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LMI Insures Lenders, Not Borrowers

January 17, 2014

lender's mortgage insurance Lender’s Mortgage Insurance (LMI) is there to cushion the lenders and not the borrowers, says Stefanie Garber in an article for the website Smart Property Investment. It is well known that borrowers availing more than 80% succour (of property value) from banks need to get an LMI cover.

This cover, however, aims to indemnify the lender against borrower default. While it is true that the LMI does help the lender/bank cover his/its losses in case of Foreclosure, the insurer asks for the same amount from the defaulting party (homeowner).

This said, the LMI certainly helps buyers fetch property in a coveted area for a very small deposit fee, and then win through its capital gains.

You can read the original article here.

Do you think the premium of LMI is stiff for first home buyers?

Hike In Dwelling Approvals Is Welcome News

January 16, 2014

Consider Michael Yardney an optimist when it comes to predicting about the property market in the year 2014. In an article for the Property Update, Yardney takes us through the welcome hike in dwelling approvals.

The private sector has recorded an 18% increase in approvals and it just goes to prove that the government’s move to infuse life into the construction industry through reduced cash rate seems to be working.

New home sales have shot up by 7.5% during November 2013. This includes a rise of nearly 30% for multi-units and 3.6% for detached houses. September-November exhibits a hike in new home sales for all 5 surveyed states.

You can read the original article here.

How do you see first home buyers performing in Q1 of 2014?

Construction Industry On the Move

January 14, 2014

Continued environment of low interest rates has provided expected succour to the construction industry. For the December 2013 quarter, house and unit constructions have witnessed a degree of hike, unprecedented in the last 8 years. An article on the website Smart Property Investment observes the trend.

Even more worthwhile is the fact that the construction industry has entered an expansionary mode after 4 consecutive years of contraction. Apart from being great news for the residential and commercial construction sector, the trend should also augur well for the manufacturing and service industry.

You can read the original article here.

Do you think we can make a headway soon in regards to the chronic housing shortage?

Housing Demand Likely To Come Down To Sustainable Levels

January 10, 2014

The price of detached houses in Sydney rose by 15.2 % whereas unit prices spiked by 11.6 % in the year 2013. This, however, does not deter analysts from believing that the kind of mini boom that Sydney has witnessed lately might fritter out from here on. An article on the website news.com.au discusses the situation.

Analysts feel that pent-up demand due to low supply had pushed housing demand so high. Moreover, the hike was not that high in ‘real’ terms because it succeeded a few cycles of fall. There is a widespread belief amongst people in the know that growth will be pretty modest in the year 2014 and will most likely close in on 5-6% instead of the really ‘unsustainable’ 12-14%

You can read the original article here.

Do you see unit growth outpacing growth of detached houses frequently from here on?

Demand For Fixed-rate Home Loans Surprisingly High

January 9, 2014

Barring NSW, which has witnessed a drop of 0.58%, each state has recorded a hike in the percentage of fixed-rate home loans written (comparing December against November). For the month of December, Fixed-rate loans contributed 33.06% of total home loans written and this figure is highest since March 2008. An article on the website The Adviser throws light on the subject.

Perhaps the trend is attributable to the fact that the Reserve Bank is playing its card very cautiously and in the present environment, people are opting for “certainly in repayments” above anything else.

Surprisingly, the percentage of fixed-rate home loans written is showing growth despite the fact that lenders across the spectrum have increased their fixed rates, anticipating a cash rate hike.

You can read the original article here.

Till when do you foresee cash rate keeping steady at 2.5%?

Houses And Units Engage In A Keen Tussle

December 3, 2013

There is something really nice going for the unit apartments but for the moment they will have to contend with the fact that detached houses have outperformed them. Data furnished by the Property Pulse (RP Data) exhibits that detached houses have grown in value by 8.2% in comparison to units’ value growth of 5.9% (over 12 months to October 2013). An article on the website Real Estate Business observes the occurrences.

Detached houses have a big asset on their side- the value of underlying land, something which is clearly not the case with units. This being said, five-year figures in recent past have shown a keen tussle between the two types of dwellings.

In fact, the statistics pertaining to growth in values for November 2008-November 2013 suggests that units (4.0% p.a) had outstripped detached houses (3.7% p.a) by 0.3%. Having said this, it merits a mention that detached houses had outperformed units in both the previous five year phases; 1998-2003 and 2003-2008.

In coming times, units may become more prominent, especially as affordability becomes a big question mark for detached houses and CBD-centric urban living becomes more desirable.

You can read the original article here.

Do you think changes to the strata by laws may affect older units?

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