Connect with us

Market Place

Property sellers bring plans forward to beat APRA changes on home borrowing

Property sellers

Some Property sellers have brought forward their listings in hopes of getting the best price before new mortgage rules kick in and reduce the budgets of potential buyers, agents say.

Potential home buyers who are hoping to borrow the maximum amount are also rushing to get in before the cut-off at the end of October, although some will be disappointed as a few banks have already become more cautious about how much they will lend, and investors with multiple properties are already having to reduce their budgets for their next purchase.

Property buyers will be assessed to ensure they could repay their loans should interest rates rise 3 percentage points, up from 2.5 per cent previously, under recently announced rules by bank regulator the Australian Prudential Regulation Authority that are likely to cut buyers’ maximum borrowing capacity by about 5 per cent.

But with only 8 per cent of applicants borrowing their maximum, on Commonwealth Bank figures, most buyers are unaffected, meaning property prices are likely to keep pushing higher, albeit not at the same pace.

“It’s very much on the top of sellers’ minds to try to get a deal together before the market could be impacted,” The Agency Epping’s Catherine Murphy said.

Last time APRA made it harder to get a home loan, the decision preceded the financial services royal commission that threw bank lending practices into the spotlight, as well as the uncertainty of the federal election, and property prices fell.

Ms Murphy does not expect as much of an impact as last time, tipping prices to keep rising but at a more modest pace.

“If you know buyers, instead of being able to spend $2.5 million, they can only afford to be spending $2.1 million, that counts that buyer out of the game,” she said. “The more buyers you have, the more you end up selling for.”

Adrian William principal Adrian Tsavalas has seen some sellers keen to list sooner to take advantage of the unchanged borrowing capacities in the market now.

“There have been a couple of sellers who were on the fence about listing this year or next year,” he said.

“With the change in regulations and the possible change in borrowing capacity on the cards we’ve seen a number of sellers elect to list and sell this side of Christmas, just in case this has an impact on the market.

“It could possibly ease [price] growth but I don’t think it’s going to cause the market to retract.”

Foster Ramsay Finance principal mortgage broker Chris Foster-Ramsay has seen some buyers aiming to get a pre-approval quickly if they hope to borrow the maximum to stay in their preferred location, perhaps near family or the children’s school.

Some banks are still allowing new buyers, or those renewing pre-approvals, to borrow the maximum under the old rules before November 1, when the new rules kick in. Borrowers have 90 days to use their pre-approval before it expires, meaning buyers will be in the market with larger maximum budgets until the end of January.

Others such as Commonwealth Bank and Bankwest have already changed to the new rules, he said.

“Everything seems to be premium price and premium demand,” he said. “Agents foresee that happening right through until early next year when these changes kick in.”

Shore Financial chief executive Theo Chambers has been fielding questions from pre-approved clients asking how the change affects them and thinking they might need to buy sooner rather than later.

“People that were procrastinating about it are now feeling like they need to get moving,” he said.

“It’s almost a bit too late for those people because some of the banks will apply the change regardless of whether you’re already approved.”

Banks are also making their own changes, such as being more cautious about how much debt borrowers can take on relative to incomes, to reassure the regulator, he said.

Keen investors with multiple properties had been affected, although not dramatically yet, and were hoping to get in before the changes, Mint Equity director and finance broker Zac Peteh said.

One client already had a $900,000 budget reduced to $850,000, he said.

“The strategy that some of the investors had of waiting for the market to return, in terms of stock levels … there’s a little bit of a push with the investors to try and get something done now, rather than waiting until early next year,” he said.

Ray White chief economist Nerida Conisbee said the APRA changes were likely to affect real estate sentiment far more than how much buyers could or couldn’t borrow.

“For the majority of people it doesn’t make much difference and it won’t hit all parts of the market. It’s a pretty light touch overall and will make a minimal impact,” she said.

“I do think that deadline will see prices calm a bit though if only because the APRA changes are signalling that they are watching, they are not going to let it get out of control, and there will be a limit.”

Melbourne buyer’s advocate Wendy Chamberlain has not yet seen any impact on her clients, but expects that soon buyers may not be able to borrow as much money and will look at homes at a lower price point.

“I don’t’ know if it’s going to take the wind out of the market,” she said. “If you can’t afford to buy that house you’ll just drop into a lower price bracket.

“[Also,] the bank of mum and dad aren’t going to be affected by the APRA changes, are they.”

Ray White NSW chief auctioneer Alex Pattaro has not seen any impact on buyers from the announcement, with confidence at auctions still high.

“People are more keen to secure a home and get in simply because of the property prices rather than because of APRA,” he said.

“People are prepared to pay over for a property when there’s competition on auction day.”

Davidson Property Advocates’ Tonya Davidson has not seen the change directly affect her clients yet but is anticipating a flow-on effect.

“It’s been a topic of discussion and I think what that really relates to is perhaps a small shift in market sentiment,” she said.

“There’s a number of properties that have had price adjustments. I had an auction on Saturday [in which] I was the only bidder.

“A little bit of the shine has come off.”

 

Article Source: www.domain.com.au

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Gold Coast

How prestige buyers shaped the Gold Coast’s record-breaking property boom

Two years ago, prestige property prices across the Gold Coast were all but becalmed on a stagnant sea that left luxury mansions sitting like flotsam and jetsam in the listings following a decade of static growth.

But just when it felt like the city’s gleam could fade, the perfect storm of COVID-19 and low interest rates propelled luxury home prices to unprecedented heights to cement a year of record-breaking growth that saw Surfers Paradise and Southport named two of the country’s top-selling suburbs.

Fuelled by a mammoth sea-change trend, home prices in primely positioned pockets across the ‘’glitter strip” rose by up to 44 per cent and shot 11 suburbs into the million-dollar-median club – a club that consisted of just Mermaid Beach and Surfers Paradise 12 months earlier.

The figures, lifted from Domain’s September House Price Report for 2021, revealed buyers converged on the luxury property sector like moths to a flame with Miami house prices shooting beyond 44 per cent to $1.205 million in a year and Mermaid Waters house prices rising by 41.9 per cent to $1.22 million.

Gold Coast

The pandemic created perfect conditions for the Gold Coast prestige market to experience high levels of growth. Photo: Supplied

In neighbouring Mermaid Beach, a colossal 32.4 per cent hike sent house prices to a historic $2.075 million.

But while the voracious growth decimated stock levels and burst the seaside dream for thousands of buyers hoping to bag a bargain by the beach, Ray White Surfers Paradise Group CEO Andrew Bell said after almost 24 months of price hikes the fever was breaking.

“Twenty months ago, you couldn’t have imagined the prices we’d achieve. This is the greatest boom in the history of the country … and the last thing I can remember that was close to this was 1988 and ’99 after the stock market crashed,” Bell said.

“People pulled their money out of shares and ploughed it back into real estate but it was short-lived. This boom is even stronger.

“The difference now is the cheap money. People are more cavalier with it and it’s so affordable.

“But all markets, whether it’s gold or oil, go through cycles and property is so aligned to the economic cycle. So, we were due for a boom … and if you follow the cycles, two years of a boom market is about as long as they last.

Gold Coast

The property boom in the Gold Coast has been one of the highest in years. Photo: Supplied

“Now there are signals out there showing the brakes are being applied whether that’s the regulations into borrowing [announced on November 1], chats about interest rates rising and then affordability being tested. You get half a dozen of those things like this and it’s like putting an anchor out.”

While the anchor might have been dropped, the city moved up the search rankings to top place for overseas buyers, according to PropTrack’s Overseas Search Data Report released last month, with units in Surfers Paradise topping the national list for sales value, according to figures found in the Domain House Price Report.

The mass return of expats could also see the anchor lifted in early next year, with the city’s annual auction – called The Event – tipped to be the best yet for the Ray White Surfers Paradise Group when it kicks off on January 23 at RACV Royal Pines Resort in Benowa.

Looking back over the past year, prestige property specialist Michael Kollosche, of real estate agency Kollosche, said the depth of the market was astonishing and had resulted in the firm collecting just over $230 million in unconditional sales in October alone.

The team also achieved a handful of jaw-dropping sales such as 159 Hedges Avenue, Mermaid Beach, which recently fetched $15.75 million.

“There have been a lot of sales in that $10 to $16 million range this year and a large portion of them were to locals with a few coming out of Sydney and Melbourne,” Kollosche said.

“I sold a block of land alone [900 square metres] at 139-141 Hedges Avenue for $17.5 million [in August].

Gold Coast

With the Olympics being hosted in nearby Brisbane, the market for the Gold Coast is set to continue its upward trajectory. Photo: Supplied

“I think the market will remain reasonably stable over the next 12 months because the Gold Coast is well-positioned with the [Brisbane 2032 Olympics] and there’s a lot of infrastructure spending.”

For the team at Amir Prestige Property Agents, the year was equally fruitful, after principal and director Amir Mian collected a suburb-record-smashing $23.75 million for the spectacular 5 McMillan Court, Southport, in March this year.

The sale came hot on the heels of yet another record-breaking sale for the firm at 187-191 Hedges Avenue, which achieved $22.5 million in the latter half of last year.

“The Gold Coast is poised for a pretty good decade between now and the Olympics … and I think it’s to do with the number of buyers who want clean air, a nice environment and a nice back yard,” Mian said.

“A highlight sale for us was 41-45 The Promenade, Isle of Capri, which sold for $26.998 million … all our top sales were pretty much suburb record-breakers … and people are more than just getting caught in the Gold Coast movement – they are putting their kids in the school here, and they are changing their jobs to live here.”

Top three Gold Coast homes on the market:

2585 Gracemere Circuit, Hope Island

Versace-inspired seven-bedroom, seven-bathroom mansion on a sprawling 5371-square-metre block with river and hinterland views.

Additional features include a swimming pool, spa and a king-sized pontoon.

Claire Dai from Kollosche is selling the home with a guide of $16.8 million.

Gold Coast

2585 Gracemere Circuit, Hope Island QLD 4212

5681 Anchorage Terrace, Sanctuary Cove

Meticulous six-bedroom, six-bathroom waterfront estate on a 2360-square-metre block.

Luxury additions include marble floors, a gold-class style home cinema, a billiards room and a double-length pontoon.

Amir Mian from Amir Mian Prestige is selling the home with a guide of $12.85 million.

Gold Coast

5681 Anchorage Terrace, Sanctuary Cove QLD 4212 

22-24 Admiralty Drive, Paradise Waters

A prime 1351 square metres of one of the Gold Coast’s most elite pockets with striking architectural finishes throughout the five-bedroom, seven-bathroom home that features a media room, an enclosed indoor swimming pool, and a riverfront pontoon.

Robert Graham from Ray White Surfers Paradise takes the home to auction on January 23.

 

Article Source: www.domain.com.au

Continue Reading

Brisbane

Best market we’ve ever seen’ – QLD sales achieve record results

Queensland market

The Queensland market has been roaring throughout 2021, with median prices up around +20 per cent for the year across the state.

Where other areas in the country are now beginning to soften, vendors in the Sunshine State are still experiencing incredible selling conditions that are leading to standout results everywhere you look.

We spoke to top agents in Brisbane and the Sunshine Coast to explore some of their recent sales and just how strong the local market is.

Sunshine Coast homes attract record prices in clear seller’s market

“I can’t recall the amount of activity I’ve seen internationally and interstate coming to Pelican Waters and particularly the Sunshine Coast,” explains Linda Feltman of McGrath in Caloundra.

“Everything is selling well above expectations. It’s even surprising agents sometimes.”

Since the pandemic hit, the Sunshine Coast has been one of the most desirable parts of the country when it comes to property. With its ideal weather, minimal impacts from Covid shutdowns and overall lifestyle benefits, it’s easy to see why.

The sale of 26 Millennium Circuit in Pelican Waters, the lakeside suburb which sits on the southern tip of the Sunshine Coast region, is a great example of the success sellers in the area are experiencing.

Queensland market

26 Millennium Circuit, Pelican Waters provided a stunning outlook onto the lake and local golf course. Source: McGrath Caloundra 

The stunning lakeside home boasted four bedrooms plus a guest wing, huge open living and dining, a gold class cinema, a large pool and spa, and views of the internationally renowned Pelican Waters Golf Club.

“From the moment it went online, we had 66 enquiries within 24 hours,” Ms Feltman says.

The owners were hoping for any offers over $2m, and with the huge levels of buyer interest, they ended up securing a fantastic result at $2.2m, a record sale for the lake area.

8 Bond St was another big hit for the area. The modern, sun-drenched four-bedder was on the market for offers over $1.495m, and again expectations were exceeded when the deal was done at $1.8m.

Queensland market

8 Bond St, Pelican Waters achieved a result well beyond the seller’s expectations. Source: McGrath Caloundra 

“On average, at the moment we’re getting anywhere from 100 to 170 enquiries per property,” Ms Feltman explains.

“We’re also dealing with a minimum of three to four offers. One of my properties the other day had nine offers.

“We’ve got huge demand and we haven’t got enough listings, so the supply is low and the demand is high. So whenever you have those two factors—and it’s like that at the moment—obviously it’s a seller’s market, and there are a lot of families that need to purchase on the Sunshine Coast.”

Brisbane sellers in the ‘best market we’ve ever seen’

“If I was to describe the market quite simply I would describe it as an absolute seller’s market,” says Tony O’Doherty, principal at Belle Property Bulimba.

“It’s often hard to know what market you’re in, and it’s very rare that it’s such an extreme one-sided market,” he explains.

“There is no line in the sand… the market has been as good as it’s been in the Brisbane environment.”

The Queensland capital has, similarly to the Sunshine Coast, been experiencing a historic boom that’s led to some remarkable results for sellers.

30 Grosvenor St in Balmoral is what Mr O’Doherty calls a very good example as to how the market is performing.

Queensland market

The sale of 30 Grosvenor St, Balmoral brought the vendors a massive return on their investment. Source: Belle Property Bulimba 

The five-bed family home attracted a wide array of buyers including people from overseas and interstate.

“We had people from America, Byron Bay, Sydney, Melbourne, and a lot of Brisbanites,” he says, adding that despite the media attention on how many out-of-towners have been showing interest in Queensland real estate, “most of our transactions are people who already live in the suburb.”

The owners of the Balmoral house originally purchased the property for $1.3m in 2015. Since then it hasn’t undergone any significant renovations.

After debating when to sell, they felt the market conditions gave them the confidence to list. Fast forward to November 2021 and it sold for $2.15m, a staggering +66 per cent increase in just six years.

Mr O’Doherty also points to the recent sale of 22 Orchard St in nearby Hawthorne as a demonstration of the current power of the market.

Queensland market

In 2020, the owners of 22 Orchard St, Hawthorne couldn’t find a buyer. In 2021 they went well beyond their dream price. Source: Belle Property Bulimba 

Just last year the owners had the three-bedroom house on the market for an extended period and couldn’t achieve a $1m price. In the 2021 market, the property sold for $1.415m.

These kinds of results aren’t only being seen in a particular price bracket, either. “It’s right the way through the market. It’s the million-dollar product, it’s the seven million dollar product, and everything in between,” Mr O’Doherty says.

“If you are a seller and you want to transact your home, this is the best market we’ve ever seen.”

What’s next for Queensland property?

While there’s talk of the property boom reaching its peak in other key markets like Sydney and Melbourne, the near future still looks very bright in the Sunshine State.

Ms Feltman expects that, once the state’s borders open in mid-December, there may be a short lull in activity as families reunite.

“But after that, once mid-January comes along, I think it’s going to be extremely busy because people will be up here and they’re going to be ready to go into real estate mode and need to buy fairly quickly,” she says.

“I envisage the next six months on the Sunshine Coast will be phenomenal, and then after that, it will depend.

“I think people will start to travel again comfortably, I think that’s going to definitely play a part in the real estate industry.”

She also points out that the 2032 Olympics announcement has set off a wave of new investor interest, so the long-term growth prospects for the region are extremely strong too.

Mr O’Doherty notes that Brisbane has seen a huge amount of growth in a short period, to the point that it puts things in uncharted territory and makes the future difficult to predict.

“This is not a natural economy, you’ve got a lot of money circulating that wouldn’t be if it wasn’t for Covid,” he says.

“I believe we’re in such a heavily geared seller’s market, if you are a seller waiting to sell—what are you waiting for?

“If you’re looking to buy, if you buy the right block size in the right location, it’ll never go backwards. If you’re looking to sell, it’s an absolute seller’s market.”

Article Source: www.openagent.com.au

Continue Reading

Brisbane

Where to find Australia’s most affordable and liveable suburbs: PRD report

Middle-ring suburbs across the country’s capital cities are the best bet for house hunters seeking both affordability and liveability, a new report has found

Rapidly rising property prices in Australia have seen premiums climb for desirable pockets, but liveable suburbs are not completely out of reach for those on more of a budget, the latest PRD Affordable and Liveable Property Guide shows.

The report identified suburbs to watch within a 20-kilometre radius of the Sydney, Melbourne and Brisbane central business districts, and within 10 kilometres of the Hobart city centre.

Suburbs had to have relatively affordable median prices, decent rental yields and a high estimated value of future project and infrastructure development – to ensure the suburbs showed signs of sustainable economic growth. They also had to have low crime rates, an unemployment rate on par with, or lower than, the state average, and proximity to amenities like schools, public transport, shopping centres, green spaces and health services.

“It’s not just about living in the cheapest suburb,” PRD chief economist Diaswati Mardiasmo said of the report. “But also about being able to live in a suburb that is well serviced by public transport, amenities and everything you need [for the most affordable price point].”

Finding suburbs that met the criteria had become increasingly challenging in the current market, Dr Mardiasmo said, with the number of such suburbs in Sydney, Melbourne and Brisbane halving over the past six months. However, there were still some pockets where good liveability cost less of a premium.

Here’s where buyers should cast their gaze in each of the included cities.

AFFORDABLE AND LIVEABLE SUBURBS – UNITS
Suburb Median price Rental yield Future projects
Sydney Cromer $812,500 3.4% $3.0M
Peakhurst $751,000 3.9%  $31.5M
Mortdale $657,250 4.3% $4.5M
Melbourne Truganina $446,000 3.9% $1.9B
Greenvale $590,000 5.8% $9.5M
Hadfield $600,000 3.5% $8.9M
Brisbane McDowall $423,000 5.4% $33.9M
Gordon Park $440,000 5.6% $3.0M
Kedron $449,000 5.6% $11.7M
Hobart Oakdowns $550,000 5.3% $6.0M
Moonah $480,000 5.3% $1.8M
Glenorchy $410,000 5.3% $10.6M
Source: PRD Affordable and Liveable Property Guides 2nd Half 2021.
Brisbane 

Brisbane had the largest proportion of houses available for buyers with lower to middle budgets, with more than a quarter of sales within the metro region this year below $700,000. However, Brisbane buyers need to spend more of a premium to purchase in a liveable suburb.

While Brisbane, along with Hobart, was typically thought of as a more affordable capital city, many of the lower-priced suburbs failed to satisfy other criteria such as liveability, investment return and future project development, the report noted.

The top selections were largely to the city’s north, with the exceptions of Birkdale and Oxley.

Australia’s most affordable and liveable suburbs

Gordon Park was among the Brisbane picks for apartment buyers. Photo: Tammy Law 

“Many people think that when they need to go to an affordable place, they need to go to the northern part of the city … but Oxley is in the southwest and Birkdale is in the east,” Dr Mardiasmo said, adding that more established areas were often overlooked for newer suburbs where buyers knew prices would be lower. 

Both Birkdale ($720,000) and Oxley ($695,000) were more expensive than Bracken Ridge ($624,000) in the north, which was the third pick for house hunters.

The north is also where those after an apartment should look, with McDowall, Gordon Park and Kedron making the list. Each had a median unit price below $450,000 – a price tag that 45 per cent of Brisbane metro apartments sold below this year.

Hobart

The cost of liveability, particularly for house hunters, remains the highest in Hobart, where residents need to pay the largest premium for liveable suburbs. Low supply meant many of Hobart’s liveable suburbs were priced above the city’s median, meaning they failed the affordability test, the report noted, while more affordable suburbs did not pass the liveability criteria.

“The perception of Hobart being the most affordable place have changed, we’re seeing record-breaking sales and a lot of it is to do with little supply, ” Dr Mardiasmo said. 

Australia’s most affordable and liveable suburbs

Berriedale in Hobart has a median unit price of $480,000, according to PRD figures. 

Oakdowns, about a 20-minute drive from the CBD, made the top picks for both house and units, with medians of $595,000 for houses and $550,000 for units.

Howrah ($705,000) and Berriedale ($480,000) were also among the picks for house-hunters, while Moonah ($480,000) and Glenorchy ($410,000) were selected for apartment buyers.

 

Article Source: www.domain.com.au

Continue Reading

Positive Cashflow Property

duplex designs, dual occupancy homes

Property Investment Advice

gold coast property management

Trending

website average bounce rate