Month In Review - February
Updated: Mar 8
What a month! We've seen a lot of active buyers in the market and not a lot of new stock. Could this be a perfect storm for a big movement in house prices? It's starting to look that way. This is also true for the rental market, so if you've got a renewal coming up it might be worth reviewing the rent. We've also had some interesting news from the RBA regarding interest rate rises...Find out more below.
Interest Rate Update
We've seen more lenders drop their rates again this month to be more competitive but we're still seeing high processing times from most of the big lenders, so if you are thinking of a 14 day finance clause then it's important to talk to your broker up front to assess your options. Here are some of the market leading rates as of February 2021.
*Did you know that the average mortgage rate this time 5 years ago was 5.61% and the highest rate Australia has ever seen rates was around 18.5%.
To find out if you qualify for any of the above rates contact us today.
RBA cash rate
The RBA cash rate has remained the same at 0.1%.
Some of the key takeaways from this meeting were:
- The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3% target range. For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest.
- The Board remains committed to maintaining highly supportive monetary conditions until its goals are achieved. Given the current outlook for inflation and jobs, this is still some way off.
- An important near-term issue is how households and businesses adjust to the tapering of some of the COVID support measures and to what extent they will use their stronger balance sheets to support spending.
If you want to see what else was discussed then click HERE
BOQ to acquire ME Bank! A new force to take on the big 4!
The Bank of Queensland (BOQ) is to acquire Members Equity Bank (ME Bank), after securing a $1.3 billion equity funding package and ME Bank’s shareholders having unanimously agreed to accept an all-cash offer from BOQ. Combined, the group will have pro forma total assets over $88 billion, with total deposits of more than $56 billion.
All three BOQ Group brands (BOQ, Virgin Money and ME Bank) would operate on the same platform. Both ME Bank and Virgin Money operate on Temenos. ME Bank said the deal would not affect or change existing customers’ accounts or arrangements, nor their relationship with ME Bank.
With both lenders heavily focused on customer service this is a real threat to the big 4 as they struggle to win the hearts of the country.
Interstate migration to Qld at all time highs
Due to Covid-19 the spotlight and lifestyle of Queensland have won the hearts of many Australians with migration to the state up 90% from the previous year! That's over 20,000 people arriving in Queensland to live each month with the Net value of people staying in the state rising month on month.
Why are we talking about this in a Finance blog?
The knock-on effects of this mass migration have a direct impact on the Real Estate industry with strong demand for rentals and home purchases. This mixed with a low supply of new listings and rentals coming onto the market is pushing prices up, quickly!
This is good news for homeowners and investors but bad news for First Home Buyers. We are also expecting to see bank valuations on properties cause more issues as valuers base their price estimate on historic values not what you are happy to pay for it.
Unused First Home Loan Deposit Scheme (FHLDS) reissued by the Government!
Good news for First Home Buyers as the federal government has revealed that it is to reissue unused guarantees from the first tranche of the First Home Loan Deposit Scheme. This means around 1,800 places will be added to the pot to claim through selected lenders.
Under the Scheme, eligible first home buyers can purchase or build a new home with a deposit of as little as 5 per cent (lenders criteria apply). This could save you in excess of $10,000 in LMI fees.
If you are thinking of buying or building your first home then we can help make that happen. With only a select number of lenders approved for the scheme and limited positions available with each lender, it's important to select the right lender so you don't miss out.
Lender processing times still remain an issue
Lender processing times still remain a big issue with some lenders taking over 30 days to approve your loan! While this isn't the case for all lenders and it's still possible to get approved within the 14 days finance clause your option on lenders may not be that big and it may not be the most competitive rate.
Due to this, it's more important than ever to talk to your broker or lender before heading out to buy and getting the paperwork started first to help speed up the process.
If you would like to find out more information on any of the above topics or would like to see how we can help you with your mortgage Contact us.
WARNING: The contents of this communication are not designed to replace credit advice. We have not taken into account your needs, objectives or financial situation. The comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different comparison rate. The comparison rate is calculated on a $125,000 secured loan over a 25 year term at 60% LVR.