In an article for the website Property Update, Michael Yardney sheds light on few reasons why Australian property prices may remain perennially high (well, almost perennially!).
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Cash Flow Versus Capital Growth
The reason why the negative gearing debate remains unsolved is because “capital growth or cash flow?” is a crux question which is actually very difficult to solve. In an article for the website Property Update, Michael Yardney adds further value to the subject.
Gap in Median Price of Houses and Units
An article on the website The Adviser puts focus on how the gap in prices of detached houses and units have risen in an unprecedented way in 3 capital cities wherein it is non-existent in a fourth capital city. In Canberra, Sydney and Melbourne, the hiatus has never been greater. Median Unit prices in Canberra, Sydney and Melbourne are 70.1%, 71.7%, and 74.2% of their house prices respectively.
Cash Rate Further Down
An article on the website The Advisor talks about how top banks of Australia have passed on in full the benefits of the further cash rate cut made by the RBA.
Among other financial entities, The Rock has declared to bring down its variable loan rate to 5.94% while My State proposes to bring it down to an even cheaper 5.64%. Certain loans having an LVR of less than 80% and a sanction amount of more than $100,000 will find interest falling as low as 4.54%.
You can read the original article here.
Retain Negative Gearing Says Real Estate Body
An article on Your Investment Property sheds light on the request made by the Real Estate Institute of Australia (REIA) to the government to retain negative gearing. The supply-side pipeline is aided decisively by negative gearing and capital gains tax discounts and this can be marathon help in times of chronic undersupply of houses.
Banks Respond to RBA’s Rate Cut
Banks are making cuts in variable loan rates, one-year fixed rates and three-year fixed rates, among other things, as a knee-jerk reaction to the Reserve Bank’s decision of a further 25 basis point cut. The banks are borrowing at a lesser cost in the fixed-rate market and they are more than glad to transfer the savings to the customers.
ME Bank has kind of pioneered the rate revision, what with its five-year fixed home loan rates coming down by 120 basis points, three-year rates by 56 points and one-year rate by 20 points.
You can read the original article here.
