Trend line of rising prices flattened this week in auction market
Prices fell everywhere except Brisbane this week, despite unusually strong clearance rates on relatively low volumes. Sydney closed 583 auctions – well below spring highs, though a slight increase from the previous week – at a rate of 77.6 per cent according to RP Data, while Melbourne closed 637 auctions at a 70.9 per cent rate. Together, Australia’s five biggest capitals fell 0.1 per cent in combined home value, with a drop of 0.1 per cent in Sydney and 0.2 per cent in Melbourne. Brisbane gained 0.2 per cent, while Adelaide fell 0.2 per cent. Perth recorded no price changes. Read the full story here.
The Reserve Bank of Australia sets interest rates this week
The monthly meeting of the RBA comes Tuesday amid rising pressure to manage rising currency rates and the threat of an overheated property market, though economic weakness in the resource sector will likely keep interest rates level at historical lows. Analysts widely anticipate that the bank will leave the official cash rate at 2.5 per cent, with no bank predicting a move up before the end of the year. A barrel of economic data will come down river this week, with a labour market report to be released Thursday and the home loan report due Friday morning, informing the bank's subsequent monetary policy statement. Analysts expect the unemployment rate to remain at 6 per cent and labour force participation to remain at 64.7 per cent. Read the full story here.
Schwarzenegger films ads for realestate.com.au
After eight years overseeing the boom and bust of the California real estate market as the state's governor, Hollywood actor and famed bodybuilder Arnold Schwarzenegger is down under promoting Australian property site realestate.com.au. A series of seven advertisements began airing over the weekend as part REA Group's new “Australia Lives Here” campaign. Schwarzenegger tells viewers he wants to move back to Austria, and is initially confused by the .au in the realestate.com.au website address, believing it's an Austrian site. Hilarity ensues. Read the full story here.
Record low rates on fixed-rate home loans aren't converting variable-rate borrowers
Three of the four largest banks in Australia cut home loan rates below 5 per cent last month. But only about 24 per cent of new home loan customers fixed their loans in June, according to the nation’s largest mortgage broking group, Australian Finance Group. “Australia just isn’t a fixed-rate loan country,’’ said Phil Naylor, Mortgage and Finance Association of Australia’s chief executive officer. “Australians have always opted to run with the market.” Some of this has to do with how Australia's lenders approach long-term fixed rate mortgages, which are priced much higher than variable-rate loans. For example, CBA offers a 15-year discounted package fixed rate loan at 7.59 per cent – far higher than the 5 per cent five-year fixed rate loan on offer. Read the full story here.
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