Housing affordability on the rise.

The March Quarter edition of the Adelaide Bank/REIA Housing Affordability Report shows improvements in housing affordability in all states and territories when compared to the same quarter in 2013.

Commenting on the report’s findings, Damian Percy, General Manager of Adelaide Bank said: “The proportion of family income needed to meet home loan repayments has fallen from 30.8% to 30.6%. On the rental side, the proportion of family income needed to meet rent payments has increased slightly from 25.4% in the December quarter to 25.7% .

“The latest findings represent a 5% gap between rental payments and home loan repayments. We welcome an improvement in this quarter, but what of the future? Are we making it easy for people to ‘right-size’ their homes and are State planning policies and taxes such as stamp duty limiting their ability or inclination to do so?

“I think it’s important to keep the housing affordability debate rolling. How can we make it easier for people to more readily upsize and downsize without having to agonise about and plan for such a move over years instead of months?

“Encouraging home ownership should be a key priority for any home lender and Adelaide Bank is committed to working with REIA to contribute to the development of sound public policy that will help ease the supply side problems that put upward pressure on housing.

“Adelaide Bank’s continuing and widely recognised contribution to improving housing affordability is to keep the cost of lending as low as we can, while providing great service through Australia’s growing network of mortgage brokers” concluded Mr Percy.

The post Housing affordability shows slight improvement for March quarter appeared first on AdviserVoice.

Housing repayments back over 30% of median weekly income.

The latest edition of the Adelaide Bank/REIA Housing Affordability Report  shows that the proportion of median weekly family income required to meet home loan repayments for the December 2013 Quarter is back over thirty per cent.

Looking into the future, the apparent dearth of first time buyer activity should be a concern for policy makers, governments and the community generally.

Damian Percy, General Manager of Adelaide Bank said:  “We know that owner-occupier first home buyers are staying away from the property market in droves and have been for some time.  In spite of a benign interest rate environment, on current statistics, a historically low number of Australians do not seem to feel they are in a position to step onto the first rung of the property ladder. With a view to the future, I can’t see this playing out well.

“If you look at pretty well all the budget-based estimates on people’s retirement income needs prepared by organisations like ASFA, the modelling assumes home ownership. We need to better measure and understand what could happen if the current figures reflect reality and plan accordingly.

“Unless we can reverse this trend, the most obvious outcome will be that there will be lot of people renting right up until they are of pensionable age.   The rents they may be able to afford on the aged pension in the private market at that point in time – in 40 to 50 years – are likely to be in areas well away from health-care and the other services they will require as ageing Australians.

“The decline in owner-occupied first home buyer activity does appear to have been offset to an extent by the latest RBA investor housing loan aggregates, which grew by 0.8% for the month of January and by 7.4% for the 12 months to January, so there could also be other behavioural forces at work here.

“Encouraging home ownership should be a key priority for any home lender and Adelaide Bank is committed to working with the Real Estate Institute of Australia to contribute to the development of sound public policy that, if implemented, will help ease pressure on demand for affordable housing in many areas.

“Adelaide Bank’s contribution to improving housing affordability is to keep the cost of lending as low as we can, while providing great service through Australia’s growing network of mortgage brokers”, Mr Percy concluded.

The post First home buyer slump: Call to better understand the impact on Australia’s future. appeared first on AdviserVoice.

Housing affordability on the rise.

The Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report for the September quarter 2013 recorded an improvement in housing affordability with the proportion of income required to meet loan repayments decreasing 1.2 percentage points to 29.8%.

Compared to the same quarter of the previous year, the figure fell 3.5 percentage points. All states and territories recorded improvements over the quarter with the largest improvement in affordability in Tasmania, where the proportion of income required to meet loan repayments dropped by 1.6 percentage points to 24.6%.

Damian Percy, General Manager of Adelaide Bank said: “The continued improvement in housing affordability is a welcome result for aspiring home owners. Low interest rates and modest rises in family incomes have combined with relatively stable average loan sizes in many parts of Australia to maintain the trend of the last three years”.

“Despite some of the headlines we see about frenzied auction bidding in the inner cities, for those prepared to look carefully and live in the middle and outer suburbs, there are still plenty of housing opportunities for people.

“This is particularly the case in the capital city apartment markets and for three bedroom houses in cities such as Brisbane, Adelaide, Canberra, Perth and Melbourne.

“Less pleasing and of genuine concern is the very low level of first home buyer activity over the most recent quarter. First home buyers remain a strong indicator of the underlying health of the Australian housing market . Their absence over recent months suggests that although affordability is improving, it needs to improve further.

“Improving housing affordability must remain the focus of both governments and industry participants. At Adelaide Bank, we understand that the best way a bank can contribute to improving housing affordability is to keep the cost of lending as low as possible.

“Adelaide Bank also believes in the value of good advice, which is why we partner with Australia’s growing network of professional mortgage brokers to offer great value home loans that can assist people into housing as cheaply as we can – and with as little stress as possible”, Mr Percy concluded.

The post Housing affordability improves, but first home-buyers still missing in action appeared first on AdviserVoice.

Mr Percy said, “I am very pleased to be able to announce that Fons Caminiti is the new leader in the position of Senior Manager, Broker Distribution.  This new role is a key part of the restructuring and repositioning of our broker business interface and I am confident Fons will utilise his significant experience and unparalleled enthusiasm to great effect.

“Adelaide Bank has been making some significant changes to the way the business assists our brokers and their customers as part of a broader push to rejuvenate the brand in what is a highly competitive market.

“Our recent rate reductions are also part of some exciting changes we’re implementing to create a better environment and a more compelling case for our broker partners to do business with us.

“We’ll remain a true ‘broker only’ bank and we’ll continue to improve our service and processes and maintain our market leading turnaround times. Great turnaround times are a key feature of our value proposition and greatly appreciated by busy brokers, particularly in hot capital city property markets.

Fons Caminiti has been an employee with Adelaide Bank for over thirteen years and has attained extensive hands-on experience and knowledge within residential lending divisions.  Mr Caminiti has spent three years as a Business Development Manager within the broker channel in South Australia and for the last seven years been State Manager for Mortgage Management within Victoria, South Australia and New South Wales.

Mr Caminiti said “I look forward to leading the Adelaide Bank Broker Distribution Division and relish taking on the challenges and opportunities that lay ahead for our business. It’s a very exciting time to be involved with the Adelaide Bank Broker business, particularly as we’re investing heavily to enhance our broker offering.

“It’s a source of great pride that I’m working for a bank so committed to the broker market and to putting brokers first in everything we do.

“I will continue to build on the work that’s already begun in reinvigorating and enhancing our value proposition for the broker channel. I have a national team of committed industry professionals who will continue to focus on brokers and our business partner’s needs”, Mr Caminiti concluded.

The post Adelaide Bank appoints new head of broker distribution appeared first on AdviserVoice.

The move applies to the $375 application fee for new loans, split loans, internal refinances and the $175 application fee for credit increases. 

Damian Percy, general manager of third party lending said the move could help provide first home buyers and brokers with some extra traction in a slow mortgage market.

“The latest RBA figures show that 2012 was probably the year of lowest credit growth in some decades and December was the lowest month, so in order to help kick things along, we decided to start the year with an application fee-free February”, Percy said.

“As sponsors of the Real Estate Institute of Australia’s Housing Affordability Report, affordability is an issue we constantly track and care about.  For some people currently renting, depending on where they are looking to buy, mortgage payments could actually be less than their current rental payments.  

“We’re hoping that Application Fee-free February will serve as a catalyst for first home buyers weighing up the ‘buy versus rent’ equation and that they’ll go and see what a mortgage broker can do for them.  

“Adelaide Bank’s turnaround times and hassle-free service are well regarded by mortgage brokers and the waiver of application fees for February is just another good reason to see what we can do for you”, Mr Percy concluded.

The post Adelaide Bank: App fee free February! appeared first on AdviserVoice.

General Manager of Adelaide Bank, Damian Percy said: “The number of first home buyers has continued to rise and rental affordability has also stabilised.  Compared to the September Quarter last year, we have now observed a 14.3% increase in new finance commitments to first home buyers, bringing this segment back up to almost 20% of all residential home buyers. 

“This is still quite a long way off the 30.8% level for first home buyers recorded in the June Quarter of 2009 but there are several factors that seem to be driving this growth.   Median weekly family income has also increased from the September Quarter in 2011 by around $250 per month.  

“The average loan size of new lending commitments is now at $320,542 and average monthly loan repayments are up slightly to $2,176, or $544 per week.  The current low interest rate environment is encouraging many people to re-visit and weigh up the ‘buy VS rent’ equation.    

“Certainly there are many desirable parts of Australia where it is now cheaper to buy and make loan repayments than it is to rent and around a fifth of all homebuyers are first home owners who have decided to come down on the ‘buy’ side of the equation”, Mr Percy concluded.   

Fast Facts

• Victoria recorded the largest improvement with the proportion of income required to meet loan repayments decreasing 4.4% compared to the September quarter 2011.
• The number of new finance commitments to first home buyers increased by 6.0% to 26,075 in the September quarter.
• Compared to the September quarter of the previous year, new finance commitments to first home buyers increased 14.3%.
• Compared to the same quarter of the previous year, housing affordability in the Northern Territory and the Australian Capital Territory declined.
• Over the quarter, the number of loans to first home buyers increased in all states and territories with the exception of Queensland and the Northern Territory.
• Across the country New South Wales was the only state or territory to record a decrease in the number of new finance commitments to first home buyers. 
• During the quarter, first home buyers made up 19.0% of the market compared to 17.9% in the June quarter. 
  The REIA Home Loan Affordability Indicator (HLAI) is moving in the right direction.

The post First home buyers back appeared first on AdviserVoice.

Head of Mortgage Broking, Scott Erickson, said “Five year fixed loans are now at 6.59%, which is the lowest 5 year rate for the Bank since March 2009. 

“Adelaide Bank’s fixed rate loans come with 100% offset 100% of the time, which means that there is the potential for an even better rate for those keen to save on their mortgage.  

“Based on a $300,000 loan, if the borrowers offset balance equates to $5000, their effective rate would be in the vicinity of 5.83% for a one, two or three year fixed term. 

“Interestingly, with our current fixed rate portfolio, the average balance of the offset account is a great deal higher than $5000, which indicates that many people should benefit from the lower rate on offer. 

“Our 100% offset on fixed rates not only provides customers with certainty of repayments, it also an opportunity to reduce their debt and own their home faster.  It’s a case of less is more for homebuyers.  

“The convergence of rising rents, lower interest rates and subdued property markets will no doubt rekindle interest in buyers seeking to enter the housing market for the first time”, Mr Erickson concluded.

The post Adelaide Bank cuts interest rate to lowest level in more than three years appeared first on AdviserVoice.