RBA leaves interest rates unchanged – 3 Nov 2015

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Today, 3 Nov 2015, the Reserve Bank of Australia left the cash rate unchanged

There had been much speculation that the recent increases in the interest rates of the big four banks had left the door open for a cut to the cash rate by the RBA. However, the RBA left the cash rate unchanged at 2% for the sixth month in a row.

Some had believed that the increases between of 0.15% and 0.2% by the major Banks and other lenders would reduce property price increases in Sydney and Melbourne enough to enable the RBA to cut the cash rate to further stimulate other areas of the Australian economy but no cut to the cash rate was made today.

Naturally, the property market, particularly Sydney and Melbourne featured in the Statement by Glenn Stevens, Governor: about the RBA’s Monetary Policy Decision as did the changes in mortgage rates and the impact that they are having in controlling risk in the property market and impacts on spending and the wider economy.

Glenn Steven’s statement concludes:

class="x-blockquote" >At today’s meeting the Board judged that the prospects for an improvement in economic conditions had firmed a little over recent months and that leaving the cash rate unchanged was appropriate at this meeting. Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand. The Board will continue to assess the outlook, and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.Glenn Stevens

 

Commentary

The statement by Glenn Stevens about the decision to leave the cash rate unchanged also provide insight into possible actions of the Reserve Bank of Australia in the near future. We can interpret that “scope for further easing of policy” means that, although the cash rate was not cut today, it is very likely that it will be cut in the near future! This is the clearest signal in months that the RBA will make a cut in the near future. With the housing market price gains and banking risk under control it appears that there are few reasons left to refrain from cutting the cash rate. Unless inflation measured by the consumer price index (CPI) increases soon an interest rate cut seems inevitable.

Markets and analysts have also interpreted this as a future cut with interest rate pricing around the possibility of a third cut in the current cycle, in February, increasing to 100 per cent.

Mortgage Broker Oak Laurel By Dr Nigel Abery (Ph.D.)

 

Hoping for a cut to the cash rate to reduce your mortgage payments?

A cut to the cash rate may have reduced your mortgage repayments, that is if your bank passed it on! Why not see what else is available from the lenders out there?

 

 

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Commercial Property Finance Brokers

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Commercial Property Finance Brokers

Oak Laurel has specialist commercial finance brokers that can assist you with your commercial property finance requirements. We have a wide network of banks, non-banks and private lenders that we can access to meet your funding needs.

We we can arrange both small and large amounts of funds. Most Australian residential, commercial, or industrial property is acceptable as security.

Obtaining the right commercial property loan facility that meets your needs can be complicated. Each lender has their own criteria, policy, guidelines and pricing and will evaluate your loan application differently. Navigating through the system does not have to be overwhelming. Our team of commercial finance brokers are very experienced with helping clients to prepare a loan applications that get approved. Our commercial finance specialists can work with you to structure finance that meets your circumstances and objectives. We will negotiate with the lender on your behalf to secure you a competitive loan package. We will guide you through the entire process.

Ask us about your commercial loan options.

 

Commercial property loans

Find out what you need to know and contact us about getting assistance with your commercial property loan. Talk to a commercial finance specialist.

Property development funding

Contact Oak Laurel about funding your property development project. Get specialist property development finance advice.

 

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Foreign investment in Australian commercial property at record high

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Foreign investment in Australian commercial property at record high

Analysis by CBRE has shown that in the September quarter, foreign investors accounted for 56% of the $8.6 billion worth of Australia’s commercial property sales. This is reportedly the highest percentage of foreign buyers in the 10 years of data that have been tracked.

It is thought that the foreign buyers have increased the total sales in the September quarter 8.5% higher than at the same time last year.

Chinese investors are responsible for the majority of the offshore purchases.  The increases of Chinese capital had been initially driven by private investors and developers. However, major institutional investors are also getting involved in the Australian commercial property market. Chinese investors are focusing on major gateway cities such as Melbourne and Sydney.

Major Australian commercial property acquisitions in the quarter include the Chinese sovereign wealth fund China Investment Corporation (CIC) paying almost $2.5 billion for a portfolio of office tower assets sold by the Investa Property Group in what is Australia’s largest ever direct office sale.  The owner of the $8.9 billion Investa platform, Morgan Stanley Real Estate Investing, announced that it has sold the property it owned through Investa.

Singapore’s Ascendas Real Estate Investment Trust was another significant investor during the period, having snapped up a portfolio of 26 logistics properties from GIC in a deal valued at $1.01 billion.

The net investment position of offshore investors now totals $24 billion.

 

Need commercial property finance?

Oak Laurel finance brokers can assist you to finance your next commercial property purchase. Get expert advice from a commercial finance professional. Find out more about commercial property loans here:

 

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Victoria has Australia’s fastest growing population

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Victoria has Australia’s fastest population growth

The latest data released by the Australian Bureau of Statistics has shown that Victoria’s population is growing at the fastest rate in the country.

Victoria had a growth rate of 1.7%, gaining an additional 97,500 citizens in the year to March 2015.  New South Wales and Western Australia has the next highest population growth at 1.4%. See below for the population growth rates of other States and Territories reproduced from ABS data.

 

Population at end Mar qtr 2015

Change over previous year

Change over previous year
PRELIMINARY DATA

‘000

‘000

%


New South Wales

7 596.6

101.2

1.4
Victoria

5 914.9

97.5

1.7
Queensland

4 766.7

61.1

1.3
South Australia

1 696.2

13.9

0.8
Western Australia

2 587.0

35.3

1.4
Tasmania

516.1

1.5

0.3
Northern Territory

243.8

0.5

0.2
Australian Capital Territory

389.7

4.8

1.3
Australia(a)

23 714.3

316.0

1.4


(a) Includes Other Territories comprising Jervis Bay Territory, Christmas Island and the Cocos (Keeling) Islands.

 

The majority of population growth occurs in Australia’s capital cities.

The Australian Bureau of Statistics has projected that Melbourne’s population will exceed Sydney’s by 2052 on two of the three scenarios modelled.

Under the “high fertility, overseas migration and life expectancy” scenario, Melbourne’s population would be 9.193 million by the middle of the century and Sydney’s 8.431 million.

Under the “medium fertility, overseas migration and life expectancy” scenario, Melbourne’s population would be 8.162 million, and Sydney’s 8.124 million.

Under the “low fertility, overseas migration and life expectancy” scenario, Melbourne’s population would be 7.353 million and Sydney’s 7.716 million.

Whether or not Melbourne becomes Australia’s largest city by 2052, one thing is clear, all of those people coming to Melbourne are going to need somewhere to live. The demand for housing in Melbourne is going to continue to increase and so are the prices of well located property.

 

Need finance?

Do you want to take advantage of the property market in Australia fastest growing State? Ask one of our mortgage brokers about your finance options.

 

Call us:

+614 30129662

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Melbourne is Australia’s hottest property market – Oct 2015

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Melbourne is now Australia’s hottest property market – October 2015

Data shows that Melbourne is now Australia’s hottest property market! Up until recently Sydney was Australia’s hottest property market. There are now indications that Sydney is coming off the boil and Melbourne has become the hottest property market!

What give you that idea you may ask. Well it is all in the data!

Auction clearance rates

Auction clearance rate are in indication of how ‘hot’ a property market is. The greater then clearance rates, usually the greater the gains seen in property prices. When the market is hot, vendors / sellers like to sell their property at auction. High auction clearance rates mean that bitters are reaching the property reserve prices and in many cases can exceed the reserve price by a large margin as buyers are willing to bid extra so that they don’t need to try again at the next auction and face paying even more at a later date.

Currently, the number of properties going to auction is the highest in Melbourne with over a thousand properties going to auction in a week according to Domain.com.au.  With all those listing you might expect that the clearance rate goes down due to competition between properties on the market but the auction clearance rate was the equal highest in Melbourne and Adelaide. However, Adelaide only has a hundred or so auction in a week so a high clearance rate is not that indicative of a hot market when so few properties are being put for auction.

Sydney has had a good run but now the auction clearance rate is down from previous highs and lagging behind Melbourne’s. This does not mean that Sydney is dead, with around a 70% auction clearance rate, it just means that it is lagging behind Melbourne.

Property price index

According to the Core logic RP data home value index in the past couple of weeks Melbourne has been hitting new price highs each day. Other  cities have been behind their past price highs. This may only be a rough measure but where consistent gives an indication of where the gains are being made.

Individual property sales

Though not much can be gained from individual property sale prices, it can give some indication of the trend. For example last Saturday a property in Mount Waverley in Melbourne’s south east, a suburb attracting buyers for proximity to amenities especially good schools, sold for $6 million. The block was large and there was speculation that it was for redevelopment but even so if that is an indication of the land price then the land prices are appreciating quickly in Mount Waverley and surrounding suburbs.

 

Conclusion: Melbourne is the hottest property market and has good long term prospects

With Melbourne headed to be Australia’s largest city I guess that it is no surprise that there is a lot of interest in Melbourne’s property market. With more and more people moving to Melbourne, more than any other Australia city, the interest in well located Melbourne property is only likely to continue in the future.

 

Mortgage broker

Want to talk to a mortgage broker about financing a Melbourne property? Talk to one of Oak Laurel’s professional mortgage brokers about your loan options.

 

Call us:

+614 30129662

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Construction approvals yo-yo with large apartment developments

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Construction approvals up and down with large apartment developments

New residential dwelling construction approvals are down in August 2015 after a high level of approvals in July.

Statistics from the Australian Bureau of Statistics on building approvals, showed that over the month of August 18,701 dwellings were approved for construction. This is down by  6.9% from the previous month of July.

Apartment approvals accounted for most of the decrease, with a 11.4 per cent fall. Private sector house approvals actually rose by 4.9%.

The level of building approvals has been up-and-down in recent months. The 6.9% fall in August comes after a 4.2% increase in July, a 5.2% decrease in June, a 2% increase in May, and a 5.2% decrease in April.

The increase in July was mainly attributed to the approval of large apartment development projects. The level of approvals excluding houses in July was up 6.1% from the previous month.

 

Property development loans

Need finance for a large property development project? Find out about property development finance here:

Construction loans

Building your own home or undertaking a small development? A construction loan may be an option. Find out about the construction loan process, lender conditions and more here:

 

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Loan to Value Ratio LVR – why is my home loan LVR important?

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Loan to Value Ratio (LVR) – is it important for my home or investment property purchase finance or refinance?

Mortgage Broker Oak Laurel by Nigel Abery (PhD), Principal Mortgage Broker at Oak Laurel.

What is LVR?

“LVR or LTV is the acronym for loan to value ratio. Loan to value ratio is the finance or banking term used to describe the ratio between a loan (or mortgage) and the asset being held as security against that loan. Loan to value ratio is usually described as the loan as a percentage of the asset value.”

Why is LVR important?

The Loan to value ratio of your home or investment property and mortgage is important when the bank or lender assessed your loan application (including when you are taking out a new loan or refinancing your existing loan). Banks and lenders consider that the greater the proportion of the property that is being borrowed (up to a certain point) the the higher the risk  that they will not get their money back in the event of the borrower defaults on the loan. Generally banks and lenders will allow up to 80% of the property price to be borrowed by PAYG employees without requiring lenders mortgage insurance. Lenders mortgage insurance can cost you (the borrower) thousands of dollars and it insures the bank against you not paying the loan.

Some lenders will also self insure for some borrowers that they consider low risk. Certain banks and lenders consider your profession as a criteria in assessing risk and will waive the lenders mortgage insurance requirements for certain professionals.

The type of property you are borrowing for can also influence the loan to value ratio that the bank or lender will accept. For example if the property is an farm greater than 150 ha many banks will not lend more than 70% of the property value.  Also, recently some banks consider different suburbs as higher risk and will only lend to 70% or 80% of the property value in those suburbs.

 

See more here about: How to calculate your Loan to Value Ratio

 

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High risk suburbs that require bigger deposits for NAB

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High risk suburbs that require bigger deposits for National Australia Bank (NAB)

National Australia Bank (NAB) has released its list of suburbs it considers as higher risk and where it will apply tighter lending restrictions requiring larger deposits.

NAB has two suburb risk classifications: Group A and Group B.

Group A contains “areas where significant deterioration in credit risk has been observed”. Lending by NAB in these suburbs will be limited to 70% of the property value (70% Loan to Value Ratio – LVR). Many mining towns in Western Australian and Queensland are in this group.

Group B areas are deemed to pose less immediate risk, although they are “areas which are exhibiting characteristics which may indicate future deterioration in credit risk”. Lending by NAB to these suburbs will be limited to 80% of the property value (80% LVRs). Many Sydney suburbs and the Central Business Districts of Sydney, Melbourne (CBD, Docklands & South Bank), Adelaide, Perth and Brisbane are on this list.

The full list of NAB’s classified higher risk postcodes is below:

Group A – 70% Loan to value ratios maximum from NAB in these areas

Western Australia:

6390 Bannister, Boddington, Crossman
6429 Boorabbin, Bullabulling, Collgardie
6436 Menzies, Ularring
6437 Leinster, Sir Samuel
6438 Leonora, Lake Darlot
6440 Bandya, Beadell, Cosmo, Newbery
6442 Kambalda East, Kambalda West
6642 Angelo River, Capricorn, Karalundi
6646 Wiluna, Lake Carnegie, Little Sandy Desert
6710 Cane, Onslow, Peedamulla, Talandji, Yannarie
6713 Dampier Archipelago, Dampier
6714 Atonyymyre, Balla Balla, Banynton
6716 Pannawonica, Fortescue, Hamersley Range, Millstream
6718 Roebourne, Whim Creek
6720 Cossack, Point Samson, Wickham
6721 Indee, Mundabullangana, Pardoo
6722 Boodarie, De Grey, Finucane, Pippingarra, South Hedland
6751 Chichester, Innawanga, Juna Downs
6753 Newman
6754 Paradburdoo
6758 Nullagine
6760 Marble Bar

Queensland:

4210 Guanaba, Maudsland, Oxenford
4211 Advancetown, Beechmont, Binna Burra
4680 Gladstone
4717 Blackwater
4720 Emerald, Yamala
4740 Mackay Region
4743 Suttor, glanden
4744 Moranbah
4745 Dystart
4746 May Downs, Middleount
4805 Bogie, Bowen, Gumlu

Northern Territory:

0885 Alyangula

South Australia:

Olympic Dam, Roxby Downs, Roxby Downs Station

Tasmania:

7155 Kettering
7467 Queenstown, Lake Margaret
7468 Strahan, Macquarie Heads
7469 Zeehan, Trial Harbour, Renison Bell
7470 Rosebery

Group B – 80% loan to value ratio maximum from NAB in these areas

New South Wales:

2000 Sydney
2205 Arncliffe, Turrella, Wolli Creek
2113 East Ryde, Macquarie Park, North Ryde
2769 The Ponds
2209 Beverly Hills, Narwee
2019 Banksmeadow, Botany
2199 Yagoona
2017 Waterloo, Zetland
2067 Chatswood, Chatswood West
2211 Padstow, Padstow Heights
2008 Chippendale, Darlington
2141 Berala, Lidcombe, Rockwood
2153 Baulkham Hills, Bella Vista, Winston Hills
2210 Lugarno, Peakhurst, Peakhurst Heights, Riverwood
2118 Carlingford
2222 Penshurst
2166 Cabramatta, Cabramatta West, Canley Vale/Heights, Lansvale
2767 Bungarribee, Doonside, Woodcroft
2127 Newington, Sydney Olympic Park, Wentworth Point
2144 Auburn
2566 Varroville, Bow Bowing, Minto, Raby, St Andrews
2140 Homebush, Homebush West
2194 Campsie
2037 Forest Lodge, Glebe,
2768 Glenwood, Parklea, Stanhope Gardens
2142 Camellia, Clyde, Granville, Holroyd, Rosehill, South Granville
2150 Harris Park, Parramatta
2220 Hurstville, Hurstville Grove
2168 Ashcroft, Busby, Cartwright, Green Valley
2151 North Rocks, North Parramatta
2146 Toongabbie, Old Toongabbie
2195 Lakemba, Wiley Park
2112 Denistone East, Putney, Ryde
2208 Kingsgrove

Victoria:

3000 Melbourne CBD
3004 St Kilda Road Central
3006 South Bank, South Wharf
3008 Docklands
3067 Abbotsford

South Australia:

5000 Adelaide CBD
5001 Adelaide CBD

Western Australia:

6000 Perth CBD

Queensland:

4000 Brisbane CBD

 

Note, this relates to National Australia Bank (NAB) policy. Other banks and lenders have their own way of assessing risk and have their own lending policies about maximum loan to value ratios. It you are buying in one of these suburbs and are yet to have your loan approved contact us to evaluate your home loan or investment loan options.

Need help? Contact one of our mortgage brokers in Sydney, Melbourne, Brisbane, Perth or Adelaide.

 

 

Call us:

+614 30129662

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Temporary visa holders in Australia 2015

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Temporary visa holders in Australia 2015

There were 1,764,980 temporary entrants and New Zealand citizens in Australia on 30 June 2015, up by 3.8% from 30 June 2014 at 1,699,570.

The four largest components in Australia on 30 June 2015 were New Zealand visa holders (653,830 visa holders and 37.0 per cent of the total), student visa holders (374,570 / 21.2 per cent), visitor visa holders (227,160 / 12.9 per cent) and Temporary skilled (subclass 457) visa holders (188,000/ 10.7 per cent).

The top source citizenship country for temporary entrants in Australia on 30 June 2015 was New Zealand (654,070 visa holders), followed by China (excl SARs) (161,570), India (144,460), United Kingdom (93,300) and South Korea (50,760). NZ citizens have unrestricted access to Australia under a trans-Tasman deal.

 Of the 161,570 temporary Chinese entrants 82,570 were students, 44,960 were visitors and 11,650 were temporary skilled (457 visa) holders.
Of the 144,460 temporary Indian entrants 48,950 were students, 41,000 were 457 visa holders and 34,630 were visitors.
Of the 93,300 temporary UK entrants 33,350 were 457 visa holders, 29,030 were working holiday makers and 16,020 were visitors.
See more here: statistics about temporary entrants to Australia
Temporary residence in Australia can be a pathway to permanent residence for some. By staying in Australia as a student, skilled worker or on another temporary visa people can experience the Australian culture and may end up applying to stay permanently.

Often if temporary visa holder intend to stay for an extended period or apply for permanent residence they will want to purchase a property here in Australia. Did you know that some banks and other lenders provide home loans to temporary visa holders, including home loans for 457 visa holders?
For short term holiday makers it can also be an opportunity to investigate investing in Australia especially the Australian property market. Did you know that some banks and lenders will provide investment property loans for foreigners?

Contact us:

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What is a construction loan?

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What is a construction loan?

Building your own house can be a exciting and enjoyable experience. However, things can go wrong and can turn your exciting adventure into a stressful and expensive process.

Most people cannot afford to pay for the cost of the land and the construction costs of the new building and require finance.

Financing a construction project is different from a normal home loan as the bank is lending for something that is not yet built. To manage the risk of lending for a building that is to be constructed some lenders offer special construction loans that have conditions around the construction that need to be met in order to qualify and for funds to be released.

Need a construction loan?

Our mortgage brokers can assist you to compare different construction loans and assist in the application process. Contact us to talk to a mortgage broker about a construction loan.

Some of the considerations when getting a construction loan

Banks and lenders will typically have a set of criteria about the construction, how it is to be completed and when they will release funds.

For example most lenders will require that you engage a registered builder with a fixed price contract. This way they know that the builder is qualified and registered and that the price to the completion of the construction is known and agreed at the start. Furthermore, most lenders will effectively make you reapply if you have a variation to the building that requires additional funds to be borrowed.

Some lenders will approve owner builder home loans but usually only to people who are experienced registered builders that are building their own project.

The lender will require detailed specifications including comprehensive floor plans and details about the construction materials.

The lender will also usually get a property valuation from an approved appraiser. The appeaser will go through the specifications of the construction contract and building specifications and determine an estimate of the end value of the construction with the associated land by comparing to other properties with similar specification and features in the area.

You will also need to provide a deposit. Now days for owner occupiers many lenders are offering loans of up to 95% of the property value for construction purposes with the same interest rates as normal home loans.

As with all home loans you will need to demonstrate to the lender that you are able to make the repayments on the loan. To do this the lender will consider your income, other loans payments and your expenses. The lender will also need to assess your assets and liabilities position.
Providing that you meet all the lender’s requirements and have good credit, you should be able to get a construction loan.

 

Construction loans

Find out all you need to know about construction loans. The loan process, comprehensive construction loan criteria and more.

 

Contact us:

+614 30129662

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