Latest news with #SallyTindall
News.com.au
26 minutes ago
- Business
- News.com.au
Why the Bank of Mum and Dad is now a necessity
Parental wealth is fast becoming the secret weapon of first-home buyers, with family help now the difference between getting a home loan approved or being locked out for good. With house prices and required incomes surging beyond what most young Australians can save alone, property insiders say the 'Bank of Mum and Dad' is no longer a bonus, it's a necessity. Canstar research director Sally Tindall said the divide between those with family backing and those without was widening at speed. 'First-home buyers today aren't just up against high prices, they're up against time,' Ms Tindall said. 'Those with family support can move quickly. Those without it are constantly playing catch-up.' Ms Tindall added that many parents were now treating housing help as an investment in their kids' future. 'For some families, it's not just a gift, it's a strategic decision,' she said. 'They want to give their children a head start, knowing how hard it is to build equity from scratch.' Prominent Melbourne buyers' advocate Cate Bakos said she had seen adult children move back in with parents to aggressively save, while others were leaning on their families for emotional resilience as much as money. 'There's often an unspoken pressure,' Ms Bakos said. 'Some buyers don't want to ask for help, but they feel like it's their only option.' 'We're working with families as a unit now — it's no longer just about the buyer.' Ms Bakos said in many cases, parents were attending inspections and auctions, acting as sounding boards and unofficial advisers. Zippy Financial principal broker Louisa Sanghera said one of the most common trends was partial deposits, where parents might match whatever their children could save. 'We see parents say, 'If you save $50,000, we'll match it', it becomes a partnership,' Ms Sanghera said. 'That kind of leverage can mean the difference between winning an auction or walking away.' Ms Sanghera added that buyers were often borrowing at the absolute edge of their serviceability range, so any reduction in upfront cost was hugely helpful. 'We're not just talking about first-home buyers in their 20s,' she said. 'Some clients are in their mid-30s or even 40s, and they're still needing help. 'That's how hard it's become to enter the market.'
News.com.au
3 hours ago
- Business
- News.com.au
Have your wages kept pace with post-Covid growth in Geelong
The level of household income needed to comfortably afford to break in to the property market in Geelong has risen over the past five years despite home prices remaining in the doldrums. Exclusive Canstar research reveals how much wages have failed to keep pace with the property market in the five years since the start of the pandemic. More tellingly, it reveals how much outside of actual home prices impacts people's ability to break in to the market. The figures show the level of household income to buy in a suburb of Geelong and pay less than 30 per cent on mortgage repayments has risen between about $40,000 to almost $140,000, depending on the suburb you buy in. Four suburbs require an income of less than $100,000 – Norlane, Corio, Thomson and Whittington. But the amount required has climbed between $37,000 and $44,000 in the past five years. A median priced house in Armstrong Creek requires a $121,000 household income, a $51,000 increase, while a similar rise pushes the annual wage to buy in Belmont to $130,000. A typical household income required to buy in Geelong West rose $66,000 to $158,000. But the biggest rise was in Manifold Heights, where the median house price has reached $1.26m off the back of a sharp rise this year. A household now needs a $235,000 income to comfortably afford to buy in this high-end suburb. Canstar director of research Sally Tindall said the study showed the widening generational wealth gap. 'It is astonishing to see just what kind of income is required to get a foot on the property ladder these days,' Ms Tindall said. 'My concern is that this is shutting people out. It creates this divide between those already in the property market and those that are struggling to land a foot on the property ladder. 'What we are seeing anecdotally is that those families who have property are passing down the wealth they have created through home ownership down generations, further deepening that divide,' Ms Tindall said. 'The Bank of Mum and Dad is becoming more of a thing.' At $720,000, Geelong's median house price is 23 per cent higher than it was in 2020, even though it's 9 per cent lower than three years ago. Part of what was fuelling the incredible rise in property prices was the burgeoning amount of equity upgraders had behind them to channel into their next purchases, Ms Tindall said. 'Very few people have had the kind of pay rises needed to keep pace with the market. For most people, the only way they've kept up is because they already own property. Success breeds success.' The problem for first-home buyers was that getting a foot on the first rung of the property ladder was becoming more challenging, robbing them of the chance to also benefit from future equity gains, she said. 'Fundamentally, the issue facing first-home buyers across the country is that prices are too high and their wages can't keep up. 'There are a range of complex reasons we have this problem, but one of the primary factors is that we don't have enough housing supply and we are not building enough to satisfy demand.' Zippy Financial principal broker Louisa Sanghera said more buyers were amassing smaller deposits and paying lenders mortgage insurance to get in sooner. 'Waiting for a 20 per cent deposit isn't realistic anymore,' she said. 'If they wait, the market moves on without them.' Ms Sanghera said even strong earners were hitting serviceability roadblocks. 'Banks are stress-testing at nine per cent,' she said. 'Add rising living costs, and many buyers can't borrow what they'd hoped.' Have your wages kept pace with post-Covid growth Suburb Property type Median value Gross income needed Difference in gross income over five years Anglesea H $1,350,000 $252,188 $121,110 Armstrong Creek H $650,000 $121,424 $51,203 Bannockburn H $785,000 $146,643 $69,066 Barwon Heads H $1,420,000 $265,264 $114,123 Bell Park H $611,000 $114,139 $49,034 Bell Post Hill H $660,000 $123,292 $58,421 Belmont H $700,000 $130,764 $55,996 Charlemont H $615,500 $114,979 $43,421 Clifton Springs H $652,600 $121,910 $55,969 Corio H $490,000 $91,535 $43,785 Curlewis H $638,250 $119,229 $45,932 Drysdale H $710,000 $132,632 $51,377 East Geelong H $765,000 $142,907 $55,967 Geelong H $880,000 $164,389 $70,561 Geelong West H $850,000 $158,785 $66,495 Grovedale H $663,000 $123,853 $54,301 Hamlyn Heights H $720,000 $134,501 $60,936 Herne Hill H $700,000 $130,764 $59,373 Highton H $861,000 $160,840 $67,413 Indented Head H $700,000 $130,764 $48,439 Jan Juc H $1,270,000 $237,244 $115,528 Lara H $680,000 $127,028 $54,667 Leopold H $650,000 $121,424 $51,872 Lorne H $1,557,500 $290,950 $98,011 Lovely Banks H $840,000 $156,917 $79,741 Manifold Heights H $1,260,000 $235,376 $138,739 Marshall H $630,000 $117,688 $52,416 Mount Duneed H $700,000 $130,764 $54,993 Newcomb H $550,000 $102,744 $42,488 Newtown H $1,150,000 $214,827 $95,118 Norlane H $451,000 $84,250 $37,436 North Geelong H $610,000 $113,952 $40,655 Ocean Grove H $955,000 $178,400 $84,505 Point Lonsdale H $1,207,500 $225,568 $112,546 Portarlington H $863,500 $161,307 $77,878 St Albans Park H $585,000 $109,282 $52,403 St Leonards H $720,000 $134,501 $60,268 Teesdale H $990,000 $184,938 $92,314 Thomson H $512,500 $95,738 $40,698 Torquay H $1,175,000 $219,497 $111,090 Wandana Heights H $925,000 $172,796 $66,027 Waurn Ponds H $765,500 $143,000 $57,063 Whittington H $529,000 $98,821 $44,082 Winchelsea H $650,000 $121,424 $61,235 Have your wages kept pace with post-Covid growth Suburb Property type Median value Gross income needed Difference in gross income over five years Bell Park U $507,000 $94,711 $42,547 Belmont U $538,000 $100,502 $44,593 Drysdale U $547,500 $102,277 $48,107 Geelong U $615,000 $114,886 $44,532 Geelong West U $387,500 $72,388 $17,549 Grovedale U $496,250 $92,703 $36,551 Hamlyn Heights U $530,750 $99,148 $38,892 Herne Hill U $368,000 $68,745 $29,956 Highton U $500,000 $93,403 $38,564 Lara U $447,500 $83,596 $33,104 Leopold U $483,000 $90,228 $37,395 Newcomb U $478,000 $89,294 $39,805 Newtown U $575,000 $107,414 $47,894 Norlane U $380,000 $70,987 $30,861 Ocean Grove U $741,000 $138,423 $54,158 Torquay U $880,000 $164,389 $75,844 Whittington U $365,000 $68,185 $27,390
News.com.au
4 hours ago
- Business
- News.com.au
Staggering pay rise you'd need since Covid to still afford a Sydney house
They're the kind of pay increases that would make doctors, politicians and even some CEOs jealous – but they've become a necessity for those hoping to crack the housing market. Home seekers wanting an average Sydney house will need to have boosted their income by $150,000 a year just to have kept pace with the incredible property price rises since Covid, a new study shows. The Canstar analysis tracked the household income needed to afford a median priced Sydney home in both 2020 and 2025 – taking into account the typical loan rates being offered at the time. The findings have laid bare the once in a generation price rises and interest rate hikes over the tumultuous period, suggesting a market that has run away from even the wealthiest professionals. With Sydney's median price at about $950,000 in 2020, Canstar indicated that buying a typical house was affordable for a couple or individual back then with a pre-tax income of about $145,000 a year. The minimum income required to buy an average Sydney house has since risen to nearly $290,000 a year. It's followed a circa 60 per cent increase in the cost of housing between 2020 and 2025, along with a nearly 4 per cent hike in interest rates – even when accounting for the two rate cuts this year. Canstar director of research Sally Tindall said few workers saw their earnings grow fast enough to keep up with the price changes. She pointed to ABS weekly earnings data that showed wages over the same five-year period increased by just under 16 per cent. This incredible mismatch was leaving more people shut-out of the market and consigned to a life of renting, Ms Tindall said. 'It is astonishing to see just what kind of income is required to get a foot on the property ladder these days,' she said. Part of what was fuelling the incredible rise in property prices was the burgeoning amount of equity upgraders had behind them to channel into their next purchases, Ms Tindall said. 'It's not an even playing field,' she said. 'Very few people have had the kind of pay rises needed to keep pace with the market. 'For most people, the only way they've kept up is because they already own property. Success breeds success.' Increases in the income needed to buy the average houses in some of Sydney's most sought after suburbs were the most extreme, Canstar revealed. Cracking the house market in north shore suburbs Crows Nest and Lane Cove required a yearly income roughly $300,000 higher than in 2020, while in many Harbour-suburbs the difference was $500,000. This was for buyers with a standard loan rate and 20 per cent deposit who wanted to avoid 'mortgage stress' – spending more than a third of their gross income on loan repayments. Luxe areas Bellevue Hill and Dover Heights led the nation for the biggest changes since Covid, with the income needed to afford a median house up $883,000 in the former and $720,000 in the latter. Even apartments in suburbs known as more affordable Sydney enclaves demanded wage rises that few Sydneysiders could match. Buyers needed to earn about $30,000-$50,000 more per year than they did in 2020 to afford units in Penrith, Parramatta, Punchbowl, Seven Hills, Toongabbie and many others. 'Fundamentally, the issue facing first-home buyers across the country is that prices are too high and their wages can't keep up,' Ms Tindall said. 'There are a range of complex reasons we have this problem, but one of the primary factors is that we don't have enough housing supply and we are not building enough to satisfy demand.' Michael White, an agent with inner west group Adrian William, said first-home buyers were often adapting to the difficulties of keeping up with the market by investing in units. These would often be kept for a few years before being resold and used as a springboard for the purchase of a family home, he said. Natalie Wells bought a Newtown unit in late 2019, just before the pandemic hit, and said the difference between the market then and now was huge. She is selling the Enmore Rd property, one of the few rooftop one-bedders with a wraparound balcony in the area, at auction this weekend. 'It was pretty competitive back in 2019,' she said. 'I had to pay a lot more than it was worth then to secure it, but it's nothing like the market now. Demand has changed so much for any property. 'This whole area, it used to be student bars, now it's a mix of much more up-market places. Prices have just accelerated. 'I feel lucky my generation were able to get into the market when there wasn't this supply and demand imbalance. Because we already own properties, it's easier to trade in and out but worry for my kids. How are they going to do it in future?'
News.com.au
4 days ago
- Business
- News.com.au
Legal bank move could save you $144,000
May's interest rate cut – the second for 2025 – is great news for buyers and owners alike. Not only does it reduce interest costs, the rate cut also raises the borrowing capacity of aspiring buyers. But that's not all. The second rate cut appears to have reignited the 'mortgage wars ', with lenders becoming more competitive to secure new business amid widespread expectations of more rate cuts to come. We saw evidence of this when many lenders cut their fixed rates weeks before the Reserve Bank's meeting this month. Sally Tindall from Canstar told the media that fixed rate home loans had now fallen below 5 per cent. She also said that while it was normal to see fixed rates fall in anticipation of an RBA cash rate cut, some lenders were also cutting their variable rates for new customers at the same time. This indicates that competition is heating up, which is greatly beneficial for both new and existing borrowers. Home owners who already have a loan should stay in touch with their broker. A few more rate cuts might make refinancing to another lender offering a better deal worth your while. The latest prediction from Macquarie is three more 0.25 per cent rate cuts in July, August, and November. There is no guarantee this will happen, but it's reasonable to be optimistic given inflation is now back in the target 2 per cent to 3 per cent band. That was the Reserve Bank's main objective when it raised interest rates 13 times in just 18 months between 2022 and 2023. After the RBA meeting this month, Governor Michele Bullock said the board expected underlying inflation (that's the measure the RBA pays the most attention to) to hover about the midpoint of the target band over the next year or so. As for the impact on the property market, this second rate cut for 2025 is likely to boost activity a bit because it will give people extra confidence that we are now on a downward trend with rates. But I don't think we'll see a meaningful increase in market activity until we've had three or four rate cuts. If you have a home loan with NAB, CBA or ANZ, your rate cut went into effect last Friday. According to CBA, a 0.25 per cent rate cut is worth about $80 per month in savings for borrowers making principal and interest repayments on an average loan of $500,000. And since this is the second 0.25 per cent rate cut for 2025, the combined saving is about twice as much. But there's a catch. (If there are five rate cuts this year, you could save up to $144,000) Some banks require you to opt-in if you want to lower your overall monthly repayment after an interest rate cut. If you don't, the bank may keep your repayment amount the same, but increase the portion going to the principal and decrease the portion going to interest. Paying more principal, in theory, is a positive thing. But if you need the extra cash flow that rate cuts provide to help you cope with today's high cost of living, you might need to make a phone call. According to CBA, only 14 per cent of eligible borrowers called the bank to request that their home loan repayment be lowered after the first rate cut in February. This indicates that borrowers were either keen to accumulate extra redraw funds for a rainy day, or they didn't understand that their overall mortgage repayment would not be adjusted automatically. So, check your paperwork or call your bank to ensure your home loan repayment is adjusted in whatever way suits your individual circumstances.
West Australian
29-05-2025
- Business
- West Australian
Major Aussie banks to slash home loan rates
The Commonwealth Bank of Australia has announced on Thursday it will slash fixed rate home loans by up to 0.40 percentage points across all fixed terms, but experts say it will not be enough to get Aussies to lock in. The change will be in place from Friday, to coincide with a 0.25 cut in CBA's variable rate following the RBA cash rate cut earlier this month. CBA's new lowest fixed rate will be 5.49 per cent for three years. However, ANZ will retain the lowest one and two-year fixed rates among the big four banks. National Australia Bank will also keep their crown of having the lowest three, four, and five-year fixed rates. data insights director Sally Tindall said while CBA's rate cuts bring it closer to its competitors, they're unlikely to send customers rushing to move their business. 'Fixed rates have been falling fairly consistently this year and we expect this activity will continue as banks price in the increasing likelihood of further cash rate cuts,' Ms Tindall said. 'CBA's fixed rate cuts aren't groundbreaking, but rather a bid to inch closer to its key competitors.' Ms Tindall said the announced rate cuts also may not be enough to incentivise Aussies to lock into fixed rate home loans straight away. 'With just a 0.10 percentage point difference (between variable and fixed interest rates), and the possibility of further RBA cuts ramping up, it's hard to see many people jumping at the chance to lock up their mortgage for the next three years,' she said. 'We expect banks big and small will continue cutting fixed rates over the next few months. 'The majors might have to offer a fixed rate in the '4's' if they're serious about getting people to lock in their rate. 'If you're deciding between a fixed or variable rate, understand what might suit your finances and to some extent, your personality. When you make a decision, take the time to look for a competitive rate.' Five major lenders, excluding CBA, have cut fixed rates since the RBA's decision, while 20 lenders have already cut one fixed rate this month, rate tracking shows. A total of four lenders – BOQ, Community First Bank, Police Bank and Queensland Country Bank – are now offering at least one rate under 5 per cent at 4.99 per cent.
