Lending hits new record; 8% returns… from carparks?; Buy a home, go to Fiji; Property under fire?

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Banks increasingly reliant on home mortgages, PwC says
Mortgages form 60 per cent of all the lending done by Australia’s big four banks, now accounting for a bigger share of lending than at any time in the last 30 years, according to PriceWaterhouseCoopers. Most of that surge comes from investment buyers – a third of the market, growing at 8 per cent a year, while first-time homebuyers are at record lows. Housing credit grew at 5.9% in the year to March, nearly 30% more than the same period the year before. Read the full story here.
Take a mortgage, go to Fiji?
Lenders like the Greater Building Society are throwing in perks like cruises or international and domestic holidays to Los Angeles, Fiji or the Gold Coast to attract new customers. Others are offering free home insurance, cash back, shopping credits or gift cards – whatever it takes to distinguish oneself in a low-interest rate environment. The deals may make a fine marketing ploy but aren’t always particularly beneficial to consumers in the long run.Lenders are trying whatever marketing ploys they can to encourage people to look at their products in a tight market” Phil Naylor told news.com.au  Read the full story here.
First houses, now cars: $50,000 parking in Melbourne
The average car park in Melbourne costs just over $50,000 with an average rental yield of 8 per cent. The hot property market is leaking into other sectors. Median gross rental yield for houses is only 4.3 per cent, according to March quarter figures from Fairfax-owned Australian Property Monitors. That’s raising the value of other property for investors. Read the full story here.
Canberra approving construction at brisk pace
Despite last month’s fall in approvals nationally, Canberra recorded a solid 5.9 per cent rise in monthly ABS home building approvals over March. With 1255 approvals this year, the first four months are 39 per cent higher than the same period last year. House approvals have increased by 16.5 per cent to 474 with unit approvals up strongly by 59.1 per cent to 781. National home building approvals remain 20 per cent up since March 2013. Read the full story here.
Should homes be counted as assets for pension purposes? An austerity budget raises the question
Given pension payments that have more than tripled in real terms over the past 50 years, should the government start counting homes as assets to determine pension eligibility? The question elicits howls from people who are house rich and cash poor, and if ever implemented would upend property investment expectations. However the Grattan institute has calculated that including the principal family residence in the pension means test would save the country $5Bn a year Read the full story here.
Couples rearranging their finances to qualify for pensions
Pensions cost the commonwealth almost $40 billion a year, rising at about 7 per cent a year. One factor driving this has been aggressive financial planning by older couples who spend down cash by renovating their homes. Until 1912 the family home was included in the asset test and economist Fred Gruen suggested to Bob Hawke that he should reintroduce the measure in 1986. The reality is that any government is likely to do anything too aggressive and lose the grey vote   Read the full story here.

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