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18-03-2017 10-52-06 AM

Interest only loans are becoming increasingly popular. ASIC data indicates that one in four owner-occupier loans in Australia is now interest only, and two out of three investment loans.

With an interest-only loan, the lender issues a standard mortgage but agrees to a term in which the borrower pays only the interest, which means monthly repayments are lower than a traditional principal and interest loan. Over the term of the interest-only loan, the loan principal is unchanged.

One of the main benefits of paying interest-only on a loan is that the repayments will be smaller. For home buyers, this is a brilliant opportunity to use these savings to pay down other higher interest loans before reverting your attention back to the home loan. For investors, the extra interest paid can have tax benefits i.e. interest can be claimed against income to reduce the taxable amount.

The most important thing to remember when choosing interest only is that the principal will not reduce. If your property does not increase in value, neither will your equity, and if your home decreases in value you could be left paying a mortgage that’s worth more than your property.

Additionally, you will pay more interest over the life of the loan, and you’ll eventually have to pay the principal. However, for your average home buyer an interest only loan can be a great short-term strategy.

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At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

Conditions in the global economy have continued to improve over recent months. Business and consumer confidence have both picked up. The Australian economy is continuing its transition following the end of the mining investment boom, expanding by around 2½ per cent in 2016. Exports have risen strongly and non-mining business investment has risen over the past year. Most measures of business and consumer confidence are at, or above, average. Consumption growth was stronger towards the end of the year, although growth in household income remains low.

The outlook continues to be supported by the low level of interest rates. Financial institutions remain in a good position to lend.

Conditions in the housing market vary considerably around the country. In some markets, conditions are strong and prices are rising briskly. In other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Growth in rents is the slowest for two decades. Borrowing for housing by investors has picked up over recent months. Supervisory measures have contributed to some strengthening of lending standards.

Story source: www.rba.gov.au

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PPG_Blog_Feb_image 4_choosing the right builder

If you’re in the market for a brand-new house or significant renovation, you should shop for your builder as carefully as you shop for your home. Here are some factors to consider to help you choose the right builder:

  • Competency – Can your builder meet your every need from the beginning of the building process until the very end? Is the builder surrounded by an efficient and professional team that can respond to your questions and needs in a timely manner? These questions are incredibly important and you need to be sure your chosen builder can expertly handle every step of construction from start to finish.
  • Reputation – Another important question to ask when determining how to choose a builder is whether or not the builder has a reputation for excellence in the community and the industry. Has the builder won any awards or received any good reviews among previous homeowners and within the industry? Is the builder a part of any nationally recognised organisations for home building? Can the builder show you recently completed properties? At a minimum, it is advisable that your builder is a current member of the industry’s peak body – the Master Builder’s Association (MBA).
  • Price – Of course price is a big factor and should be a major consideration, but not because it’s the highest or the lowest. When tendering for a project, look for the most detailed explanation of the price and also a consistency when comparing multiple quotes.
  • Trustworthiness – In general, building a new home is one of the biggest investments you will ever make. One of the most important steps in how to choose a builder is determining if they are trustworthy; you want someone you can trust to make the best possible decisions and work on your behalf. Your satisfaction should rank among the builder’s top priorities.

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Stress-free Moving

PPG_Blog_Feb_image 2_stress free moving

Most of us have moved home at some stage in our lives. And research shows that it can be extremely stressful, on par with divorce and bereavement for many people.

Being organised and as efficient as possible will go a long way in reducing anxiety and stress. Here are 5 top tips for a hassle-free move:

1. Budget – gain a clear understanding of the costs you will incur so you are not hit with any hidden surprises.

2. Create a checklist – if you know you cope poorly when pressured by time, try creating a schedule of tasks. Start as soon as you can and tick off jobs once they are completed.

3. Hire a professional removalist – When you are moving house you are placing all your worldly goods in the hands of your removal company, so make sure the company transporting your belongings is professional and experienced. Consider hiring professional packers too.

4. Treat yourself – if possible take breaks and allow some time to enjoy yourself and relax. Eat well and try to get ample sleep.

5. Survival kit – before moving day try packing a survival kit of essentials. This can contain items that will get you through the move day unscathed e.g. toiletries, phone chargers, bottles of water and snacks.

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PPG_Blog_feb_image 1_REIV seminar

Looking to buy a property in Melbourne for the first time but don’t know where to start? You’re not alone! And for that reason, The Real Estate Institute of Victoria (REIV) is holding a free homebuyer’s seminar on Wednesday 19 April.

The seminar is an exclusive opportunity to hear from expert property professionals on how to go about purchasing a home in the Melbourne market. Key topics to be covered include:

· A local market overview

· All things finance

· Understanding the contract of sale.

This is a fantastic occasion to gain a greater understanding of the process involved in finding the right home for you. There’s a lot to consider when buying real estate and it’s the biggest investment you are likely to make over your lifetime. When armed with the right information the process seems much easier and far less stressful.

The REIV seminar runs from 6-8pm on the 19th April and will be held at The State Library of Victoria, 328 Swanston Street, Melbourne. Seats are limited so to register to attend call 03 9205 6666 or go to www.reiv.com.au

The seminar is supported by Bendigo Bank and Parke Lawyers.

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At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

In Australia, the economy is continuing its transition following the end of the mining investment boom. GDP was weaker than expected in the September quarter, largely reflecting temporary factors. A return to reasonable growth is expected in the December quarter.

The Bank’s central scenario remains for economic growth to be around 3 per cent over the next couple of years. Growth will be boosted by further increases in resource exports and by the period of declining mining investment coming to an end. Consumption growth is expected to pick up from recent outcomes, but to remain moderate. Some further pick-up in non-mining business investment is also expected.

The outlook continues to be supported by the low level of interest rates.

Labour market indicators continue to be mixed and there is considerable variation in employment outcomes across the country. The unemployment rate has moved a little higher recently, but growth in full-time employment turned positive late in 2016. The forward-looking indicators point to continued expansion in employment over the period ahead.

Inflation remains quite low. The December quarter outcome was as expected, with both headline and underlying inflation of around 1½ per cent.

Conditions in the housing market vary considerably around the country. In some markets, conditions have strengthened further and prices are rising briskly. In other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Growth in rents is the slowest for a couple of decades. Borrowing for housing has picked up a little, with stronger demand by investors. With leverage increasing, supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments.

Story source: www.rba.gov.au/

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Less Stuff, Less Stress

PPG_Blog_Jan_image 2_Less Stuff Less Stress

It’s entirely understandable that as we progress through life we accumulate more possessions. But according to a study of Australian homes by the Australia Institute we are accumulating far too much, and to the detriment of our health.

The problem begins when we surround ourselves with stuff that we either don’t need or don’t use. The Australia Institute found that one in five people had built a shed or garage to store excess things, whilst one in eight had even moved house to accommodate their excess clutter. Crazy!

The study also discovered that “women feel more stressed, depressed and anxious when their home is cluttered. Being surrounded by excess items not only wastes your time as you search for things, but it also promotes the consumption of comfort foods, reduces sleep quality, limits creativity, and makes you more indecisive about which of your daily work or household tasks to carry out.” Sound familiar?

So as we enter the new year and resolve to make certain changes in our lives going forward, why not take a look around your home and see if you might need to ease your stress with a major declutter. You’ll feel the benefits instantly. For further inspiration check out The Minimalists. These guys are extreme but can offer great tips on how to reduce the amount of stuff we own.

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PPG_Blog_Jan_image 1_Home Buyer Delay

The Australian Bureau of Statistic has just released figures indicating Australians are entering the property market later than ever before.

The 2013-14 data, shows that less than 50% of Australians bought their first home between the ages of 25 and 34 years old. Back in 2000-01 that percentage was up over 60.

One of the more obvious downsides to buying later in life is the prospect of lingering mortgage repayments well into retirement. The proportion of households aged 65 and over still paying off their mortgage has more than doubled, having risen from 3.6% of all households aged 65 and over in 2000–01, to 8.2% in 2013–14.

Buying later can certainly be attributed to a booming Australian property market whereby many young Australians simply cannot afford to pay the impossibly high prices. There are ways to combat this growing trend though. Here are 5 ideas for first home buyers to consider:

1. Investigate all government grants and incentives – there are fewer options available than in the past but some help is still there to take advantage of

2. Look at a unit/apartment rather than a larger house – start small and work your way up over time

3. Ask a parent to guarantee your loan – that way you can borrow up to 95% of your loan without paying Lenders Mortgage Insurance

4. Formulate a strict savings plan – and stick to it! If you can manage to set aside $350 a month, within two years you’ll have saved $20,000!

5. Co-borrow – many first home buyers have shared the costs with a friend, partner or family member with great success. Exercise caution and always seek legal advice.

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housing affordability

The Real Estate Institute of Australia (REIA) says that in the September quarter of 2016, housing affordability in Australia declined marginally with the proportion of the median family income required to meet average monthly loan repayments increasing to 29.5% from 29.4% in the previous quarter.

REIA President Neville Sanders said, “The recent Adelaide Bank/REIA Housing Affordability Report shows that whilst the proportion of the median family income required to meet average monthly loan repayments increased by 0.1 percentage points, it is still at the lower end over the last seven years. Unfortunately, historically low interest rates were unable to offset the increasing size of mortgages resulting in the rise in the proportion of the median family income required to meet average monthly loan repayments.”

“Over the September quarter, affordability improved in Victoria, South Australia, the Northern Territory and the Australian Capital Territory. New South Wales remained the least affordable state or territory for home buyers. Tasmania had the smallest average loan size while the proportion of first home buyers on the owner-occupier market was the largest in Western Australia.”

“The September quarter brought good news for renters. The proportion of the median family income required to meet median rents decreased by 0.6 percentage points to 24.2% during the quarter and South Australia was the only jurisdiction where rental affordability worsened.”

“The Australian Bureau of Statistics has recently revised its housing finance survey with the changes affecting statistics on owner-occupied and investment housing, the number of first home buyers and housing loan outstanding to households. These changes affected our September quarter publication.”

“The revision downgraded the proportion of first home buyers in the total number of owner-occupier housing finance commitments. It is extremely disappointing that the revised figures show fewer first home buyers since 2012 than previously reported. First home buyer financial commitments are down to 13.1 per cent of total owner – occupied housing in September. This is the lowest figure since the ABS series was commenced in June 1991 and compares to an average of 18.5 per cent over the period. With the average loan sizes continuing to rise REIA is concerned that the proportion may fall even further in the coming quarters,” said Mr Sanders.

Story source: www.reia.asn.au

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PPG_Blog_Nov_image 4_ 2 mil is new 1 mil

The Melbourne property market is driving a national spike in $2million+ property prices.

Not that long ago, $1 million guaranteed the purchase of an exceptional family home – a property where you could settle in and expect to be comfortable for life, only looking to down size when the nest became empty.

Over the past 12 months until June, the national figure for the number of properties selling for greater than $2 million exceeds 11,000 according to figures released by Core Logic. And this is more than double the number from five years ago. Twenty years ago, there were just 236 $2 million + sales across Australia.

The breakdown between houses and units in the $2 million+ range shows 9,882 were house sales and 1,437 were units. The largest concentration, not surprisingly, was in Sydney and Melbourne. Australia’s other states and territories combined represent only one tenth of all $2 million+ house sales and a quarter of $2 million+ unit sales in the past year.

In the June 2016 quarter, the REIV has released figures showing that there were five Melbourne suburbs that recorded a median price of greater than $2 million*.

Core Logic’s Cameron Kusher says this data provides dramatic evidence that the cost of housing in Melbourne and Sydney is detaching itself from the rest of the country.

*This is based on 30+ sales. Other Melbourne suburbs also recorded medians of $2 million+, but these figures were based on fewer than 30 sales.

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