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  • Posted on : 2 Nov 2018

I’ve just come back from the Gold Coast after taking part in Connective’s National Conference – Very insightful and can’t we to share the ideas with you all!

In this edition, I am going to cover off the ever-changing environment we call the finance industry. This in addition to a few things going on in the property space are making a few of our clients nervous.

Given the increased media scrutiny the industry and property market are facing, articles about the market dropping 40% and others stating up to a 60% drop in values. Please, for the sake of your time, please stop wasting it on illegitimate rubbish that is not backed up by cold hard data. Listen to the experts and understand the property cycle. In this article, We’ll be covering off on-

• Your borrowing Capacity – Why has it reduced
• Prices up in 9/14 national Markets
• What’s Dot been up to for the month

Your borrowing Capacity – Why has it reduced

You’re probably thinking when I went into the bank 2 years ago, I could have borrowed much more than what I can now? Why is this the case? It’s simple, tighter lending standards and the increased focus of living expenses.

Research from investment bank UBS found the expected tightening of lending standards and raising of living expense benchmarks would cut credit availability by 21 to 41 per cent, depending on the borrowers’ incomes.

Currently, about three-quarters of all home loans are assessed against the “basic” Home Expenditure Measure (HEM) benchmark.

For a family of four, that is $32,400 a year, a level below the current old age pension for a couple. If you make reference the table, you will see the change from a % standpoint on what was and is your borrowing power –

Prices up in 9/14 national Markets

Different markets are bucking the Sydney and Melbourne trend with 9 out of 14 markets recording growth, according to the latest figures from CoreLogic. Understand that Australia is not just one market. It is made up of thousands that all move in different directions on the property cycle. Having this mindset and structuring your portfolio accordingly can yield substantial results for those investors out there.

The figures show that while prices are down in Sydney and Melbourne, they are higher than a year ago in Hobart, Canberra, Brisbane, Adelaide, regional NSW, regional Victoria, regional Queensland, regional Tasmania and regional South Australia. Hobart continues to lead on price growth, with an annual rise of 10%. In terms of the house markets, five of the eight state and territory capitals (Brisbane, Adelaide, Hobart, Darwin and Canberra) have price levels higher than last year. In addition, the combined regional index is up over 12 months.

This follows the recent release of the official ABS data on prices, which showed that house prices were up in annual terms in five of the eight capital cities. There was a similar outcome in the latest figures from SQM Research.

However, the national average result is down 2.7%, because of the size of the Sydney and Melbourne markets.

 

What has Dot been up to for the month?

We’ve returned from the national conference with ideas on how we can take our service proposition to the next level. We want to be at the forefront of disruption in the industry. Look out for our promotions on facebook and Instagram – You’ll be sure to enjoy them!

As always, we hope you enjoyed reading the blog and should you have any questions, please feel free to email Connecting@dotfinancial.com.au or you can call us on 1300 000 DOT (368).

 

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