Image courtesy of @bowerbirdinteriors.

CASH RATE NOW AT 1.85%

The Reserve Bank of Australia (RBA) has increased the cash rate for the fourth consecutive month by 0.5%. The cash rate now sits at 1.85%.

The RBA’s goal is to curb inflation, which they believe will hit a staggering 7.75% this year. Reserve Bank governor Philip Lowe said that this latest rate rise was unlikely to be the last this year.

What does this mean for mortgage lenders?

This latest rate rise will add about $140 a month to repayments on a $500,000 home loan. Since early May, the cash rate has risen by 1.75%. This in total has added about $472 in monthly repayments on a $500,000 loan.

Image courtesy of @bowerbirdinteriors.

CAPITAL CITIES PROPERTY VALUE TRENDS

Australian median property value has dropped by 2% to $747,800 since May 2022.

Sydney

Sydney got hit the hardest and fell by 2.2%. Median house value is $1,346,193 and median unit value is $806,310.
Year to date, Sydney house prices are down  4.1% and unit prices are also down 4.8%.

Melbourne

Melbourne was hit by a 1.5% decrease. The median house value is $964,950 and the median unit value is $614,351.

Hobart

Hobart property also went down by 1.5%. Median house value is $782,748 and median unit value is $577,307.

Canberra

Canberra property prices fell by 1.1%. Median house value is $1,047,912 and median unit value is $626,128.

Brisbane

Brisbane experienced a 0.8% drop with median house value at $884,336, and median unit value at $504,520.

Perth

Perth property gains a slight increase of 0.2%. Median house value is $587,024 and median unit value is $411,460.

Adelaide

Adelaide home prices go up by 0.4% with median house value sitting at $705,634, and median unit value at $431,409.

Darwin

Darwin property is up in July by 0.5%. Median house value is $589,748 and median unit value is $374,340.

Source: CoreLogic

Image courtesy of @bowerbirdinteriors.

INTEREST RATE & HOME LOAN TRENDS

Record month of refinancing

According to the Australian Bureau of Statistics (ABS) Lending Indicators report value of new externally refinanced loans increased by $1.06 billion, to $18.16 billion in June, the highest value on record.

With rising interest rates borrowers continue to fight for the lowest interest rates and best home loan package deals possible, and lenders continue to present cashback offers and lucrative loan packages and incentives to win new clients over.

New lending drop

The value of new home loans has fallen by $1.41 billion to $30.97 billion in June. Owner-occupier lending fell by 3.3% ($707.4 million). Investor lending also dropped by 6.6% ($707.0 million).

Fixed rate loans drop

The proportion of fixed loans funded in the month of June was just 9%. At the peak in July 2021, 46% of all new loans were fixed.
Borrowers continue to return to variable as the majority of big banks’ fixed rates now start with a ‘5’ or even ‘6’, and variable rates sit at the 3-4% mark.

Drop in first home buyers

The number of new owner-occupier first home buyer loans fell 32.2% compared to a year ago, and by 8% month-on-month in June.

Source: ABS Lending Indicator June report, released August 2, 2022.