Sydney’s property auctions were busy over the weekend with the cut in interest rates boosting clearance rates to 82.4 per cent based on 256 auctions. The senior economist of the Domain Group said that the RBA’s rate cut had “added fuel to what is already a raging fire.” Realtors reported that sellers benefitted from the lower cost of home loans and reported a spike in bidders.
Source: Domain Group
Home values increase little after inflation
The value of homes outside Sydney and Melbourne has risen only slightly once inflation is taken into account. Figures calculated by CoreLogic RP Data using it Home Value Index show that with inflation at 1.7 per cent the annual rise in home prices of 7.9 per cent is reduced to 6.1 per cent. Sydney and Melbourne are the capital cities driving the annual increase and the inflation-adjusted figures show that Sydney’s prices grew by 10.6 per cent, almost twice that of Melbourne (5.8 per cent). The other capital cities saw growth in real terms of 3 per cent or less. When the numbers are further analysed CoreLogic RP Data concludes that outside Sydney and Melbourne there has been very little real-term growth in the capital cities for the past 6 years.
Source: CoreLogic RP Data
Move to curb foreign investment in property won’t work
A migration agent says that introducing an application fee for foreign investors will not deter levels of overseas buyers. John Findley of Shanghai Resources acknowledged that the fees would help fund law enforcement to crack down on illegal property deals which is estimated to run into billions of dollars. However the extra cost, possibly around $1500, will be little more than a “speed bump” for foreign investors. Findley told The Australian that property agents may even absorb the cost as a marketing ploy. Others take a different view with Andrew Taylor of Juwai, which markets Australian property to Chinese buyers, telling the paper that it would cut foreign investment in Australia.
Source: The Australian
Bendigo announces rate cut
Another bank has announced a cut in its standard variable interest rate. Bendigo and Adelaide Bank will pass on the full 0.25 per cent of the RBA interest rate cut for new and existing borrowers from 27th February. The bank says that customers with a variable mortgage of $400,000 will see their home loan repayments reduce by $62 a month.
Source: Bendigo and Adelaide Bank
Collections: Mortgage News