Monday, 30 May 2016

Residential land prices increasing in Melbourne

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Residential land prices increasing in Melbourne as developers compete for limited stock

Residential land prices in Melbourne are approaching their previous peak levels as the pipeline land available for development begins to dwindle.

The National Land Survey Program (NLSP) March quarter survey, figures shows that the median block of residential land price in Melbourne increased 2.8% over the March quarter to $218,000.

Over the 12 months to March 2016 residential load lot prices in Melbourne increased 3.8%. Lot prices are just $2,000 below the previous price peak in September 2011 of $220,000.

Melbourne’s median residential land lot price is currently lower than Sydney’s by $245,000. However, because the developable land releases but it is believed that the level of affordability in Melbourne is unlikely to continue.

The demand for developable land in Melbourne continues to remain strong and stock level on the market remain low this will continue to drive up prices as competition from buyers increases. It is also likely to dive up property prices as lower levels of new housing stock comes on the market.

The National Land Survey Program data shows Melbourne has averaged 5,500 lot releases for each of the past three quarters and does not appear to be increasing.

National Land Survey Program data shows that the March quarter saw an average of 1,850 lots sold per month, the second highest quarterly sale rate since the National Land Survey Program began in 2005.

The Melbourne residential land market has posted four consecutive quarters of record or almost record sales volume, making 21,000 residential land lot sales for the year.

State government levies and taxes are also inflating land prices. Lack of Government land releases is also likely to have a price inflation impact on the Melbourne property market more generally.


Land development finance

Are you looking to capitalise on the increasing demand for developable land? Contact Oak Laurel if you are looking to finance a land subdivision.

Development finance

Are you are looking for development finance for your next construction project? Contact Oak Laurel about property development finance


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Tuesday, 3 May 2016

Changes to non resident lending in Australia

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Changes to non resident lending in Australia May 2016

There has recently been some change in non-resident lending in Australia. Many lender that have previously been major players in the non-resident home loan market have pulled out completely from lending to Australian non-residents.

It is believed that these lenders are pulling out of home loans for non-residents in Australia because there have been a number of incidents where fraudulent applications have occurred, primarily around false income declarations of borrowers on loans for investment properties being purchased in Australia.

Some lenders are have also announced that these changes are supporting Australians to get into the property market. However, typically foreign non-residents are purchasing a different type of property than Australians, such as new high density inner city apartments in Melbourne Central Business District (CBD) or other major Australian city CBDs.

Non-resident home loans Australia

Are non-resident home loans in Australia still available? Yes, home loans for non-residents to buy property in Australia are still available from some lenders. Some lenders are now still lending to non-residents but at lower loan to value ratios (proportion of the property’s value being borrowed). Whilst other options are at slightly higher interest rates and fees.

Self employed non-resident home loans and salary based non resident home loan applications are still accepted.

Many of these changes also impact temporary residents in Australia looking to get a home loan.

Australian expat home loans

Are Australian expat home loans impacted? No, there are still many options for Australian expatriate home loan borrowers in the Australian mortgage market. Australian expats with foreign incomes and who are living overseas still have many options. If you are an Australian expat contact Oak Laurel to find a home loan that meets your needs.

Contact Oak Laurel Mortgage brokers about an Australian expat home loan.


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RBA cash rate update May 2016

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RBA cash rate update May 2016

RBA cash rate update May 2016. The Reserve Bank of Australia cut the cash rate by 0.25% to 1.75% today the 3 May 2016. The cut comes after the cash rate being stable at 2% since May 2015.

In the Statement by the Governor of the Reserve Bank of Australia, Glenn Stevens, on the Interest Rate Decision, he sites low levels of inflation as the the primary reasons for the cash rate cut.

Other reasons that the board had reportedly considered include:

  • Slower growth in the Chinese economy
  • Indications are that growth is continuing in 2016, though probably at a more moderate pace.
  • Labour market indicators have been more mixed of late.
  • Stabilisation of the housing market
  • Prudent lending standards.

Though further reasons were considered they appear to be rather benign and appear not to be real drivers of the decision cut rates.

In reaching today’s decision, the Board took careful note of developments in the housing market, where indications are that the effects of supervisory measures are strengthening lending standards and that price pressures have tended to abate. At present, the potential risks of lower interest rates in this area are less than they were a year ago. Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting. Glenn Stevens, Governor of the Reserve Bank of Australia

Which banks have passed on the interest rate cut?

The National Australia Bank, Westpac, Commonwealth Bank and Bank of Queensland have announced that they would pass on the full interest rate cut to their home loan customers. However, ANZ has announced that it would only cut its home loan rate by 0.19%. Other banks and lenders are yet to make any announcement on if they will pass on the cut and by how much.


Curious timing for rate cut given that the decision was made on the same day that Federal budget is due to be handed down and just before an election is due to be announced. The Research Bank of Australia board could have taken a wait-and-see approach with inflation and economic factors as they have done for the past year but decided to cut the cash rate anyway. Not that I am opposed to the cut but perhaps it could have been made earlier.

The Australian dollar tumbled by about 1% after the announcement, probably one of the RBA’s intended impacts of the cut.

Mortgage Broker Oak Laurel By Dr Nigel Abery (Ph.D.)

Looking to cash in on the interest rate cuts?

We can help you to shop around to get a better interest rate. Find out what Oak Laurel mortgage brokers can do for you

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