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Prolifically growing property markets of Sydney and Melbourne have steadied in the month of November. Experts think it is nothing unusual and these high-performing capital cities may just have peaked. An article on the website Real Estate Business observes the trend.

Compared to the annual value growth rate of 12.5%, Sydney has recorded 0.9% growth in November. This however does not imply that the “cynosure” city will not witness further growth. It is just that we may not find those really big numbers for Sydney for some time, now that it has apparently peaked.

You can read the original article here.

Venessa Paech, in an article for the website realestate.com.au, observes how fixed rates have picked up over the last couple of months. More than 50% of four year and five year fixed rate loans have witnessed a hike. Nearly one-third of three year fixed rate loans have also seen an upward adjustment. Interestingly, one year fixed rate loans have held their ground or have even fallen by whiskers.

Such adjustments are likely to precede cash rate hikes. Buyers are advised to see the larger picture and budget for interest rate hikes when they calculate their mortgage liabilities. Paech gives an instance where she says that a hike of one basis point (0.25% percentage point) can increase the monthly mortgage by $45 for a $300,000 home loan.

You can read the original article here.

Do you think splitting the loan liability between “fixed rate” and “variable rate” can work better?

New dwelling constructions have got a shot in their arm, thanks largely to NSW and WA. At a time when chronic housing shortage is a topic for heated debates, an 11% hike in dwelling constructions nationwide is surely a cause for celebration. Venessa Paech for the website realestate.com.au observes the trend.

We will however do well, says Paech, not to jump to erroneous conclusions. Truth be told, the whole nation is not displaying momentum. In fact, if you leave out NSW and WA, the remaining parts of the country have together exhibited only 1% spurt in new constructions. NSW’s figures (31% growth) compensates for the overall weak performance considerably.

You can read the original article here.

By when do you think we will have enough houses to meet the chronic shortage (especially in capital cities)?

Finder.com.au warns borrowers who have sought fixed rate home loans. In an article for the Property Update, Michael Yardney (guided by the findings) cautions how the low fixed rates can entice you towards them only to fleece you with the very high revert rate once the fixed rate period ends.

Loans may revert to as high as 1 percentage point after the end of fixed rate tenure. Yardney quotes the example of the average three-year fixed rate loans which stand at 5.07%. It is still bearable once the rates revert to 5.51% after the stipulated three years. However, in many cases, as is witnessed for the 4 major banks, the rates revert up to 6.19%- now that is exorbitant!

You can read the original article here.

What do you make of the shrinking gap between fixed and variable rates? Do you take it as a sign of expected stability in interest rates?