Home loan increases as international boarders open

Home loan increases as international boarders open

C J Investiments, in collaboration with EK Capital, brings you exciting news about the reopening of the international border! Investors holding rental properties in large cities will have more opportunities.

Meanwhile, here’s what’s new in the world of real estate and finance:
• Borrowers set a new record for home loans

• First-time homebuyers get a financial boost

• The cost of building a home has increased by 7.3 per cent.

• How to Prepare for Interest Rate Increases

Home loan activity reached a new high in December, according to the latest figures from the Australian Bureau of Statistics, indicating that the housing market is still strong.

In December, Australians committed to $32.8 billion in mortgages, up 4.4 per cent from the previous month and 26.5 per cent from the previous year. The following was the breakdown:

• $22.5 billion in owner-occupied loans (up 5.3 per cent monthly, 12.4 per cent annually)

• $10.3 billion in investor loans (up 2.4 per cent monthly, 73.9 per cent annually)

The fact that the market has been expanding for the past year is one of the reasons why so many Australians are entering it.

Another point to consider is that, despite anticipation that interest rates may rise later this year, rates are currently at ultra-low levels and would remain so even if rates were to rise.

The First Home Super Saver Scheme savings threshold has been doubled from $30,000 to $50,000, allowing first-time buyers to save their deposit even faster.

The scheme allows first-home purchasers to put up to $15,000 per year in pre-tax income into a designated account within their superannuation fund, with a total limit of $50,000.

The First Home Super Saver Scheme supports first-time homebuyers in two ways.

For starters, the money people put into the programme is taxed at 15% rather than the standard income tax rate of 19% for those earning up to $45,000 and 32.5 per cent for those earning up to $120,000.

Second, when first-time home purchasers withdraw their funds, they are allowed to withdraw their original deposit plus approximately 4.7 per cent interest, which is a higher rate of interest than they would earn in a traditional savings account. Withdrawals are normally taxed at 30% less the marginal tax rate.

Residential construction costs have risen at the quickest yearly rate since 2005, owing to supply chain bottlenecks that have impacted various industries.

According to CoreLogic’s Cordell Construction Cost Index, home construction costs increased by 7.3 per cent in the calendar year 2021. (CCCI).

However, with prices growing 3.8 per cent in the September quarter but only 1.1 per cent in the December quarter, the rate of growth may be slowing.

Part of the reason for the increase is that builders are having difficulty obtaining materials such as wood and metal.

At least some of these extra costs are likely to be passed on to homebuyers by property developers and builders.

Call us if you need a home loan


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