is stable and the outlook moderate for the medium term.
“Overall, it is a great time to build. Construction costs should remain fairly stable although some residential construction trades may become increasingly difficult to source, adding pressure to costs,” he said.
“Foreign investors are expected to seek more opportunities here to capitalise on the favourable conditions to build projects.”

Construction cost per square meter in Australian cities

The Turner & Townsend report estimated construction costs of detached houses, townhouses, low rise apartments and high rise apartments in the Australian cities Brisbane, Melbourne, Perth and Sydney.

Detached house construction costs per square meter in Australian cities

The construction cost of building a detached house is $1,600 per square metre in Melbourne, $1,650 in Brisbane and Perth, and $1,750 in Sydney.

Building a prestige detached house costs $2,700 per square metre in Melbourne, $2,850 in Sydney, and $3,000 in Brisbane and Perth.

Townhouse construction costs per square meter in Australian cities

Townhouses construction cost $1,700 per square metre in Brisbane, $1,750 in Melbourne, $1,850 in Perth and $1,900 in Sydney.

Low-rise building costs per square meter in Australian cities

Construction costs to build low-rise apartments are $1,800 per square metre in Brisbane, $1,900 in Perth, $1,960 in Melbourne and $2,100 in Sydney.

High-rise construction costs per square meter in Australian cities

High-rise apartments building cost $2,500 per square metre in Brisbane, $2,700 in Melbourne and Sydney, and $2,900 in Perth.

Borrowing to build your dream home or a small development project?

A construction loan may be a good choice for a single dwelling (house, townhouse or unit) or up to 4 dwellings (houses, townhouses or units on a single title - prior to subdivision) in a small property development. Find out about Construction loans here:

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SMSF loans will not be banned says assistant treasurer

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Self Managed Super Fund loans will not be banned but may face tougher regulation says assistant treasurer

Whilst speaking at the Tax Institute annual superannuation conference in Sydney on Friday 21 Aug 2015, Josh Frydenberg the assistant treasurer stated that the Government has no plans to ban SMSF loans, that is limited recourse borrowing arrangements (LRBAs) through SMSFs to purchase real estate according to Fairfax.
David Murray’s Financial System Inquiry, released in December 2014, warned that SMSF borrowing for property increased speculative investment which could pose a risk to the financial system over time and called for a ban on LRBAs,
“I want to emphasise that we have been considering this recommendation very carefully but flag that we want to make sure the approach we take is proportionate to the risks that have been identified,” Frydenberg said.
“To put it in context only 0.07%, perhaps 6,500 properties, were held in an SMSF through a limited recourse borrowing arrangement in 2013.
“David Murray highlighted the risks associated with increased leverage in the financial system. Increased leverage always represents a risk and we recognise that. The government also recognises that most SMSFs do the right thing.”
When asked whether there were any plans for increased regulation of SMSF loans – instead of completely prohibiting it – Fairfax reports that the assistant treasurer said it was “under consideration”.
This appears to be good news for those taking control of their Superannuation through SMSFs. Though clearly not for everyone, borrowing to investing in property through your SMSF remains an option. It is suggested that you seek advice from a qualified professional before making any investment choices though your self managed super fund. If you are considering borrowing to invest in your SMSF we can provide you with Limited Recourse Borrowing Arrangements for your SMSF.

Borrowing to purchase property in your Self Managed Super Fund?

Ask an Oak Laurel mortgage broker about your Self Managed Super Fund loan options.

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Is Melbourne overtaking Sydney as the hottest property market? Aug 2015

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Property price growth data shows that in the last Quarter, Melbourne property has out paced Sydney’s to become Australia’s hottest property market as at Aug 2015

Property price growth in Melbourne and Sydney

Latest property price data from PRData shows that in the last quarter Melbourne property price grew 7.85% out pacing Sydney price growth at 6.66%. Month on month price data also shows a similar trend, Melbourne price growth outpacing Sydney’s, overall and for houses. Though Sydney’s unit prices grew faster than Melbourne the difference was only 0.06% between the two or in practical terms they were the same.
In recent years Melbourne has shown some reasonable price growth but until the last quarter have been outpacing Melbourne’s by a large amount. With Sydney’s property prices now so high many believe that they are unaffordable. There have also been reports that property investors looking to buy in Sydney have been turned off by the high prices and are now turning to Melbourne where prices have been rising at steady pace. Now that Melbourne’s price growth appears to have overtaken Sydney’s investors chasing capital gains may also be more attracted to Melbourne.
Melbourne property has not had the attention from property investors that Sydney has had with a larger proportion of owner occupiers. However, if investors now find Sydney too expensive or decide to target Melbourne which has in the last quarter become the hottest property market, this may be the start of a flood of investors to Melbourne property.

Auction clearance rates in Melbourne and Sydney

Recent auction clearance rates show a similar trend to the property price growth in Melbourne and Sydney. Over previous five weeks Melbourne’s auction clearance rates have shown a steady building increase from 74% five week ago to 75%, 76% , 77% to 80%.  Sydney’s auction clearance rate though having 80% last week have showed a decreasing rate previously from 78% five weeks ago to 76%, 76%, 73% before last weeks jump back to 80%.

Is Melbourne a good place to invest in property?

Invest where people want to live, especially where people who have wealth want to live as this is the demand side of what drives up property prices. People want to live in Melbourne. Melbourne has been named the world’s most liveable city for the fifth year in a row, achieving a near perfect score on the Economist Intelligence Unit’s (EIU) liveability survey of 140 cities. Each year thousands more people move from NSW, mostly Sydney to Victoria, mostly Melbourne than go the other way. Melbourne has the greatest number of people immigrating to it than any other Australian city. The ABS forecasts that given current levels of migration and fertility rates, Melbourne will overtake Sydney as Australia’s biggest city by 2053.
It is not all Melbourne’s way though. Vacancy rates in Melbourne at 2.3% are however, slightly above that in Sydney at 1.8% as of July 2015, according to SQM research data. However, both cities have lower than the national average vacancy rate at 2.4%.
Latest data also shows that rental yields are also slightly lower in Melbourne than in Sydney.

Conclusion

This data does not mean that Sydney’s property prices will not continue to grow, there is every indication that the it will continue to grow into the future. The data does suggest that Melbourne is now the hottest property market and may catch up to Sydney over the coming years.
Only time will tell if Melbourne will continue to be Australia’s hottest property market!

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Good investment loans easy to find in Australia

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Whoever said that it was hard or expensive to get an investment loan must have been looking for one in their own navel. Many lenders are still actively competing for investors as they have not exceeded the Government Banking Regulator’s 10% investment lending growth ‘speed limit’.

Many lenders are still offering loans to investors at higher loan to value ratios and competitive interest rates. The major banks who have exceeded the Government Regulator’s investor growth limit are getting out of investment loans and some are now spruiking that the investment market is dead.  This smacks of If I can’t play I will close my eyes and shout that the property market over. But with so much demand for property in Australia’s two largest cities, Sydney and Melbourne, no one wants to hesitate only to have to pay thousands more for a comparable property next week. Anyone who has attended an Auction in Sydney or Melbourne recently knows that the demand is stronger than ever as are prices.

Here is the tip to getting a good investment loan. Don’t bother going into a bank branch. Don’t bother going to a mortgage broker that is owned by a bank. These places don’t give you a lot of choice even if you are not an investor. Go to an independently owned mortgage broker who has access to a wide range of lenders including non-bank lenders. You will find out that there is plenty on offer for property investors with competitive loan packages to boot. Find more info about what kinds of investment loans are still available here: investment loans

Now that the big banks are out of investment lending they have started talking down the property market prospects, it does not even matter that the data says the opposite. There may be an affordability issue in Sydney but the Melbourne market median house prices are around $200,000 cheaper than Sydney and are just starting to really take off. The most recent property price growth data shows that Melbourne has overtaking Sydney as the fastest price growth city and prices are growing even faster than before. The big banks may be disappointed that they can’t lend to investors in this growing market but this will just give the lesser known lender a chance to show off their investor loans expand their investor market share. These new Government Regulator measure are levelling the playing field for lenders and introducing more competition that is long overdue.


 By Dr Nigel Abery (PhD) 

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Australian property price gains remain strong – Aug 2015

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Australian property capital gains remain strong in Sydney and Melbourne – Aug 2015

Despite bubble talk from some media commentators the property price gains remain strong in Sydney and more so Melbourne – Aug 2015. If you were waiting for housing prices to drop in Sydney or Melbourne the latest data shows that it looks like you may have made the wrong decision. Demand for property in Australia’s largest and future largest cities remains strong. House price data from Corelogic PRData  monthly values – 31 July 2015 shows that “% Change Month on Month” unit prices were up by 3.23% in Sydney and up by 3.18% in Melbourne. Furthermore, house prices were up 3.32% in Sydney and up 5.12% in Melbourne, month on month. Rather than being dampened, surprisingly the data shows that property price gains in Sydney and more so Melbourne appear to be gaining speed. Melbourne price growth looks to be starting to catch up with Sydney’s.
Auction clearance rates over the last week (25 Jul – 1 Aug 2015) in Australia’s two largest cities show a similar picture with both Sydney and Melbourne having clearance rates at 79% according to the APM Market Reports on Real Estate listing site domain.com.au.

What about the changes some banks have made reducing maximum loan to value ratios for investors?

The changes in bank lending for investors does not appear to have had a dampening impact on property prices. There are still lenders that are providing 95% LVR investment loans and competitive interest rate, fees and feature packages. Furthermore, if you have equity from the already owned property price gains then you probably don’t need a higher LVR.

What about the interest rate rises for investors that some banks have made?

So far the interest rate rises that have been made by some banks have been modest. Investors must find the increase in interest rate insignificant compared to the capital gains that are being seen in Sydney and Melbourne. I wonder how much interest rates need to rise by before the current rate of capital gains becomes unattractive? Furthermore, there are still lenders out there that are under the Government Banking Regulator’s (the Australian Prudential Regulatory Authority – APRA) ‘magic number’ of 10% maximum allowed growth in investment lending and are more than happy to lend to investors. Investors can still get interest only investment loans in the low four percent range and even when borrowing over $1million. Note, you will need to meet the lender’s eligibility criteria. This information is correct at time of writing, the market is in a constant state of change. Check with us if in doubt.

What is the major limitation on borrowing now?

As previously mentioned the big losers from the new bank measures are first home buyers that want to enter the property market by buying an investment property. If you are a First home buyer looking to enter the property market as an investor to take advantage of the rent and negative gearing to help with the payments you may be interest in a guarantor home loan.
If you already own well located property in Sydney or Melbourne that was purchased some time ago you probably have access to some equity in your property. This equity can be used for a deposit on an investment property.
The major limitation on borrowing is then your borrowing capacity. The Government Regulator crackdown also included getting some banks to tighten up their borrowing capacity calculators and policy to make it more difficult to demonstrate your ability to make repayments if interest rates rise. The some banks have now changed how they consider rental income, living allowance and other some aspects in considering your ability to repay a loan. Want to maximise your borrowing power? Ask you what you can do and how you can do it, when you enquire with one of our mortgage brokers for a mortgage.

What is the solution for investors looking to borrow?

Looking to borrow to invest in the Sydney, Melbourne or other property markets? Ask one of our mortgage brokers about getting an investment loan with flexible borrowing capacity requirements, access to higher LVRs and competitive interest rate, fee and feature package. Note: this information is correct at time of writing, the market is in a constant state of change. Check with us if in doubt.
Contact one of our local mortgage brokers to go through your options.
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Home construction loans: how do construction loans work

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Construction loans

Building your dream home can be an exciting experience. Taking an idea and turning it into reality can be a rewarding experience if done right. When you build your own home you can decide how you want it to be.
It is not always trouble free. Constructing a home can be a long and expensive process and there are many possibilities that things can go wrong.
If you are borrowing money for the construction of the home then the lender is also taking on the risk that something will go wrong. The major risk is what the finish building will be worth. Some of the other risks include the quality of the builder. If the builder does not finish the building it can be very difficult to sell an unfinished home without providing a significant discount on the price. Even if the builder does finish the home, if the quality of the finished home is poor then the value may be less than expected.
Lenders don’t like taking on a lot of risk and will put in measures / requirement to reduce this risk. In the case of lending to build a home some lenders offer home construction loans, with all their strict criteria, specifically for this purpose.
Typically, a qualified and licenced builder must be engaged. Furthermore, the lender will want you to have a fixed price contract (not a cost plus) with the builder so the lender knows exactly how much it will cost to finish the building. Owner builder construction loans are available but generally only for builders who are building their own property. This means that you may have an especially hard time finding an institution to finance your project if you are intending to be an owner builder.
Having a fixed price with a licenced builder is only one of the many requirements of getting a construction loan.
Did you know that some lenders will allow you to use a construction loan for a three or even four units/townhouses development? If you are undertaking a small development contact us to go through your options.

Find out more about construction loans

Find out about the requirements and process of getting and using a construction loan. Everything you need to know.

Construction loans

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95% Investment property loans; 90% LVR Investment loans

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95% Investment property loans; 90% LVR Investment loans: What is the maximum loan to value ratio for investment property loans – July 2015

NOTE: Bank policy is now in a state of change this information is only valid at the time of writing 29 July 2015.
Bank policy has been changing recently. Some banks have stopped lending to investors. Others banks have reduced their loan to value ratios available on investment property lending and or increased their interest rates for investment property lending. There has also been changes to the serviceability calculators used by banks and lenders that reduce borrowing power in many cases.
We have been getting inquiries from property investors asking:
“Is it still possible to get investment property loans at 90% loan to value ratios (LVR / LTV)?”;
“Can I get an investment property loan with 10 percent down?”
“I have bought ‘off the plan’ can I still get a higher loan to value ratio investment loan?”
“What is the maximum investment property loan to value ratio available now”
“Will I need to pay much higher rates on an investment property loan now?”
Whilst many lenders have changed their policies other lenders have not, well at least not yet.

Is it still possible to get investment property loans at 90% loan to value ratios (LVR / LTV)?

It is still possible to get investment property loans to 90% loan to value ratio (LVRs) from some lenders. However, the number of lenders offering 90% loan to value ratio investment property loans are much less than before.

Is it still possible to get 95% investment property loans?

Yes, it is still possible to get investment property loans at 95% of the property value (LVR). However, because bank policy is changing rapidly it is advisable that you contact us immediately before this situation changes.  Contact us now for a 95% Investment property loan!

What is the maximum investment property loan to value ratio available now?

The maximum investment property loan to value ratio available is currently 95% LVR. Many lenders have stopped offering 95% loan to value investment property loans but some lenders are still offering these high LVR loans for investors. This lenders are generally not deposit taking institutions that are regulated by APRA. Instead they are regulated by ASIC. However, it is likely that in the near future ASIC may pressure these lenders to also reduce investment lending and they will also introduce policies similar to those of the major banks. Contact us now for up to a 95% Investment property loan!

Can investors still get competitive interest rates for investment property loans?

Yes, investors can still competitive interest rates from some lenders it is advisable that you get your investment property loan approved as soon as possible to avoid a nasty surprise when shopping for low interest rates for investment property lending.

I have bought ‘off the plan’ can I still get a higher loan to value ratio investment loan?

If you have bought off the plan and you are settling within the next few months you may want to contact us to check what options you have. Some lenders have longer periods where they will honor a loan approval before settlement. Contact us now for a high LVR investment property loan!

Why use Oak Laurel mortgage brokers for your investment property loan?

Oak Laurel mortgage brokers have access to a wide range of lenders and wide range of loans. Some mortgage brokers only have access to a smaller number of lenders and loans this can restrict your ability to access those lenders that have policies that suit your needs, including if you are property investor. This includes those lenders that currently still offer high loan to value ratios for investment properties.

Contact an Oak Laurel mortgage broker

Don’t delay act NOW!

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New investment property loan rules: who are the losers

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First home buyers buying an investment property will be big losers from bank policy changes

First home buyers buying an investment property for the benefits of rental income and negative gearing will be big losers from the new lending requirements

Why would first home buyers buy an investment property?

With prices already high in Sydney, which first home buyer can afford to purchase an owner occupied home to live in? Super rich? People who want to spend most of their income repaying their mortgage? As a first home buyer, regardless of if you are buying in Sydney or another place, it can make sense to buy a first home as an investment property. The rent helps to make the mortgage payments and negative gearing helps out at the start when there is a shortfall between the rent and the mortgage interest.

What makes it harder for FHB to borrow for an Investment property now?

With lending policies making it harder to get higher loan to value ratio loans for investment properties, now first home buyers buying an investment property must somehow find additional savings to put towards the deposit. However, in rising markets like Sydney and Melbourne, property prices are rising faster than many first home buyers can save for the deposit especially when a larger deposit is required.

So what is the answer for first home buyers taking out an investment property loan?

If the first home buyer has family that want to help and the family member has equity in their property a guarantor home loan may be a good option.
Find out about Guarantor home loans here:
Guarantor home loan

Others can still access higher loan to value ratio loans for investment properties.

Don’t have family that can help you out? Maybe you are not even a first home buyer?
Some lenders are still lending at higher loan to value ratios for investment property loans. The many banks may have cowered to the pressure of the APRA but other non-bank lenders are not regulated by APRA and are operating as usual for investors.
It will be these non-bank lenders that will benefit from APRA’s crackdown as investors seek new ways to invest with leverage.
Need a hand to sort through the maze of lenders and their ever complicated lending policies?
Oak Laurel has mortgage brokers many of Australia’s major cities (Sydney, Melbourne, Brisbane, Adelaide, Perth and more). Contact an Oak Laurel mortgage broker near you to find out what your borrowing options are in the new lending environment.
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Will these new bank rules stop price rises in the housing market?

No, this is not the prick that bursts a bubble. There is still plenty of demand for property in Australia both from locals and foreign investors. Property investors borrowing to buy property may get a little spooked when they walk into their local bank branch and get told ‘no’. However, smart investors will go to a good mortgage broker, like Oak Laurel, and find out that there are still lending options available.
The rules are not designed to stop gains in the property market. In fact they are in effect designed to keep the property market going strong. The measures are designed to ensure that major banks are not too heavily secured by investor loans. It will really give the non-bank lenders who are not regulated by APRA a selling point and introduce a bit more competition into the investment property loan market and home loan market more generally.

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Banks reducing borrowing capacity of property investor customers May 2015

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Banks are now reducing borrowing capacity of property investors, May 2015

Recent changes in loan assessment policies by several banks has reduced clients maximum borrowing capacity. This has been done by making their loan assessment criteria tougher when assessing customers ability to repay loans.
This is especially true for borrowing for investment properties or when using income from investment properties in calculations on the client’s ability to repay loans. Other changes include removing negative gearing allowances, limiting loan to value ratios to 80% for investment loans and removing discretionary interest rate discounts for investment loans. With different banks choosing different measures (out of those listed above) to make their borrowing power more conservative.

Why are the banks changing their policies to reduce borrowing capacity, particularly for property investors?

These recent changes are in response to the pressure that the Australian Prudential Regulation Authority (APRA)  has been asserting on banks and lenders in response to the growth in particularly investment property loans for speculative real estate purchases (i.e. Sydney).
These new changes come after APRA warned banks about the importance of vigilant credit assessments, after the outcomes of a hypothetical borrower survey were “a little disconcerting in places”. When using the assessments used by lenders when determining how much people could borrow under different hypothetical borrower scenarios, APRA found large differences in the maximum borrowing capacity between lenders. With the largest assessed maximum borrowing amount from a lender being in the order of 50% more than the most conservative lender. ARPA stated that one significant factor behind differences in borrowing capacity, particularly for owner occupiers, was how lenders measured the borrower’s living expenses.  Another area of interest were the differences in the treatment of interest only loans in the hypothetical test, which included one borrower seeking a 30-year loan, with the first 5 years on an interest-only basis.
These blanket measures for property investors appear to be rather un-targeted given that the concern of an overvalued property market is restricted to Sydney and the new tighter measures apply regardless where the property is being purchased.
Limiting lending in certain postcodes is a target approach that has been used by lenders to limit bank exposure. It is unclear why lenders have not taken a more targeted approach of limiting lending or applying tighter lending measures by postcode now.

Are you still interested in borrowing to invest in Australia’s property market?

Some lenders still provide reasonable borrowing capacity for property investors. Find out more about investment property loans here:
Investment property loans

Or contact a mortgage brokers near you to go through your finance options:
Mortgage brokers in Adelaide

Mortgage brokers in Brisbane

Mortgage brokers in Canberra

Mortgage brokers in Melbourne

Mortgage brokers in Perth

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Today 5 May 2015 the Reserve Bank of Australia cut the interest rate to 2%

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Today 5 May 2015 the Reserve Bank of Australia cut the interest rates to 2%

The Reserve Bank of Australia (RBA) met today to consider monetary policy and decided to cut interest rates by 0.25% to 2.00% effective from 6 May 2015.
In making the decision to cut interest rates, the Reserve Bank of Australia Board consider a range of economic factors including inflation, employment, commodity prices and Australia’s terms of trade, weakness in business capital expenditure in both the mining and non-mining sectors, subdued public (Government) spending, the exchange rate, the price of equities, growth in lending to the housing market, dwelling prices including Sydney price rises and prices in other cities.
The statement by the RBA board decided that the interest rate be cut but 0.25% to 2% and conculded that:

At today’s meeting, the Board judged that the inflation outlook provided the opportunity for monetary policy to be eased further, so as to reinforce recent encouraging trends in household demand.Glenn Stevens, Governor, Reserve Bank of Australia

As intended the rate cut will stimulate demand for credit including home loans, investment property loans and business finance.
This latest interest rate cut combined with the previous interest rate cut in Feb 2015, though widely expected, is likely to further stimulate interest in the property market from first home buyers and property investors alike and further push up property prices in selected markets.

Are you interested in purchasing an investment property?

Find out more information about investment property loans.
Investment property loans

Or if you want to discuss your home loan or investment property loan options with a mortgage broker contact us:
Mortgage brokers in Adelaide

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Mortgage brokers in Canberra

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Chinese now Australia’s biggest foreign property investors

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Chinese now the largest foreign buyers of Australian real estate

Chinese are now Australia’s largest foreign property buyers, pushing the USA out of 1st place according to the Foreign Investment Review Board (FIRB).
Foreign Chinese property investors spent $12.4 billion on Australian property in 2013-14 up from 2012-13 when foreign Chinese spent $5.9 billion on Australian real estate according to the FIRB.
China’s total approved investment in Australia last financial year was $27.7 billion, while the US were approved to invest $17.5 billion. Canada is Australia’s third largest foreign investor with $15.4 billion of investment whilst Malaysia was the forth largest with $7.2 billion of investment.
The foreign property buyers focused on new dwellings, spending $16.4 billion on off the plan apartments up from $5.7 billion.
The foreign spend on existing homes jumped almost $2 billion to $7.17 billion last financial year.
Investment in commercial real estate also increased from $34.8 billion to $39.9 billion.
Investments in real estate accounted for almost half China’s total Australian investment, with its $12.4 billion approved investment more than twice the amount of the Americans on real estate.
The FIRB figures tally approved investment rather than actual investment.

Melbourne in Victoria, Australia is a hotspot for foreign property buyers

Melbourne has become a hotspot for foreign investment. Foreign investment in Australian residential property doubled in the last financial year and with most investment occurring in Victoria.
Victoria saw more than 10,000 approvals granted to foreign investors, according to the Foreign Investment Review Board annual report.
Interest from overseas buyers is creating price growth in some segments of Australia’s real estate market.
Glen Waverley, Mt Waverley and other suburbs in the Monash City Council area, such as Notting Hill in Melbourne are hot spots for Chinese buyers, ranking as the most popular suburbs in Australia on a Chinese property portal. The Monash area is also a very popular area with local Chinese which make up the majority of the market.
More generally, Melbourne is rated as one of the world’s top cities for Chinese buyers, according to a luxury real estate website and was the only Australian city to make the top 20 global destinations searched by Chinese buyers on propgoluxury.com
Are you looking to invest in property? Find out about investment property loans here:
Investment property loans
Or you can contact one of our mortgage brokers to assist you with your finance.
Mortgage brokers in Adelaide

Mortgage brokers in Brisbane

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Mortgage brokers in Melbourne

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Mortgage brokers in Sydney

Are you a Chinese property investor, looking for a home loan and want to speak to a Chinese home loan broker?

If you are Chinese and need assistance, we have Chinese home loan brokers that can help you. Our Chinese home loan brokers can assess and compare home loan options for you so that that you don’t pay too much.
If you are a Chinese property investor, we can help you to find home loans that suit property investment and structure your investment home loans correctly to save you money and increase your flexibility. Ask us about home loans for Chinese property investors.
Contact us here:
Chinese mortgage brokers

你是一个正在寻找房屋贷款经纪人的中国房地产的投资者吗？

如果你是中国人和需要帮助，我们这里有来自中国的房屋贷款经纪人可以帮助你。我们的中国房屋贷款经纪人可以评估你的实际情况和帮你比较住房贷款的种类，这样你就不会多付不必要的资金.

如果你是一个中国房地产的投资者，我们可以帮你找到适合房地产投资的贷款, 我们也可以帮你设计正确的投资购房贷款来节省您的资金和增加你的资金自由性。向我们询问中国的房地产投资者的购房贷款细节。

在这里联系我们：

贷款经纪人

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Chinese property investors predicted to invest billions more in Australian real estate 2015

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Chinese buyers are forecast to invest $ billions in Australian property 2015

Chinese property investment in Australia estimated to reach AUD $44 billion over the next seven years

A report by global investment bank Credit Suisse predicts that Chinese nationals will continue to invest in Australian real estate. It is estimated that Chinese investment in Australia property will be approx AUD$44 billion over the next seven (7) years.

When forecasting expected Chinese residential property investment, the analysis combined information from the Foreign Investment Review Board, Department of Immigration and Bureau of Statistics . The bank’s conservative estimate is that Chinese will invest $5 billion per annum into the future.

The Credit Suisse analysis estimated that newly arrived Australian immigrants and foreign Chinese investors have already spent about $24 billion on Australian property over the past seven years. Foreigners (including Foreign Chinese) are required to purchase new properties, taking this into account the report estimates that about 12% of all new properties in Australia are purchased by foreign Chinese buyers.

Where are Chinese property investors buying property?

The  report suggests that the majority of Chinese property buying is occurring in Australia’s two largest cities, Sydney and Melbourne. Within Sydney and Melbourne certain suburbs are Chinese buyer hotspots such as in and around Glen Waverley in Melbourne. It is estimated that 18 per cent of all new properties in Sydney and 14 per cent in Melbourne are being purchased by foreign Chinese nationals. The amount of new property bought by foreign Chinese in other Australian cities was estimated at a much lower level (7%).

Is Chinese investors buying in Australia good for other Australian property investors and homeowners

The continued demand from Chinese property investors for Australian property is good news for homeowners, property investors and property developers as demand for Australian property, particularly new property is set to remain strong and result in sustained capital gains. However, on the contrary, this may be bad news for those yet to enter the Australian property market as prices are likely to rise quicker than many can save for a deposit.
Are you a first home buyer and want to enter the property market with a low deposit or no deposit? If you have family that would like to help you and who already own property that has increased in value since they bought it, you may also be able to get a guarantor home loan without having a deposit. Low deposit home loans are available where you can borrow up to 95% of the property value without a guarantor.
Guarantor home loans

Are you a property investor or about to buy your first investment property? With the already high demand for Australian property (as a result of population grow) increasing due to foreign demand you may want to invest in Australia property. Find out more about borrowing to invest in property.
Investment property loans

Are you Chinese, looking for a home loan and want to speak to a Chinese mortgage broker?

If you are Chinese and need assistance from a Chinese mortgage broker, we have Chinese mortgage brokers that can help you. Our Chinese mortgage brokers can assess and compare home loan options for you so that that you don’t pay too much. If you are a Chinese property investor, our Chinese mortgage brokers can help you to find home loans that suit property investment and structure your investment home loans correctly to save you money and increase your flexibility. Ask us about home loans for Chinese property investors and consult with a Chinese mortgage broker.

Chinese mortgage brokers

中国的抵押贷款经纪人



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