Health, friendship and happiness – we assess almost every aspect of our lives in the new year, so why not re-evaluate the loans that are financing our homes?

It’s easy to adopt a set and forget policy when it comes to your finances, but it could be that your home loan is lacking relevance to your current situation. A home loan is probably the biggest finance product you’re likely to purchase in your lifetime, so it makes absolute sense to check in every now and then to make sure it works for you – and what better time than in the new year?

Here’s why a home loan health check could be just what the doctor ordered for 2018 - call (07) 3839 6000 now to make a time!!

Interest rates are low, for now

REA Chief Economist Nerida Conisbee says searching for a lower interest rate makes sense at any time: the lower your interest rates, the lower the repayments will be. You could knock years off you loan, not to mention saving thousands in interest.

With interest rates “unlikely to rise anytime soon”, it is an especially opportune time to refinance.

“Even though the RBA is unlikely to increase the cash rate any time soon, mortgage rates continue to rise, driven by a lot of other factors including rising wholesale costs and regulators urging banks not to lend too much,” Conisbee says.

The economy has reason to raise rates, eventually

While Conisbee says the banks are unlikely to raise interest rates anytime soon, it will likely happen at some time this year.

“China, the US and Japan are our three biggest trading partners so when their economic growth is strong, it increases demand for our goods and services,” Conisbee explains.

“While China’s economic outlook isn’t expected to be vastly different in 2018, it is the US that is really expected to see vastly different conditions over the next two years. The US economy is growing quickly and this is increasing demand for Australian exports. This will grow our economy and give more reason to raise rates in 2018.”

If you’re thinking of refinancing, contact Noel and the team at Fulcrum Finance now as it could be worth getting a jump on a deal before this happens.

Investors could find their silver lining

“A lot of banks have already moved interest rates up significantly, particularly for interest only investor loans,” says Conisbee.

“This might due to a number of events that occurred last year. There have also been additional taxes on offshore investors in many states, as well as cuts to benefits off the plan buyers enjoyed such as stamp duty concessions. Even negative gearing wasn’t left alone, and while the changes thus far have been fairly moderate, bigger changes could be on the cards if a new government comes into power,” she says.

“And in some states, there’s just less supply and fewer apartments on the market,” she adds.

“There are likely to be far fewer investors in the market this year, so it would pay to shop around, given it would be more competitive for banks to find borrowers,” Conisbee says.

If you are an investor and your loan has gone up, or you’ve outgrown your current home, Fulcrum Finance might be able to help.

In response to rising interest rates on investment loans, banks are reporting an increase in customers changing their investor home loan to owner-occupied, according to an article in the Sydney Morning Herald last year, and in my experience, this trend continues. As investors rates are now higher than owner-occupiers for the first time since the 1990s those who are living in properties that they may have rented out previously are taking steps to ensure they are being recognised as owner-occupiers. Yellow Brick Road mortgage broker David Ryman warns some borrowers in this situation may be caught out if they don't alert their bank to the change. "People are very dormant in relation to their finances. When changes like this happen, most people don't even know what interest rate they are paying, let alone whether they should be on a different type of rate," Ryman said. "There would be plenty of people who are unaware of the change and are basically sitting on a rate that's higher than it should be." Did you know you can occasionally reduce your interest rate and not even change lender........ ask us how at FulcrumFinance.com.au

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker with Fulcrum Finance being an excellent place to start.

Noel Shephard is a credit representative (Credit Representative Number 443890) of BLSSA Pty Ltd (Australian Credit Licence No. 391237). We receive services to support the broking services we give you. If you would like to find out how they manage your personal information, please click on the link http://www.planaustralia.com.au/privacy-policy

The Australian mortgage market is flooded with thousands of home lending products. Indeed, a lot of choice for home buyers. Besides, there are other parameters to consider – fixed or variable rate, packaged home loan deals, PI or Interest-only loans, honeymoon rates and much more. Phew! That’s a lot of information to rummage through in a limited amount of time. Especially when you are talking about financing your life’s most significant investment – your home – you can’t take a chance, can you?

Fortunately, as in every sphere, technology is there to rescue mortal humans from the humdrum of sieving through humungous piles of information. Today, you can compare several home loan deals from the comfort of your favourite screen, without having to step out of your home, even once.

However, are you so well-versed with the mortgage market as to know which home loan deal is the best for you? Navigating through home loans; comparing the rates, features and fees can be time-consuming. Or, you could simply choose to meet a broker and let them guide you to the best home loan for your situation.

Simple hacks to save more money

Considering that your mortgage repayment is probably your largest expense each month, you would be glad to know that there are simple hacks that can help you reduce the size of your repayment as well as the term.

Decide between fixed interest rate and variable – The debate between fixed and variable rates continues to remain a heated one. A fixed rate offers peace of mind and the freedom to plan your finances, thanks to the fixed repayment amount for a predefined period. On the other hand, a variable rate means you pay according to the market, which can fluctuate either way. However, in the current scenario, a flexible rate could be beneficial as the interest rates continue to drop.

Besides, a variable rate loan is packed with features such as a fixed number of additional repayments and redraws in a year, ensuring flexibility in your mortgage.

You can always switch to a fixed rate if you think the interest rates are going to increase. Moving from a variable rate to a fixed one is quick and easy. However, the reverse could be expensive, as prepaying or refinancing a fixed loan incurs break fees in most cases.

If you have any questions or would like to review your current loan structures - contact Noel Shephard @ Fulcrum Finance today.

Noel Shephard is a credit representative (Credit Representative Number 443890) of BLSSA Pty Ltd (Australian Credit Licence No. 391237). We receive services to support the broking services we give you. If you would like to find out how they manage your personal information, please click on the link http://www.planaustralia.com.au/privacy-policy.

The large falls in US and Australian stock markets yesterday were caused by computerised selling based on momentum and volatility, according to Nikko Asset Management head of Australian equity Brad Potter.

Australian stocks had their worst day in two years yesterday, with the ASX 200 down 3.3 per cent at the close of trading. Coupled with losses on Monday, the ASX 200 has fallen over 5 per cent in two trading days.

US equities continued their falls on Friday, with the Dow Jones Industrial Average down 4.6 per cent on Monday – with futures markets predicting further falls on Tuesday.

But according to Mr Potter, the falls are a "technical correction" with little relation to fundamental valuations.

The US stock market was not helped on Monday by regulatory action against Wells Fargo, which saw the bank's share price down almost 10 per cent – dragging the rest of the financial sector with it.

"It has just fed on itself. ETFs volumes up much greater than normal, with a lot of people exiting," Mr Potter said.

"It all appears very technical. Fundamentals look very good globally, so I just think it's a good opportunity for [fundamental fund managers]."

In fact, Nikko AM believes Australia is on the cusp of an economic profit cycle that will benefit economically cyclical stocks like materials, energy, industrial cyclicals and financials, Mr Potter said.

John Sevior of Australian equities boutique Airlie Funds Management, whose business was acquired by Magellan yesterday, said he is also looking for an opportunity to buy up attractive Australian companies.

"We've been cautious [in recent months] and we'd love to see a decent shake-out. The businesses fundamentally don't change much – the prices change a lot more," Mr Sevior said.

"We know the businesses we like. We've been frustrated for the past six months at being unable to buy the businesses we like at attractive prices so I'll be cheering [stock market falls] hopefully for a little bit longer so we can put some of our money [to] work."

Source: https://www.investordaily.com.au

The hangover and food comas are hopefully receding so now is the perfect time to get your financial goals for 2018 in place, the financial services regulator has said.

The Australian Securities & Investments Commission (ASIC) wants Aussies to start the new year on the right financial foot, encouraging them to have a financial plan and get “on top” of their finances.

Senior executive leader for financial capability at ASIC, Laura Higgins said one of the most popular New Year resolutions is to take control of individual finances.

However: “According to research conducted for ASIC, about 44 per cent of Australians say they have a short-term financial plan in place, while only 23 per cent say they have a long-term plan.

“Having a financial plan in place is key to getting on top of your finances.”

Continuing, Ms Higgins said the first step is to identify financial goals and then figure out the steps that will be taken to meet them.

Breaking it down further, ASIC highlighted five financial New Year resolutions to help get finances in shape.

1. Make a plan

Research by the regulator has revealed that 90 per cent of Aussies are keeping track of their finances, with eight in 10 using a budget.

Single parents (94 per cent) and singles living in shared accommodation (84 per cent) were the most likely to have a budget.

ASIC said: “Having a plan in place to manage your money will help you track your spending and understand your money habits. A budget is the cornerstone of a financial plan.”

2. Take charge of your debt

Debt a little bit out of control? ASIC said Australians can take control of their debt by starting to pay off smaller balances on things like credit cards before moving on to other debts.

The regulator explained: “A credit card debt of $2,000 could take you over 12 years to pay off and cost about $2,150 in interest, if you only pay the minimum repayment.”

3. What about creating a savings balance?

A savings balance can give you “breathing space to deal with life’s ups and downs” – perfect for if you’re taking up yoga as your other New Year’s resolution.

Further, a rainy day fund means you won’t need to borrow money if something bad happens.

“If you're looking to save for something specific in 2018, such as a holiday, a home or a wedding, having a savings plan in place is critical to achieving your money goals,” ASIC added.

“A good tip for building up a savings buffer is to "set and forget", by opening a separate savings account and making regular payments automatically via your bank or from your pay.”

4. “Take stock” of insurance

“Having the right insurance in place is a critical part of a financial plan, but it pays to shop around,” ASIC advised.

Continuing, it said it’s critical that users review their existing policies to make sure it fits their needs. If it doesn’t, they should look for a policy that does.

“Make a resolution to compare the policies offered by other insurers when your home or car insurance comes up for renewal to ensure you get the best deal.”

5. Superannuation!

Pointing to ASIC figures that show 77 per cent of Aussies know their super balance, the regulator said people with multiple accounts should consider consolidating them into one.

That move, together with making extra contributions and reviewing investment options will help to “maximise” super.

Global data analytics provider CoreLogic has released its first Property Flipping Report, which provides a national analysis of properties that were ‘flipped’ (bought and re-sold within a short time frame with the purpose of making a profit) in 2017.

The research measures flips within one year of purchase and within one to two years of purchase. It also tracks national trends in flipping over a 20-year period, from June 1997 to June 2

Key findings

Nationally, the vast majority of properties (almost nine in ten) in 2017 were flipped for a profit. This included properties re-sold within a year of purchase (89.1 per cent) and those re-sold within one to two years (89.9 per cent).Property flipping accounts for only a small percentage of property sales overall. Only 1.3 per cent of dwellings resold over the year to June 2017 were previously held for less than a year. A further 5.7 per cent were put back on the market within one to two years of ownership. Historically, the rate of property flipping has fallen. Over the year to June 2017, 5.7 per cent of property re-sales across the combined capitals comprised properties that were flipped within one to two years of purchase. This compares to 11.3 per cent in 2002. However, property flipping is now on a slight upwards trajectory. Across the combined capitals, the past five years has seen a 0.6 per cent increase in properties flipped between one and two years (5.7 per cent in 2017 v 5.1 per cent in 2012) and a 0.2 per cent increase in properties flipped within one year of purchase (1.2 per cent in 2017 v 1.0 per cent in 2012). This trend is mirrored across regional Australia. Flipping is more prevalent across the Eastern states. The highest rate of flipping occurred in Sydney, where 6.8 per cent of property re-sales over the year were flips between 1 and 2 years of property ownership. Regional Queensland (6.6 per cent) and Melbourne (6.4 per cent) also recorded a higher percentage of property sales as flips.Sydney and Melbourne were the most profitable capitals for flipping. Regional NSW (94.5 per cent) recorded the highest percentage of flips at a profit within one to two years of purchase, followed by Sydney (94.3 per cent) and Melbourne (93.7 per cent). All trended above the national average of 89.9 per cent. Darwin was the least profitable capital. Around three in 10 (29.7 per cent) properties flipped within one to two years of purchase sold for a profit, followed by around half (52.3 per cent) in Perth. Regional NT recorded the least profitable market one year post-purchase. Only 50 per cent of flips were profitable, followed by Darwin at 64.7 per cent.

Key regional variations

NSW

Over nine in 10 flips in Sydney and regional New South Wales were profitable in 2017, reflecting the recent high growth in property values. In Sydney, only 5.7 per cent of flips within one to two years of purchase were at a loss. This compares to 37.6 per cent a decade ago. The Illawarra region experienced the highest level of flips in NSW (8.7 per cent of resales) within one to two years, and the highest annual increase in flipping (up 1.7 per cent on 2016). Illawarra was also one of the most profitable regions in NSW, with only around two per cent of properties flipped at a loss

Victoria

Most flips in Victoria occurred in South East Melbourne (7.8 per cent of resales) and North West Melbourne (7.6 per cent of resales) for properties held for one to two years. These areas also recorded the second and third highest most profitable flips for resales between one and two years (3.7 per cent and 3.5 per cent losses respectively).Property flipping was most prevalent in the Gold Coast, comprising 7.9 per cent of re-sales for properties held between one and two years in 2017. The region also experienced the biggest growth in flipping, up 1.3 per cent on a year ago.The area most likely to turn a profit was Moreton Bay North (95.6 per cent profitable), for properties sold between one and two years. The highest percentage of losses occurred in Townsville where half (48.8 per cent) of properties that were owned for between one and two years sold at a loss (up 5.9 per cent on 2016).

Tips for first-home buyers - The property market may be beyond the reach of many however here's some creative tips to make things a little easier.

It’s no surprise first home buyers facing the prospect of record high house prices may be feeling optimistic after a week of commentators predicting a price crash.

But while Australia’s leading economists consider the prospect of such a crash to be “outrageous” and unlikely to happen, even if such a crash did eventuate it might not be quite what first-timers had in mind.

Here are five things that would happen if the property market dropped 50 per cent.

Difficulties getting a mortgage

Though many first-home buyers would think lower house prices would make it easier to buy, it might not be the case, BIS Shrapnel senior manager residential Angie Zigomanis warns.

“Banks would get a lot more conservative with what they’re lending, or they might not lend at all,” he said.

Those with a large deposit may still be able to get on the ladder, but it’s likely they’re few and far between.

“First home buyers are usually at the margins, they’ve had to borrow 85 per cent to 90 per cent-plus and any tightening of market will hurt those people the most,” Mr Zigomanis said.

SQM Research managing director Louis Christopher said an aggressive restriction in lending across the board, even with very low rates from the Reserve Bank, would be likely.

“There has been some testing done, which found the banks could comfortable withstand a 20 per cent decline, but there hasn’t been testing at 50 per cent,” he said.

“Lending facilities to first home buyers may well be restricted if a crash happened.”

Rising rents

One of the largest costs faced by first-home buyers when they are saving for a deposit is rent.

After construction tightens, there would be a chance that rents would be on the rise with fewer new properties available for rental, Mr Christopher said.

“When we look back at the global financial crisis and the US cities that experienced this type of price decline, there was actually a rise in rents post-GFC,” Mr Christopher said.

“Rents accelerated in late 2009 to 2010 as a result of a major undersupply of new housing, due to low dwelling prices that meant they couldn’t be developed below cost,” he said.

In a downturn in Melbourne and Sydney there would be a “medium-to -longer-term risk” of such a rent hike occurring.

“It would be two to three years after the initial crash,” Mr Christopher said.

Domain Group chief economist Andrew Wilson said there would be no reason investors wouldn’t continue to make money out of their tenants, and even less incentive to sell if they faced negative equity.

“Transaction costs are very high in this country, it’ll cost $100,000 just to sell,” Dr Wilson said.

“Why would they sell? They’ll just continue renting it out and tenants will pay,” he said.

Fewer homes for sale

If property prices crashed, there would also be very limited choice on the market for buyers.

“Australians will do anything to hang on to their house and there’s no reason for them to sell unless they face unemployment,” Dr Wilson said.

While some states in the US provided non-recourse loans, where those whose homes were worth less than the mortgage could sell it and walk away owing nothing, in Australia home owners are required to pay back any extra leftover after selling.

Mr Zigomanis said for those facing transaction costs, there will also be less upgrading and downsizing activity.

“Through most downturns people just sit and wait for it to pass,” he said.

Slowing construction

One of the first things to happen would be a slowdown in apartment development and housing construction as the ability to make a profit dwindled, Mr Zigomanis said.

While property that is now in the pipeline would probably come to fruition, there would be a standstill of new development.

“Development freezes as no one can profitably develop, it could become a problem as people have bought sites and cannot justify building,” Mr Zigomanis said.

Any oversupply being seen in capital-city markets would begin to balance out, and undersupplied markets would probably become even tighter.

Unemployment issues

One of the more damaging spin-off results of house prices plummeting would be a rise in unemployment as a result of the industries that are fuelled by the housing market.

“People waiting to get a home [when prices drop] can’t if they don’t have jobs,” Mr Zigomanis said.

Many of these jobs are related to the housing industry, such as real estate agents, financial services and developers.

Secondary to these jobs are tradespeople who work on renovations and home improvements, as well as discretionary spending on retail, including white goods, that are heavily influenced by housing profitability.

“People will spend money on renovations when their employment is secure, they feel comfortable taking on more debt,” Mr Christopher said.

“In a major downturn the reality is that job security would be very bad. There would be a flow-on effect to other sectors, you would see a big drop-off in construction services, which would effect employment,” he said.

This could cause the Reserve Bank to aggressively cut rates, which Mr Christopher said they would do before a 50 per cent decline occurred.

A splash of fresh paint can be a quick and cost-effective way to transform a space, but getting the perfect finish is not always as easy as it looks.

The difference between your DIY paint job and the work of a professional won’t be obvious if you can resist the temptation to just jump straight in. The most common DIY painting mistakes are easy to avoid with a little preparation.

1. Choosing a colour you’ll regret

Colour choice can make or break a room. Choosing a vibrant colour for a space that you want to feel calming, or a cool hue for a room that should be cosy, can be a costly and frustrating mistake. An online paint tool can help you work out which colours will work in your space, and sample pots allow you to test different shades with the lighting in your room.

2. Using the wrong type of paint

Choosing the correct type of paint for each different surface is essential for a professional finish. Walls, ceilings, trims, doors, bathrooms and kitchens may all require different levels of sheen, and any existing paint on these surfaces should also be taken into consideration.

3. Painting over cracks

It’s common to think that paint will cover up cracks and holes but it can actually do the opposite – imperfections on a freshly painted wall stand out more than ever. Taking the time to properly patch the wall (with sealant or cement) might slow you down but pays off in the end.

Paint won’t cover up cracks and holes, it can actually do the opposite.

4. Sacrificing the carpet

It’s nearly impossible to paint a room without drops of paint falling onto flooring and furniture, but many DIYers still try. It’s worth moving all furniture out of the room and using drop cloths to protect the floor. It’s much easier than scrubbing carpet or having to replace a newly splotched sofa.

5. Leaving tape on for too long

Take the time to carefully apply painter’s tape around trims, light switches and power points, but don’t leave the tape on too long or you might lose some paint when you remove it. For best results, carefully remove the tape before the paint is completely dry.

Don’t leave the tape on too long or you might lose some paint when you remove it.

6. Buying cheap equipment

Buying the cheapest brushes and rollers might seem like a good idea but you could find yourself picking bristles and fibres out of your freshly painted surfaces. Spending a little extra on high-quality paint and equipment will give better coverage and save you money in the long run.

7. Painting from the tin

If you’re dipping your brush directly into the tin, you not only run the risk of contaminating the paint with a dirt-coloured tint but, even worse, you could drop the tin of paint. Pouring paint into a plastic container or tray is essential.

Pouring paint into a plastic container or tray is essential.

8. Not cleaning properly

Forgetting to put the lid on a paint tin or failing to properly clean brushes and rollers wastes both time and money. If you’re taking a short break you can cover the tin with plastic wrap and put the brushes and rollers in plastic bags. If you’re breaking for longer, wipe the tin with a cloth, secure the lid firmly with a mallet and do a thorough clean up with lukewarm water and a mild soap. This way your tools will be ready to go when you start again.

While DIY painting can take time and effort, it’s incredibly satisfying to sit back and enjoy the end result. A fresh coat of paint is something you will enjoy for many years.

The vast majority of property owners who sold their home in the December 2015 quarter sold at in excess of their previous purchase price according the latest CoreLogic RP Data quarterly Pain and Gain Report

The Pain & Gain Report found that 91.6 per cent of properties resold for profit over the quarter with 31.2 per cent of homes selling for more than double their purchase price. The total value of all profit was $17.1 billion with the average gross ‘gain’ $270,842 per sale.

Only 8.4 per cent of homes resold recorded a gross loss compared with their original purchase price, up slightly from 8.3 per cent for the September quarter. The total value of loss over the quarter was $399 million. The average ‘pain’ felt for these properties was $69,493.

Report author Cameron Kusher said, “Whether for investment or owner occupation, the results highlight the fact that property ownership should be seen as a long-term investment.”

“Across the country, our results show that homes which resold for a loss had an average length of ownership of 6.7 years. For gross profit sales, the average length of ownership was recorded at 10.1 years, while homes which sold for more than double their previous purchase price were owned for an average of 17.7 years.

“Our results have shown that investors over owner occupiers were more likely to resell their properties at a loss. Over the quarter, 7.2 per cent of owner occupier sales nationally were at a gross loss compared to 10.6 per cent for investor owned stock.

“The losses experienced by investors comes down to the fact that this group may be more willing to accept a loss on sale due to the tax implications of being able to offset the loss against future capital gains,” he said.

The Pain & Gain report findings also confirmed a proportion of loss-making resales across the national capitals are now trending lower expect for Perth and Darwin where the instances of losses are increasing.

Mr Kusher said, “The trends reflect the fact that over the past year, home values have increased in all capital cities other than Perth and Darwin. Not so surprising is the result for Sydney and Melbourne; both cities have seen significant increases in home values over recent years and therefore, fewer loss-making resales occurred compared with other capital cities.”

Within the regional areas of the country the proportion of loss-making resales is higher than those within the capital cities. The proportion of loss-making resale’s is currently trending lower in Regional NSW, Regional Queensland, Regional Tasmania and is fairly flat in Regional Victoria and higher elsewhere.

Proportion of total resale’s at a loss/gain, houses vs. units, December 2015

Mr Kusher said, “Capital city housing markets continue to record a lower proportion of loss-making resales than regional areas of the country. We’re seeing the trend shifting in regional areas with the proportion of loss-making resales trending lower particularly in areas linked to tourism and lifestyle factors.

“Housing markets linked to the resources sector are generally seeing an increase in loss-making resale’s after housing market conditions in many of these locations have posted a sharp correction,” he said.

About the CoreLogic RP Data Pain & Gain Report:

The Pain and Gain report is a quarterly analysis of homes which were resold over the quarter. It compares the most recent sale price to the previous sale price in order to determine whether the property sold at a gross profit or gross loss. It provides a proxy for the performance of each housing market and highlights the magnitude of profit or loss the typical seller of a home makes across those regions analysed.

For additional information please email: media@corelogic.com.au or give us a call on 1300 472 767.

Disclaimer:

In compiling this publication, RP Data Pty Ltd trading as CoreLogic has relied upon information supplied by a number of external sources. CoreLogic does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever and limits any liability it may have to the amount paid to CoreLogic for the supply of such information.

ABOUT CORELOGIC

CoreLogic Australia is a wholly owned subsidiary of CoreLogic (NYSE: CLGX), which is the largest property data and analytics company in the world. CoreLogic provides property information, analytics and services across Australia, New Zealand and Asia, and recently expanded its service offering through the purchase of project activity and building cost information provider Cordell. With Australia’s most comprehensive property databases, the company’s combined data offering is derived from public, contributory and proprietary sources and includes over 500 million decision points spanning over three decades of collection, providing detailed coverage of property and other encumbrances such as tenancy, location, hazard risk and related performance information.

With over 20,000 customers and 150,000 end users, CoreLogic is the leading provider of property data, analytics and related services to consumers, investors, real estate, mortgage, finance, banking, building services, insurance, developers, wealth management and government. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and geo spatial services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. CoreLogic employs over 650 people across Australia and in New Zealand. For more information call 1300 734 318 or visit www.corelogic.com.au

Each quarter the Reserve Bank (RBA) releases its selected ratios of household finances. The latest data for December 2015 shows the ratio of household and housing debt to disposable income has continued to climb.

The latest ratios of household finances highlight that the ratio of debt to disposable income is at a record high however, the value of household assets is also at a record high level. Meanwhile with record low interest rates, the ratio of interest payments to disposable income is the lowest it has been since early 2003.

The first chart highlights the ratios of housing and household debt to disposable incomes and plots it against standard variable mortgage rates. The ratio of household and housing debt to disposable incomes are each at historic highs of 186.3% and 133.8% respectively with the ratios increasing by 3.4% and 4.3% over the past year. Over the period from 1988 to 2015 standard variable mortgage rates have fallen dramatically and that has surely contributed to household’s preparedness to take on more debt.

Ratio of household and housing debt to disposable income vs. standard variable mortgage rates

To further highlight this point, the second chart looks at the ratio of household and housing interest payment to disposable incomes. Over recent years the ratio has been falling with the ratios for households and housing sitting at their lowest levels since 2003. The higher ratio of interest payments currently compare to 1988 when interest rates were substantially higher is reflective of the much higher cost for household assets, particularly the cost of residential housing.

Ratio of household and housing interest payments to disposable income

Although households have significant debt, particularly for housing, the value of the assets they hold is substantial. The ratio of household debt to disposable income is currently 186.3% however, the ratio of household assets to disposable income 862.8%, the highest it has ever been. Similarly, the ratio of housing debt to disposable income is 133.8% however, the ratio of housing assets to disposable income is 471.3%. Interestingly, the ratio of household assets to disposable income is still lower than its previous peak in December 2007 at 476.2% but it is nudging back up towards its previous record high.

Ratio of household and housing assets to disposable income

The value of households’ assets are significantly greater than the value of the debt and this is highlighted in the fourth chart. Based on this data, the ratio of household debt to assets is 21.6% and the ratio of housing debt to housing assets is 28.4%. The chart also shows that the ratios have been trending lower recently although the housing assets to debt ratio increased slightly over the December 2015 quarter due to weaker home price growth.

Ratio of household and housing debt to assets

Australian households are heavily indebted, with most of this debt due to residential housing. While the debt is high, the value of the assets held is much greater than the debt. A few things which are important to consider however, are that this is a national view and across different regions the ratios are likely to be substantially different. Furthermore, lower interest rates and a fairly strong labour market over recent decades has contributed to Australian’s preparedness to borrow. Were either of these factors to change it could lead to a dramatic deterioration in the value of these assets while of course the debt would remain. Importantly, mortgage arrears remain low and the Reserve Bank has reported that the typical mortgage holder is currently more than two years ahead on their mortgage repayments. This coupled with higher rates of household savings provide a potential buffer if unemployment were to rise sharply or interest rates began to increase.

Lifestyle purchasers are joining the ranks of inner-city buyers influencing where home values rise around the country.

An analysis of the changes in home values in the 12 months to December 2015 has found suburbs at least 50km from the nearest city or town recording massive yearly increases in home values.

In New South Wales, Yellow Rock in the Blue Mountains recorded the second-highest increase in home values for the state at 43.8%. It was the only suburb in New South Wales’ top five list with a median value of under $1 million, coming in at $637,292.

Yellow Rock in the Blue Mountains… there’s been some lifestyle purchasing happening there.

Suburbs on Sydney’s North Shore and eastern harbour took out the other top spots, with Point Piper jumping from a median price of $2,122,673 to $3,080,820 to make the biggest rise in home values for New South Wales.

The tranquil location at Yellow Rock is luring in lifestyle purchasers.

In Victoria, Seville East in Melbourne’s Yarra Valley Ranges – a popular wine-making region – recorded the third-highest increase in home values at 33.8%. The median value in Seville East moved from $321,181 to $429,728, making it the lowest value suburb on Victoria’s list.

Like New South Wales, the remaining top suburbs in Victoria were sought-after inner-city spots, particularly towards the east and south-east.Deepdene, a former neighbourhood of Balwyn (which also made the top five) was the biggest mover, almost doubling its median value with a growth rate of 48%.

Tasmanian suburbs with the biggest value increases were also a broad mix of lifestyle destinations and inner-city areas. Sulphur Creek, on Tasmania’s north west coast, increased its median value by 17.3% making it the number one mover for the state.

In number three and four positions, rising inner-city suburbs North Hobartand Cremorne increased by 12.4% and 11.4% respectively.

With views of Sulphur Creek and Bass Strait, this Tasmanian coast propertyis the ultimate getaway shack.

Cameron Kusher, CoreLogic RP Data Analyst, says areas close to the major cities are always going to be high in demand. But the trend towards lifestyle purchasing played out in almost every state.

“In NSW, a lot of the cities on this list are inner-city or North Shore suburbs, and they will continue to rise in value,” Kusher says.

“Where you will see the weaker positions are in the outer more affordable ares.

“Yellow Rock in the Blue Mountains… there’s been some lifestyle purchasing happening there. That’s the only reason I can think as to why the market would be so strong for the year.”

In Melbourne, Kusher says the trend in home value growth is similar to Sydney, with premium housing markets remaining strong.“Particularly in Melbourne where there’s such a focus on being in the right school zone, people are paying top dollar to secure that kind of property.”

Home values continue to rise in Melbourne’s top school zones.

In Queensland, suburb home value growth trends were more varied. East Deep Creek, an agricultural town of Gympie, saw year-on-year home values accelerate by 24%, with mining town Quilpie close behind at 19.4%.

Cabarlah, a popular suburb of Toowoomba in the Darling Downs region, recorded the third-highest increase in home value growth at 19.3%.

Salisbury was the only inner-city Brisbane suburb to make the top five for Queensland, rising 17% in value.

Kusher says Toowoomba has been a steady market for years, and may continue to see growth as the southeast Queensland job market opens up.

Behind the broad-based rise: Capital city home values

The year-on-year increase of Australia’s combined capital cities was 7.6% in February, while the yearly change in value growth was 2.2% for the rest of the states in January.

Melbourne is still the number one capital city for home value rises with an annual growth rate of 11.1% in February. Sydney trailed behind at 9.5%.

Sydney has reached its peak level of growth and now it’s slowing

Kusher says by the end of the year both Sydney and Melbourne will slow their rate of home value growth.

“Melbourne began to slow (in November) and has flatlined for the last three months,” he says.

“It will still outperform Sydney, and the reason for that is that it’s still a lot more affordable.

“Sydney has reached its peak level of growth and now it’s slowing.”

Upper hand: Buyers in Sydney set to be better off in 2016

Vendors still have the edge over buyers in Sydney, although home values are beginning to steady.

Sydney’s position behind Melbourne in home value growth does not look secure for the rest of the year. Kusher says Hobart, Brisbane and Canberra will jostle for that second position.

“Hobart is really benefiting from the tourism sector,” he says.

“Also, last time Hobart’s housing market was really strong was because there was a lot of interstate migration from Victoria. We may start to see some more lifestyle purchasing in Hobart from Victorians as well.

“Home owners in Melbourne have a lot of equity in their homes and they’re starting to look at that type of lifestyle property.”

If Brisbane’s rate of home value growth surpasses Sydney, it will be because of increased job creation in the southeast corner of Queensland, Kusher says.

The nation’s capital will see home values continue to rise throughout 2016.

If Canberra rises up, it will be because the economy is picking up and retail trade is strong.

“We’ll start to see more housing demand coming into Canberra this year.”

Kusher says in Sydney and Melbourne, vendors still have the edge over buyers.

“The vendor position is improving in Canberra, and in most other places it is neutral. Perth and Darwin markets still favour the buyer.”

In Perth and Darwin, home values will continue to trend lower, says Kusher.

“The big reason those markets are struggling comes back to the resources sector, and how heavily reliant those markets are on that industry.

“People are leaving WA at their greatest amounts since the early 2000s – that’s all impacting and resulting on those value falls.”

Capital city winners: Change in home values

The year-on-year change in median home value growth rate for houses and units in each capital city.

Data correct as at February 29.

Melbourne – 11.1% Sydney – 9.5% Hobart – 6.2% Brisbane – 5.5% Canberra – 4.5% Adelaide – 2.8% Darwin – -2.9% Perth – -3.1%

Combined capitals – 7.6% Rest of state* – 2.2%

*Rest of state change in values are for houses only to end of January.

Top 5 in each state

The top five suburbs with the highest year-on-year change in median home value rate for houses and units in each state. Limited to suburbs with at least 10 sales during the year.

Data correct as at December 2015.

ACT

1. Garran – $942,759 – 24.9% 2. Ainslie – $863,411 – 21.8% 3. O’Malley – $1,543,018 – 21.7% 4. Fraser – $582,269 – 17.5% 5. Kaleen – $612,993 – 17.4%

NSW

1. Point Piper – $3,080,820 – 45.1% 2. Yellow Rock – $637,292 – 43.8% 3. Oakville – $1,723,781 – 43.5% 4. Kurrajong Hills – $1,260,508 – 42.6% 5. East Kurrajong – $1,175,642 – 42.1%

NT

1. Zuccoli – $476,607 – 13.2% 2. Katherine East – $407,697 – 10.2% 3. Acacia Hills – $637,734 – 6.9% 4. Katherine – $397,482 – 6.6% 5. Rosebery – $660,749 – 6.6%

QLD

1. East Deep Creek – $392,720 – 24.o% 2. Quilpie – $167,974 – 19.4% 3. Cabarlah – $617, 572 – 19.3% 4. Salisbury – $548,219 – 17.0% 5. Bannockburn – $565,985 – 17.0%

SA

1. College Park – $1,279,822 – 24.5% 2. Gawler – $337,982 – 21.0% 3. Joslin – $872,446 – 18.3% 4. Myponga – $368,927 – 16.5% 5. Leabrook – $810,980 – 14.4%

TAS

1. Sulphur Creek – $318,593 – 17.3% 2. Carrick – $328,074 – 13.0% 3. North Hobart – $446,527 – 12.4% 4. Cremorne – $418,567 – 11.4% 5. Cressy – $213,400 – 11.3%

VIC

1. Deepdene – $2,661,669 – 48.0% 2. Ashwood – $1,008,741 – 35.3% 3. Seville East – $429,728 – 33.8% 4. Glen Iris – $1,550,602 – 32.4% 5. Balwyn – $1,883,763 – 32.1%

WA

1. Dalwallinu – $263,450 – 42.3% 2. Furnissdale – $341,363 – 24.4% 3. Brabham – $437,436 – 18.8% 4. Applecross – $1,157,185 – 16.6% 5. Salter Point – $1,214,372 – 16.2%

Financial services could come under more scrutiny if Labor is elected this year.

Industry Super Australia (ISA) has announced it supports Labor’s intention to hold a royal commission into misconduct in the banking and financial services sectors if it wins the next federal election, as the government continued to defend the industry against further scrutiny. "Many Australians have suffered through the decisions of banks and financial institutions," Opposition Leader Bill Shorten told reporters at a press conference in Melbourne on Friday. “Enough is enough.” In a statement released to media later in the day, Shorten along with Shadow Treasurer Chris Bowen and Shadow Financial Services Minister Jim Chalmers said the decision to call for a royal commission was “not taken lightly – it’s been made after careful consideration over an extended period of time.” “The fact is, confidence and trust in the financial services industry has taken a huge hit over an ongoing range of scandals and high profile consumer rip-offs,” the statement said. Responding to the announcement, ISA said Labor’s call for a royal commission into the major banks and their vertically integrated businesses was justified. “Industry Super Australia is increasingly concerned that the lack of community trust and confidence in the scandal-prone banks could infect public confidence in their lines of business in compulsory super,” the group said in a statement. “Over recent weeks, months and years Australia’s major banks have faced repeated allegations and evidence of wrong-doing that has reduced public confidence in banking and finance. “Despite this, we have seen the banks consistently seek to design policy to suit their vertically integrated business models, typically at the expense of the Australian public.” A royal commission would have to consider how broadly and deeply unethical conduct exists in banks’ vertically integrated businesses, including their involvement in managing hundreds of billions of compulsory super savings on behalf of millions of Australians, ISA said. “Given compulsory super is a central piece of Australia’s long term economic and social policy, on balance the answer may be to structurally separate banks and super,” it said. The Opposition estimated the cost of a royal commission at $53 million across two years and said it would investigate banks, superannuation funds, insurance companies and credit unions. However, Treasurer Scott Morrison said there was no need for the royal commission because the sector was already adequately regulated. "I'm not saying for a second there aren't issues to be addressed – and they are being addressed and we have a tough cop on the beat in this area," he said making reference to the corporate regulator, ASIC.

Weekly rents increased by a mere 0.2% at a combined capital city level in March. Despite the monthly increase in rents, rental rates across the combined capital cities are -0.2% lower over the past year.

Over the year, Melbourne recorded the biggest increase in rental rates at 2.0 per cent followed by Sydney at 1.4 per cent, Canberra 1.2 per cent and Hobart 0.3 per cent. On the flipside, the cities to see a drop in rents included Darwin -11.5%, Perth -8.4 per cent, Adelaide -1.0%, and Brisbane with a -0.7% drop.

In its March Rental Review out today, CoreLogic RP Data analysts confirmed that the combined capital city house rents were recorded at $489 per week in March 2016 while unit rents were $469 per week. Over the past month, house rents have increased by 0.1% and unit rents by 0.4% and over the past three months, house rents rose 0.5% compared to a 0.9% rise in unit rents.

The March results show that recent rental increases are likely to be seasonal which is further highlighted by the fact rents are lower over the year. Over the past 12 months, house rents were -0.5% lower and unit rents increased by 1.5%. Research analyst Cameron Kusher said, “It is important to note that a much higher proportion of total unit stock is rented compared to housing stock.”

“We have been tracking the annual change in capital city rents since 1996 and this is the first time we have seen rental rates falling.”

“The extra accommodation supply, as a result of the current building boom, along with the recent record high levels of investment purchasing is adding substantial new dwelling supply to the rental market at a time when the rate of population growth is slowing from quarter to quarter. Furthermore, wages are increasing at their slowest annual pace.”

“Today’s results also highlight a swift easing in rental market conditions over the past year. We’ve attributed this ease to a variety of influences such as falling real wages, excess rental supply in certain areas and lower rates of population growth which have impacted on demand for rental accommodation.”

“With dwelling approvals recently at record highs, construction activity set to peak over the next 24 months and many new properties still to settle, the rental demand weakness is expected to persist. In all probability, there won’t be much scope for landlords to lift rental rates given current conditions have given greater negotiation opportunities to those in rental situation.”

While rental rates remain at record highs in Sydney and Melbourne, rents are lower than their previous peaks in all remaining capital cities. The decline in dwelling rents from peaks are recorded at: -0.9% in Brisbane, -1.2% in Adelaide, -12.8% in Perth, -0.1% in Hobart, -15.6% in Darwin and -7.4% in Canberra.

Download the full March Rental report - Click here

About CoreLogic:

CoreLogic Australia is a wholly owned subsidiary of CoreLogic (NYSE: CLGX), which is the largest property data and analytics company in the world. CoreLogic provides property information, analytics and services across Australia, New Zealand and Asia, and recently expanded its service offering through the purchase of project activity and building cost information provider Cordell. With Australia’s most comprehensive property databases, the company’s combined data offering is derived from public, contributory and proprietary sources and includes over 500 million decision points spanning over three decades of collection, providing detailed coverage of property and other encumbrances such as tenancy, location, hazard risk and related performance information.

With over 20,000 customers and 150,000 end users, CoreLogic is the leading provider of property data, analytics and related services to consumers, investors, real estate, mortgage, finance, banking, building services, insurance, developers, wealth management and government. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and geo spatial services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. CoreLogic employs over 650 people across Australia and in New Zealand. For more information call 1300 734 318 or visit www.corelogic.com.au

Disclaimer:

In compiling this publication, RP Data Pty Ltd trading as CoreLogic has relied upon information supplied by a number of external sources. CoreLogic does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever and limits any liability it may have to the amount paid to CoreLogic for the supply of such information.

Western Sydney has dominated a list of high-growth areas where buyers can get into the market for under $350,000, but outside NSW savvy buyers are looking to regional areas.

Annual growth of up to 13.2% was recorded for one and two-bedroom units in some suburbs.

With interest rates at record lows, and murmurs of a possible rate cut ahead of the May Federal Budget, more and more home buyers and investors are looking to get into the market.

Penrith is the top suburb for annual growth in the sub-$350,000 market.

With affordability a key factor for many property seekers, we took at look at one and two-bedroom units with a maximum median price of $350,000 to find out where the highest growth suburbs are.

What the numbers show

NSW suburbs’ took out eight of the top 10 spots, with Victoria claiming the other two. Cabramatta had two showings inside the top ten, with both one and two-bedroom units recording annual growth above 10%.

Penrith emerged as the top suburb for annual growth in the sub-$350,000 market. One-bedroom units in the outer western suburbs recorded annual growth of 13.2% and sell for a median price of $295,000, according to RP data provided to realestate.com.au.

Second overall was Box Hill, in Melbourne’s east, where the median price for a one-bedroom unit is $305,000. A popular suburb with Chinese investors, Box Hill saw an annual growth rate of 10.9% in the past 12 months.

In third spot was Liverpool in southwestern Sydney. One-bedroom units in the major metropolitan centre sell for a median price of $285,000 and recorded annual growth of 10.6%.

Frankston, in Melbourne’s outer southeast, claimed second spot for annual growth in units

LJ Hooker Penrith Director of Sales Steve Thomas says recent infrastructure upgrades, plus the impending construction of Sydney’s second airport at Badgerys Creek, have contributed to high growth in Penrith.

He says units are becoming a more attractive and affordable option for first-home buyers who may not be able to commit to a higher-priced established home.

“We are seeing an emotional value being put on these units,” Thomas says.

“Previously it was just investors looking at units, so it was a completely unemotional purchase.

“These investors, if they’ve taken our advice and put in a new kitchen and bathroom, are seeing a really good sale value.”

Checklist: 8 questions to ask before investing

Get out of the city

Outside of NSW, buyers are looking beyond the major capital cities with many regional centres featuring in state-based rankings.

In Victoria, the regional centres of Bendigo and Geelong both experienced annual growth of between 7.7% and 8.5% for two-bedroom units.

In Queensland, the top five performing suburbs were in all the southern city of Toowoomba, with two-bedroom units recording annual growth of up to 5.7%.

In Western Australia, Geraldton came out on top, while in the Northern Territory it was suburbs in Alice Springs that had the best showing.

Look for units with a land component, a decent-sized courtyard

Toowoomba is proving an attractive proposition for investors

Jo Chivers, CEO of property development company Property Bloom, says regional areas offer a number of great options for those looking for units.

“Units are in demand in regional areas, usually by renters – older people wanting to downsize or young people looking for something small,” she says.

“Single parents are also quite a big part of the rental market for these types of properties.”

Chivers says in regional areas buyers should look for units close to the CBD, walking distance from schools and on local bus routes.

“Look for something with a land component, something that does have a decent-sized courtyard. People do like to have a bit of land.”

Top five suburbs by state

Rankings are based on a maximum median price of $350,000 and are for units with one or two bedrooms. Listed by suburb, unit type, annual growth, median price.

NSW

Penrith – 1bd – 13.2% – $295,000 Liverpool – 1bd – 10.6% – $285,000 Cabramatta – 1bd – 10.5% – $256,000 St Marys – 2bd – 105% – $304,500 Cabramatta – 2bd – 10.1% – $340,000

VIC

Box Hill – 1bd – 10.9% – $305,000 Frankston – 1bd – 10.2% – $195,000 Bendigo – 2bd – 8.6% – $306,750 Geelong West – 2bd – 7.7% – $329,500 Malvern East – 1bd – 7.1% – $306,500

SA

Goodwood – 2bd – 6.6% – $326,500 North Adelaide – 1bd – 4.6% – $327,500 Port Lincoln – 2bd – 4.2% – $205,500 Mount Gambier – 2bd – 3.5% – $178,500 Plympton – 2bd – 2.9% – $290,500

QLD

Wilsonton – 2bd – 5.7% – $250,000 Toowoomba City – 2bd – 4.9% – $233,100 Centenary Heights – 2bd – 3.9% – $239,000 Kearneys Spring – 2bd – 3.6% – $262,500 Newtown – 2bd – 3.1% – $251,000

WA

Geraldton – 2bd – 3.7% – $312,500 Bayswater – 2bd – 3.2% – $329,000 Glendalough – 2bd – 3.2% – $330,000 Wembley – 2bd – 2.7%, $340,000 Rockingham – 2bd – 1.6% – $260,000

TAS

Launceston – 2bd – 3.7% – $300,000 Claremont – 2bd – 3.5% – $220,000 Ulverstone – 2bd – 1.5% – 202,500 Moonah – 2bd – 1.3% – $240,000 Newstead – 2bd – 0.8% – $190,000

NT

The Gap – 2bd – 3.4% – $342,000 Gray – 2bd – 2.2% – $348,000 Araluen – 2bd – 2% – $325,000 East Side – 2bd – 0.9% – $335,000 Gillen – 2bd – 0.9% – $308,000

ACT

Bruce – 1bd – 1.7% – $336,750

*limited data available for ACT **Data source: realestate.com.au/invest. Correct at time of publication Median Sold Price is the median price for properties sold in a given suburb/postcode in the last 12 months. This analysis is limited to suburbs which have had at least 10 sold properties in the last year for a given property type/bedroom configuration. Annual Growth Rate is calculated as the compound annual growth rate in median price, comparing the median price of property sales in the preceding 12 months to the median price of properties sold in the same 12 month period 5 years ago. This is limited to suburbs which have had at least 10 sold properties in both periods for a given property type/bedroom configuration.

Capital city dwelling values increased by 0.5% in February, however the trend in annual growth has moderated over the past seven months from 11.1% down to 7.6%.

According to the February 2016 CoreLogic RP Data Hedonic Home Value Index results released today, dwelling values across Australia’s combined capital cities showed a 0.5% rise in February, pushing dwelling values 1.4% higher over the past three months.

In February, home values rose across each capital city with the exclusion of Perth and Canberra. Over the past three months, dwelling values have increased across all capitals except Sydney (-0.2%). The largest monthly increases in home values were recorded in the cities that have been underperforming over the growth cycle to date; Hobart dwelling values were 2.9% higher, Adelaide showed a 1.9% rise, and Brisbane home values increased by 1.8%. Perth and Canberra were the only cities to record a monthly fall in values, down -1.1% and -0.2% respectively.

Index results as at February 29, 2016

Sydney was the only capital city to have recorded a fall in dwelling values over the past three months, down -0.2%. The cities to record the greatest value rises over the past three months have been: Hobart (8.5%), Melbourne (3.8%) and Brisbane (2.0%). According to CoreLogic RP Data head of research Tim Lawless, “Even though home values have trended lower over the year in Perth and Darwin, they have recorded value rises of 0.2% and 0.3% respectively over the past three months.”

Dwelling values are still increasing across most capital cities however, the results remain diverse. Sydney and Melbourne remain the strongest markets in trend terms, however, the gap is widening between the performances of Melbourne relative to Sydney.

Over the past 12 months, combined capital city home values have increased by 7.6%, with the annual rate of growth down from a recent peak of 11.1% recorded in July last year. Melbourne has maintained its number one growth position, with annual capital gains of 11.1%. Mr Lawless said, “Melbourne values appear to be holding reasonably firm since December last year with the annual rate of capital gain virtually level over the past three months.”

Sydney’s annual rate of growth has continued to moderate, having almost halved from its cyclical peak of 18.4% recorded in July last year to reach 9.5% growth over the past twelve months. Despite the slowing trend, Sydney remains the second best performing capital city over the past twelve months, however, Mr Lawless said, “a few of the smaller cities, where growth rates have recently accelerated, may start to rival Sydney’s position over the coming months.”

“The trend in home value growth is showing signs of increasing in those markets that have previously underperformed. These include Brisbane, Adelaide, Hobart and Canberra. Affordability constraints aren’t as apparent in these cities and rental yields haven’t been compressed to the same extent as what they have in Melbourne or Sydney. Home values increased in Brisbane by 5.5% over the past year, which is the fastest annual rate of value growth in a year. In Hobart, home values are 6.2% higher over the year, which is its fastest annual rate of home value growth since July 2010,” Mr Lawless said.

Download Full Report

For more information on the CoreLogic RP Data Indices contact: media@corelogic.com.au

Methodology: The CoreLogic RP Data Hedonic Home Value Index is calculated using a hedonic regression methodology that addresses the issue of compositional bias associated with median price and other measures. In simple terms, the index is calculated using recent sales data combined with information about the attributes of individual properties such as the number of bedrooms and bathrooms, land area and geographical context of the dwelling. By separating each property comprising the index into its various formational and locational attributes, differing observed sales values for each property can be separated into those associated with varying attributes and those resulting from changes in the underlying residential property market. Also, by understanding the value associated with each attribute of a given property, this methodology can be used to estimate the value of dwellings with known characteristics for which there is no recent sales price by observing the characteristics and sales prices of other dwellings which have recently transacted. It then follows that changes in the market value of the stock of residential property comprising an index can be accurately tracked through time. RP Data owns and maintains Australia's largest property related database in Australia which includes transaction data for every home sale within every state and territory. CoreLogic RP Data augments this data with recent sales advice from real estate industry professionals, listings information and attribute data collected from a variety of sources. For detailed methodological information please visit www.corelogic.com.au

Paying off the mortgage is the new Australian dream, according to new research from MLC, the Australia Today report, with almost 80% of Australians placing outright home ownership as their most important priority.

While we dream of owning our home outright, it’s our mortgage that’s become our biggest burden. MLC’s research shows that if gifted with $50,000, all Australians across social grades would put more than half on their mortgage, with the majority agreeing that their mortgage has a “big impact on my lifestyle”.

Sold…and mortgaged

So how much do homes cost, on average, and how big are our mortgages?

Alarmingly, the average annual full time salary, at approximately $80,0001 is less than one eighth of the average cost of an Australian home today at $612,200.2

In contrast to rising house prices, wages growth has remained relatively flat, so Australians are borrowing more. Figures from Australian Financial Group show that the average size of new mortgages nationally in December 2014 was $444,000. In NSW the average mortgage size was the highest at $544,000, followed by Victoria at $439,000, WA at $428,000, NT at $375,000, Qld at $374,000 and SA at $349,000.3

Most financial professionals recommend a mortgage repayment of no more than 28% of your monthly income or two/two and a half times your gross annual salary. With average new mortgages more than four times the average national wage, it’s very possible that our dream to own our home may stay that way.

Shifting expectations

Living on a ‘quarter acre block’ (1000sqm) in a freestanding house with a vegetable garden or fruit trees down the back was the old Australian dream. For many it was a symbol of post World War 2 new beginnings. Australia was the lucky country because there was land aplenty, and there was freedom – and both symbolized opportunity.

Suburbs across Australia are still lined with homes on quarter acre blocks built in the 1950 and 1960s (now being demolished for apartment blocks and modern mansions). In the 1980s, the dream adjusted to an eighth acre block (500sqm), as land opportunities were already diminishing, but still enough for a good house and yard. The ‘house and land’ became the expectation of how we, as Australians, should grow up, of how we should live.

Today, we expect to have the same as our parents did and believe that our children have a right to enjoy the same.

Laura Demasi from IPSOS, agrees. “People can’t let go of the idea that they should have a freestanding home. It’s still just within our grasp so we’re still stretching to get it. People are more likely to relocate to a different city or regional area to get the freestanding house than they are to consider moving into a unit. We’re a generation that grew up with that lifestyle and we’re not ready to give that up.”

Supply and demand factors are already challenging our expectations of how we can live. Our population is rising – from 10 million in 1960 to 24 million as of January 2016 and a predicted 28 million by 2030 – resulting in limited land availability in major cities and corresponding rising prices of existing dwellings.

Some of us were lucky enough to scrape in and enter the housing market before the recent boom, those that missed it may never live in a free standing home that they own outright. And as for our children, again as a whole, they won’t either.

If we want to pay off or reduce our mortgage and live in a major city in Australia, the only other lever to adjust is how we live. In short, our dreams must shift and are beginning to already.

The rise of apartment dwelling

For many, purchasing an apartment is becoming the only prospect for home ownership in an Australian city, with rising numbers of apartment buildings and values reflecting this shift in demand.

Recent research shows new flats and units building activity in Australia is experiencing one of its biggest booms in modern times. This category represents the most substantial increase in all construction classes with a 32 per cent increase in new projects reported in Q1 2015 from Q1 2014.4

This far outweighed more modest gains in industrial (8 per cent) and civil engineering (4 per cent). There’s also been a 58 per cent increase in the actual dollar value of new apartments projects from $ 7.6 billion in Q1 2014 to $12 billion Q1 2015.

On a state-by-state basis, in NSW from January through to March 2015, newly-reported apartment projects increased 40 per cent over the same period in 2014, with 500 new projects against 358 in 2014.

In Victoria, there were 359 new apartments in Q1 2014, with 522 for the same quarter in 2015, an increase of 45 per cent. In turn, the value of these apartments is also on the rise, with VIC values increasing 41 per cent.

A mother of two living with her husband and children aged 8 and 6, in a two bedroom apartment in Dee Why, Sydney comments: “We need to take the kids outside regularly of course, but the benefit is a smaller mortgage and we’re a ten minute walk to school and the beach. We’re involved in each other’s lives because you can’t always escape to your own space. It takes no time to clean and we have everything we need in a location we love.”

A single income – the other dream

The mortgage and home ownership are high priority but close behind is another dream – living off one income – with 77% of Australians rating this as an important priority.

This may reflect an increasing trend towards both partners working to raise children or to support today’s expanding lifestyle. With reduced pressure for both partners to work, one partner could care for children, manage the home or care for elderly family members.

Other important priorities include private health insurance (61%), university education (53%), the suburb in which you live (53%) as well as more frequent travel and renovations (both 38%).

What can you do?

Talk to your bank manager, your accountant or financial planner about how you can pay off your mortgage sooner using current income, with smart mortgage repayment strategies. Every year without a mortgage can make a big difference to your retirement savings. You can also set in place a regular household budget and stick to it.

Three in five Australians (59%) believe that being worth $1,000,000 doesn’t mean you’re rich in Australia any more, according to new research from MLC, the Australia Today report.

Further, almost half of us believe you need a household income of more than $150,000 to live ‘comfortably’ in Australia today.

The poor millionaire

Not long ago Australians believed that if you hit the million dollar mark in net worth, you’d hit the ‘big time’. We watched shows like “Who wants to be a millionaire?” and we imagined how glittering our life would be with a million big ones.

But if a million dollars doesn’t make you rich any more, what’s changed?

MLC’s research shows that our expectations of an ‘average’ lifestyle have evolved in recent decades to include luxuries such as overseas travel, eating out regularly and having the latest technology. And we all think the average Australian should have overseas holidays yearly, be able to afford private schools as well as a decent house and car.

These extras all add up, while at the same time, house prices have risen sharply and wages growth has remained relatively flat. It’s a pressurised environment with more on the expenses side of the equation, and less on the income side.

Simply put, one million dollars just doesn’t stretch as far as it did, even one decade ago.

Our average net worth is staggeringly high

So how many of us are millionaires today? In reality, most home owners or mortgaged households aren’t far off the $1 million net wealth mark. ABS figures report the average net worth for all Australian households was $809,900 in 2013–14.

While average household wealth for households renting was far lower – at about 21% ($183,000) it’s actually higher in reality for owner occupied households with a mortgage ($857,900) and for owner occupiers who owned their home outright ($1.4 million), representing 13% of households.

But we’re not rich…or maybe just not rich enough

Whether you’re a renter, a home owner or have a mortgage, we’re faring a lot better than most other OECD countries in net wealth. There’s a lot of equity out there, but according to the research, the majority of us aren’t feeling ‘rich.’

Sixty-nine percent feel the cost of living means they’re struggling to make ends meet, while others don’t feel they’re ‘rich enough’. Thirty three percent of people earning $40-$69,000 per year aspire to greater wealth, 45% of people earning $70-$99,000, 55% earning $100-$149,000, and 71% of people earning $150,000 admit to wanting more.

Are your wealth goggles on?

It seems decades of post war good living is affecting the perspectives of the average wealthy Australian, of how everyone else lives and how they should live – let’s call it ‘having your wealth goggles on’.

The wealthy are more likely to want more and more likely to think people need more to live comfortably. They are more likely to think that luxuries are essentials. They have wealth and are more likely to want even more wealth.

Research shows that those with kids (56%), those who live in Sydney (58%) and those on higher incomes – $150-$199,000 (61%) and $200,000+ (75%) are even more likely to agree that you need a household income of at least $150,000 to have a comfortable life in Australia.

Interestingly, all of the social grades believe that there is an ‘elite class’ (believed to be around 10% of the population) earning mega bucks (over $300,000), when in reality only 10% of households in Australia have a gross annual income of $187,980 or more and only 3% of the population have a personal income above $192,000.

So what does a million really buy you?

In Adelaide, you can buy a three bedroom renovated semi-detached cottage with parking in a great location in the city, with around $250,000 change to buy that nice car you’d like to drive. In Brisbane you can buy a 3 or 4 bedroom weatherboard ‘Queenslander’, also with a few hundred thousand dollars spare; in Perth you can buy a brand new four bedroom home in the suburbs, again with a little change, and in Sydney a four bedroom renovated home an hour’s drive from the city.

You see – a million actually buys you a whole lot.

Of course, if you want to live in a big home 10 minutes from a major city or a metro beach, you may as well double or triple the cost. But in most cities, you can buy a home and a car outright and still have some money left over for lifestyle pursuits.

Financial professionals help us budget better

MLC’s research showed that those with financial professionals were less likely to live pay-cheque to pay-cheque, with 77% of people with financial planers or advisers disagreeing they wait for the next pay day.

Financial professionals can help us see our complete financial picture and help with budgeting, saving and other wealth strategies.

What can you do? Refresh your perspective

Wealthy or not, there’s a way to be more content with what you have – and that’s to see people living happier, with less.

So let’s set ourselves a challenge to refresh our perspectives.

Maybe we could take a drive a half hour away from where we live and see how we could live comfortably with a million dollars. Or maybe next time we’re overseas on that holiday, venture beyond the resort pool into a local village or suburban community. Maybe volunteer to help other less fortunate, or try a week cooking every meal at home, rather than eating out, and see what recipes we can invent.

What is a true measure of wealth? If it’s set in a future amount it’s time to adjust our perspectives on what really makes us happy: if $1 million dollars isn’t enough, will $2 million be, or more?

WHAT does the price of poultry, petrol and postage stamps have to do with your mortgage interest rate?

Plenty, and it’s more important than many people think. That’s because these goodies — along with alcohol, clothes, education and more — help make up Australia’s Consumer Price Index, which is the biggest single driver of the direction of mortgage rates.

Last month’s Australian Bureau of Statistics data put annual CPI inflation at 1.7 per cent, which is good news for property owners and investors. If inflation moves above three per cent, interest rate rises become more likely, while when it’s below two per cent there’s a bigger chance of a rate cut.

That’s because the Reserve Bank of Australia, which sets the official interest rate, aims to keep inflation between two and three per cent to, it says, “encourage strong and sustainable growth in the economy”.

It’s a bit of a crude lever, but the idea is that raising interest rates puts pressure on households to stop spending money, so businesses won’t jack up prices. Cutting rates encourages us to shell out more, accelerating price rises.

Low inflation has helped keep interest and as a result mortagage rates down. Source:Supplied

Australia’s continuing low inflation environment has allowed the RBA to keep the official interest rate steady since May last year, and RBA governor Glenn Stevens said this month that there may be scope for further cuts.

“With growth in labour costs continuing to be quite subdued as well, and inflation restrained elsewhere in the world, consumer price inflation is likely to remain low over the next year or two,” Stevens said.

Within Australia’s CPI index there are some big swings, but it balances out overall. Health, education and alcohol costs are up more than 5 per cent over the past year, but transport and communication costs fell, and clothes and food prices barely moved.

Inflation is important but it isn’t everything. To quote iconic Aussie real estate movie The Castle, it’s also about “the vibe”.

The RBA is always looking to the future, trying to predict where inflation will head and stay ahead of the game. A global shock may prompt it to act quickly, before inflation figures start changing.

Interest rates also affect the Aussie dollar’s exchange rate, which annoys travellers when it falls but is good news for just about everyone else, especially exporters and tourism operators.

Recently there have been some bad vibes coming from banks, which increased mortgage rates independently twice last year — once for investors only and then once for everyone — blaming tougher regulatory requirements.

Some forecasters believe the banks will do it again in the coming months, or at least keep some of any future RBA cuts.

While it’s frustrating for borrowers to see rates rise for no apparent reason, rest assured that they won’t keep climbing forever. Competition is too tough and customers are becoming more willing to switch lenders if they’ve got a bad deal.

That leaves inflation as your best measure for guessing where your mortgage rates will go, so keep an eye on consumer prices.

Dear Carrie,

I'm thinking of refinancing my mortgage since I know interest rates are going up. Does it still make sense or have I missed the boat?

--A Reader

Dear Reader,

Rising short-term interest rates are on a lot of people's minds these days. For savers, it's a plus, but borrowers--especially those with credit card balances--may see their payments creep up over time. However, for homeowners with a mortgage, it's a slightly different story.

While adjustable rate mortgages may be affected by short-term rate increases depending on the benchmark used to adjust the rate, fixed mortgage rates tend to be more closely aligned with the 10-year Treasury note. So, for instance, the recent increase in the short-term federal funds rate is unlikely to cause rates for a 30-year fixed mortgage to increase dramatically. Plus, even though we've seen rates inch up, when you compare today's mortgage rates to historical norms, current rates are still a good deal.

But rates aside, deciding whether or not to refinance depends on a lot of personal factors. So you first need to ask yourself some questions and look at some specifics.

What's your goal? People refinance for a lot of reasons. Do you want to lower your monthly payment? Reduce the length of your mortgage? Take out extra money for home improvements? These are important initial questions.

If decreasing your payment is a top priority and you can lower your interest rate by ½ to 1 percent, it's probably worth the effort. For instance, lowering the interest rate on a $350,000 30-year fixed mortgage by 1 percent could lower your monthly payment by about $300 a month.

On the flip side, if your goal is to shorten the length of your mortgage and you refinance that amount for 15 years, your monthly payment would go up, but you'd save a considerable amount in interest over the life of the loan.

How long will you be in the house? Refinancing usually involves paying points and fees. Points basically represent interest you pay upfront to get a lower rate on your loan. It's not uncommon for points and fees to add up to 3-6 percent of your loan. You can pay this out of pocket or, often times, add them to the balance of your loan. (One positive: points on a refi are tax deductible, amortized over the life of the loan. Should you refi again, you can deduct any unamortized points at that time.)

However you pay them, it will take time to get to the breakeven point where these additional costs are offset by the lower rates, so you have to think realistically about how long you intend to be in your home. If you plan to sell in the near future, the extra cost of refinancing may outweigh the monthly short-term savings.

How much home equity do you have? Just like with the down payment on a first mortgage, if you have less than 20 percent equity in your home, you'll likely have to pay private mortgage insurance (PMI). PMI fees can range from less than half a percent up to about 1.5 percent of your loan. While that may not add a considerable amount to your payment, if your goal is to reduce your monthlies and you have very little equity, you may want to reconsider.

Do the math As you can see, it becomes a numbers game. A good way to start is to run some different scenarios using an online mortgage refinance calculator. That way you can see how it all adds up and decide on the optimum rate and loan term for you. In this interest rate environment, it could be smart to move from an adjustable rate mortgage to a fixed--depending on the rate, of course.

Also be aware that to get the best rate, you need to have a good credit rating, so you might want to begin the process by looking at your debt ratio and paying down outstanding credit card balances.

And if you're increasing your loan balance or shortening the loan term, each of which could increase your monthly, make sure you're being realistic about your ability to handle the new payment from your income. The last thing you want to do is to shortchange your retirement savings or emergency fund for the sake of your mortgage.

For more updates, follow Carrie on LinkedIn and Twitter.

Looking for answers to your retirement questions? Check out Carrie's new book, "The Charles Schwab Guide to Finances After Fifty: Answers to Your Most Important Money Questions."

This article originally appeared on Schwab.com. You can e-mail Carrie at askcarrie@schwab.com, or click here for additional Ask Carrie columns. This column is no substitute for an individualized recommendation, tax, legal or personalized investment advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager. Diversification cannot ensure a profit or eliminate the risk of investment losses.

COPYRIGHT 2016 CHARLES SCHWAB & CO., INC. (MEMBER SIPC.) (0116-0270)

Follow Carrie Schwab-Pomerantz, CFP on Twitter: www.twitter.com/CarrieSchwab

Anyone who has even considered dipping a toe into the Australian housing market will know it can be brutal, particularly if you live in a capital city.

It's little wonder, then, people are looking for more cost-effective ways to get their foot in the (literal) door, with one of the more popular options being purchasing a property off the plan.

However, before you fall in love with a floor-plan and hand over your entire life savings, it's worthwhile reviewing both the pros and the cons of off-the-plan purchasing. Because in this game, there is just no such thing as try-before-you-buy.

1. Research your developer.

"Firstly, it's important to make sure you are buying from a reputable developer. It's well worth taking the time to make sure they have a history of developing projects similar to what you are looking to purchase," Mark Mendel, CEO of iBuyNew told The Huffington Post Australia.

"It's also important that the development is DA [development application] approved. It might sound like that's an obvious thing to check, but a lot of developers in Sydney over last 12 months have been selling without DA approval, trying to take advantage of the market. They are actually able to put a clause in the contract that allows it.

"If they aren't able to get DA approval, the contract will get rescinded and the buyer gets their 10 percent deposit back, but in the meantime that could take six months.

"So you have this expectation of buying one property, which then doesn’t get DA approval, and even though you might get your deposit back, you have missed out on buying anything in the last six months. This can be particularly damaging if the market in that time has gone up. That was a big factor at the end of last year, though now the market has softened a bit."

2. Know where your deposit is going.

"Make sure your deposit is held in a trust account," Mendel advised. "Some developers ask for money to get released to a personal name, which they can then use to help build the project. It's a big no-no and you can lose a lot of money very quickly. Make sure your money is held in a trust."

3. Understand your contract and don't scrimp on a solicitor.

"Don't be afraid to ask questions. Make sure you understand exactly what you are getting. You need to be aware of the finishes and the fixtures. While there are allowances for a developer to change them, they need to be of a certain standard," Mendel said.

"This kind of buying means it's impossible to identify exactly what you’re getting, so it's better to have an understanding of it and ask more questions.

"It's also imperative a buyer understands the contract and what they are actually signing. A lot of buyers will actually go to a solicitor or conveyancer their friends use rather than doing their own research. What they need to understand is an off the plan contract is very different, and you should ideally be using a solicitor who is very well versed in off the plan contracts, or it might even be their specialty.

"In saying that, a lot of our clients will come to us and look for the cheapest solicitor. They might want to pay $900 or $1500, but I say that's one of the most important pieces of the puzzle. This person is the answer to your legal rights, and here you are, willing to spend half a million on a property, but you're scrimping on legal advice. It doesn’t make sense to me."

4. It might take longer to finish than you expect, but that's just the way the cookie crumbles.

"The timing of settlement is more relevant to a home buyer than an investor, because obviously home buyers are keen to move into the property as soon as possible," Mendel said.

"If you are renting, don't give a notification to your landlord that you're moving out until you get a notice of settlement, which is ordinarily issued about two weeks before you are able to move in.

"These means you'll probably have a two week overlap with your rent and mortgage, which can be a good thing, as you can shop for furniture and get organised. However it's a good idea to take into account you'll be paying double for two weeks, so it's best to store some money away in anticipation of that.

"Delayed settlement is something first home buyers often complain about, and it's completely understandable, but you have to understand the developers' intention is to finish the project as quickly as possible," Mendel said.

"The construction loan is actually at its maximum time at the end, and they don’t want to be in that position. It could be the council or a builder delaying them, it's not always in their control."

So why buy off the plan?

First of all, buying off the plan gives you more time to save, which is extremely beneficial, particularly for first home buyers desperate to enter the market.

"Because you only need to hand over an initial deposit of 10 percent, you have until settlement to save the remainder," Mendel said.

"This is good for new home buyers and investors alike, as you can lock in a price at the time of purchase and enter the market without having to actually come up with the full amount straight away."

Also, if you make a wise investment, the value of your property could rise before you even get the keys.

"If I look at our clients over the past few years, they have made hundreds and thousands of dollars," Mendel said. "In particular, the Sydney, Melbourne and Brisbane markets.

"One example is some clients who bought an apartment in Campbelltown for $360,000, and it's now selling for $490,000 just two years later.

"We've seen significant market growth in the last three years in Sydney, and we expect to see the same over the next three years in Brisbane. Regional areas like Gosford and high-infrastructure areas we also predict will do well.

"Melbourne tends to stay fairly steady, whereas Sydney and Brisbane have market cycles. For those hedging their bets, Melbourne seems to be a steady ship."

For those picky with their preferences, buying off the plan also affords the (rare) opportunity to get first dibs on an apartment of your choice.

"One very attractive factor is you get first selection," Mendel noted. "When you look at buying a property off the plan, it's the only point in time you get an actual choice at buying your favourite apartment within the development. That’s a big factor.

"Typically developers will put prices up as they come closer to completion, but if you get in early, you can get your dream apartment at a competitive price, which is definitely an advantage."

A new report has provided valuable insight into the expectations of consumers and the value they place on broker services.

In partnership with Genworth and RFi, NAB Broker surveyed 1,000 consumers across two key stages of the buyer's cycle: those who intended to apply for a home loan in the next two years (either via a broker or direct); and those who had taken out a loan through a broker in the past two years.

Explaining the motivation behind the report, Engaging consumers and empowering brokers: Essential knowledge on today's lending market, NAB Broker General Manager Steve Kane explained that, "We commissioned this report with the aim of providing unique insights to brokers around how their customers perceive them and what drives them to build a long-term business relationship with their broker.

"We hope it will serve as an important resource to brokers when they are looking at where they can add value in the customer experience, how to better engage with clients and prospects, and where to focus their marketing efforts," he said.

The results showed that the sentiment among consumers who had used the services of a broker was positive, with 65 per cent of broker applicants responding that they would use a broker again and 73 per cent stating that they would use the same broker. This is a key sign of the importance of building relationships with clients.

While 35 per cent of aspiring home buyers said they were unlikely to use a broker, this was because they simply hadn't considered it. Rather than being a negative, this figure shows that consumers still need more information on what a broker can offer. Other reasons for not approaching a broker included a belief that they could get a better deal by going direct to a lender.

If brokers are able to increase awareness of the benefits of working with them and the breadth of products they offer, they are likely to grow their business. The survey results showed that 49 per cent of broker applicants sourced their broker through personal referral, meaning word of mouth is still the most powerful advertising source for brokers.

However, in today's competitive market it's not just about providing good service. Brokers need to invest time in understanding their target client's behaviours, how they prefer to work and the services they place most value on. With 43 per cent of applicants shopping around before settling on a broker, it pays for brokers to show from the outset that they view every client as an individual, with a unique set of needs. A truly telling result from the survey was that what is most important to consumers is a personalised service, with 26 per cent of broker applicants choosing their broker because they liked the individual with whom they dealt.

Question: I’m thinking about purchasing my first investment property – where do I start? Answer: By Carolyn Parrella, Executive Manager, Terri Scheer Insurance

For a first time property investor, there are numerous things to consider that could potentially make or break your investing experience. Before making the commitment, consider consulting with a financial expert or adviser. The following tips may also help when you decide to take the plunge. Identify your target tenant Consider who your ideal tenant would be and their needs. Families with children or pets need space to play and unwind, therefore a free-standing house with a moderate sized and fenced backyard may be suitable. Fenced properties are generally more child-safe, and if your property is also pet-friendly, there is potential to increase your appeal to target tenants. Units and apartments can be desirable properties for a range of potential tenants including students, young professionals, couples and retirees. Consider a unit in the inner suburbs that is close to university for students, close to the central business district for young professionals and couples and not far from public transport and health centres for the elderly or retired. Holiday homes attract a unique type of tenant, while offering the prospect of higher rental returns than traditional properties. Landlords may also find this type of property appealing as they may be able to stay in the home while it is unoccupied. Get your facts straight. Regardless of whether you purchase a new or established property, it may be worthwhile enlisting the services of an authorised building inspector to uncover any hidden-nasties, such as termites, salt damp and other inconspicuous damages. While this comes at a cost, recognising these issues before it’s too late can potentially save you thousands of dollars. If you’re investing for rental income, seek professional realty advice before purchasing a property to ensure that it has the potential for sufficient rental income to cover your expenses. Your investment may be a lost cause if it doesn’t make you any money. Setting the rent too high may make it difficult to find a tenant, while setting the rent too low may place you under financial pressure, limit your rental income and potentially attract unsuitable tenants. Finding the time Investing in property involves significant financial commitment, as well as regular dedicated time and effort – both of which can be limited. The benefits of appointing a property manager can potentially outweigh the costs of appointing one. A good property manager can help find suitable tenants, using their wealth of experience and a list of pre-approved tenants. Similarly, some property managers have access to a database which lists tenants with a history of defaulting on rental repayments, damaging property and eviction. Property managers can also ensure all the required procedures take place, such as conducting property inspections, collecting rent and liaising with the tenant on behalf of the landlord for maintenance issues and the like. If you choose to self-manage your property, it may not be realistic for you to be able to attend to maintenance issues promptly. Delayed maintenance may lead to increased repair costs, poor professional relationships with tenants and susceptibility to legal liability claims if the tenant or their guest is injured as a result. Appropriate insurance cover Help to protect your investment property by considering the benefits of a specialised form of landlord insurance. A sound insurance policy should cover landlords for both malicious and accidental damage, their legal liability, and potential loss of rental income. A standard building and contents insurance policy generally won’t cover landlords for these risks. Check your insurance policy and seek professional advice to ensure you have the appropriate coverage. It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan.

Will you be better off?

If you are struggling to manage your debts, it may sound like a good idea to pay someone to fix your credit problems and roll all your loans into one loan. Here we explain what to consider before you refinance your loans and how you can get help for free.

Consider other options before you refinanceCheck the debt consolidation loan is right for youAvoid refinancing trapsGet free debt help

Consider other options before you refinance

Consolidating or refinancing loans can work for some people if it means they will pay less in fees and interest. For others, it may only be a short-term fix, especially if they can't meet the repayments on the new loan.

Before you refinance or spend money paying a company to help you with your debts, there are things you can do.

Talk to your credit provider

If you are struggling with your repayments, try to come to a new arrangement with your credit provider. See trouble with debt for information on how to do this.

Switch home loans

Changing home loans could save you money, but you need to be careful. Some mortgage brokers or lenders make a commission if they persuade you to switch loans. They may make misleading claims about how much you might save, just to sell you the new loan. See switching home loans for more information.

Sell your home

You may be better off selling your home if you are struggling with mortgage repayments. It is better to sell your home on your own terms than for the credit provider to sell it as a mortgagee sale. You may even end up with money left over to repay other debts.Read more from SmartMoney here..

A key indicator for reporting property market conditions across Australia’s capital cities is rents. The CoreLogic RP Data rental review distributed each month and released today covering October rental market activity provides a deep-dive analysis into the impact rental rates may or may not be having on capital city property markets.

The October analysis shows rents across the combined capitals were virtually unchanged in October, down by -0.1% over the month, with rents lower in four of the eight capital cities. The annual rate of change has increased slightly from 0.5% in September to 0.6% in October.

CoreLogic research analyst Cameron Kusher said, “The data points to an ongoing softening of rental growth, particularly throughout this year. With just two months remaining to year’s end, it seems that rental growth will be very soft over 2015.”

“The construction boom across the capital cities, coupled with slowing population growth, low mortgage rates and the recent heightened level of activity from investors are the major contributing factors to the slowing rental growth.

“Sydney, Melbourne and Brisbane continued to record rental rises over the past year however, each city is seeing a slowing in the pace of rental growth relative to 12 months ago. Clearly, the increase in investment stock is providing landlords with little scope to lift rental rates while the low mortgage rate environment provides little incentive to push yields higher,” Mr Kusher said.

National Overview:

Dwelling rental rates across the combined capital cities are recorded at $483 per week and they have increased by just 0.2% over the first ten months of the year while they have risen by 0.6% over the past 12 months. Weekly rents across the combined capital city measure fell by -0.1% in October however, on an annual basis they recorded a slight rise taking annual rental growth to 0.6%.Only Sydney and Melbourne have recorded rental increases greater than 2% over the year.Rents have fallen over the year in Perth and Darwin, while the remaining capitals have seen rents rise by less than 2% over the year.Currently combined capital city rental rates are $487/week for houses and $463/week for units.It is anticipated that the rate of rental growth will continue to slow over the coming months due to increased supply of housing and rental stock and slower migration rates.

Looking across the individual capital cities, over the past year, Sydney and Melbourne have recorded the greatest increases in weekly rents. Over the past month, weekly rents have moved lower across every capital city except Sydney, Hobart and Canberra where they rose and in Melbourne where they were unchanged. Over the past three months rents are lower in all capital cities except for Sydney and Melbourne.

Rental Index results as at October 31, 2015

ENDS.

Download the full October Rental Review - click here

For additional inquiries contact: media@corelogic.com.au or mitch.koper@corelogic.com.au. Contact: 1300 472 767

© 2015 Copyright RP Data Pty Ltd, Local, State, and Commonwealth Governments. All rights reserved. No reproduction, distribution or transmission of the copyrighted materials in this publication is permitted whether in whole or in part.The information provided in this publication is current as at the publication date only.

More lenders are following the lead of the country’s biggest banks by raising the rates of their variable home loans out-of-cycle.

Fifteen more lenders have recently announced increases of up to 0.20 percentage points to take effect soon. Citibank’s increases are already in effect. Bank of Queensland and CUA were the most recent additions to the growing list of lenders on the variable rate hike bandwagon, having announced their increases on November 4. Their standard variable home loan rates are set to increase by 0.18 and 0.13 percentage points, respectively. CUA additionally announced a 0.14 percentage point drop to one of its home loan products but raised the rates of eight other products. The average rise in variable home loan rates was 0.17 percentage points. Westpac, Macquarie Bank, Citibank, and ME Bank all have the biggest increases of the pack, at 0.20 percentage points. The increased rates mean an additional $33 per month to a $300,000 mortgage. Bessie Hassan, consumer advocate for finder.com.au, noted that these hikes are only going to put more pressure on numerous households who are preparing for upcoming holiday expenses. “It’s clear that the Reserve Bank is having less of an impact on interest rate movements so there’s no point for borrowers to wait for a cash rate cut and expect lenders to follow. However, the silver lining is that there are hundreds of home loans out there and many smaller lenders are offering very competitive deals,” Hassan stated. Hassan urged all borrowers to carefully shop around for home loans, or even ask their lenders for a better discount, before the rate hikes come into effect.

Lender Standard variable rate rise New standard variable rate Effective date

Adelaide Bank 0.12% 5.68% November 20, 2015

AMP Banking 0.18% 5.72% November 20, 2015

ANZ 0.18% 5.56% November 20, 2015

Bank of Queensland 0.18% 5.74% November 20, 2015

Bankwest 0.18% 5.65% November 17, 2015

Bendigo Bank 0.12% 5.68% November 20, 2015

Citibank 0.20% 5.94% October 30, 2015

Commonwealth Bank 0.15% 5.60% November 20, 2015

CUA 0.13% 5.06% November 24, 2015

Macquarie Bank 0.20% 5.70% November 20, 2015

ME Bank 0.20% 5.08% November 20, 2015

NAB 0.17% 5.60% November 12, 2015

St George Bank 0.15% 5.69% November 20, 2015

Suncorp Bank 0.16% 5.70% November 20, 2015

Westpac 0.20% 5.68% November 20, 2015