Latest news with #housingindustry
ABC News
10 hours ago
- Business
- ABC News
Land for 26,000 homes to be released for housing by 2030, with most slated to become units
Almost nine out of 10 blocks of land to be released for residential development across Canberra by 2030 will be for multi-unit housing — an announcement industry representatives say strikes the right balance for the future of housing. The ACT government's latest Housing Supply and Land Release Program promises to deliver 26,000 new homes through land release. Sites for new single dwellings are slated for Belconnen, Gungahlin, and the Molonglo Valley, with a handful in East Canberra. All releases in other districts will be for multi-unit housing. The announcement is part of the territory government's commitment to providing 30,000 additional homes by 2030 — by which time Canberra's population is expected to have grown by 48,000 residents. The government expects the private sector contribution to new housing — which on average is between 1,000 to 1,500 homes annually — will increase over the coming five years to more than 9,000 additional homes. Last month, Treasurer and Planning Minister Chris Steel proposed planning changes which would relax restrictions on the development of so-called "missing middle housing" like townhouses, terraces and low-rise apartments in suburban areas. "These targets will be achieved through budget investment to build more social and affordable homes, undertaking the next stages of planning reform, further land release and investment in supporting infrastructure. "We will continue to progress missing middle housing reforms, as well as supporting more well-located homes close to transport, services and jobs." Construction and housing industry groups have long advocated for more land release in Canberra. Master Builders ACT criticised last year's land release announcement — which more than doubled the number of sites the government previously planned to make available — for including blocks it said wouldn't be "shovel-ready" for many years. However this time around the association's chief executive, Anna Neelagama, welcomed the announcement of the 26,000 homes. But said the government needed to ensure they delivered on its promise. "That is a good thing … Now let's turn that good ambition into reality. "What you see when you look at the data for land release of a five-year period is that it generally falls short of ambition." She said the balance between stand-alone houses and multi-unit housing was ultimately determined by the market and economic viability. "There remain a lot of challenges for project viability and building construction," she said. "Building construction costs are still up 35 per cent since the onset of COVID-19. "A lot of builders are struggling to make projects work." Mr Steel said there would be measures in Tuesday's ACT budget to ensure the industry could meet demand for affordable housing, including an increase in training subsidies to 90 per cent for carpenters, tilers, bricklaying and other critical construction trades; a try-a-trade program for ACT public high schools; and $250 annual cost of living payments for apprentices. "Increasing training subsidies will help more construction employers to take on apprentices where they now only have to take on around 10 per cent of the cost of training." The government said the budget would also support 85 new public housing, 300 affordable built-to-rent homes and 17 new social housing townhouses in Coombs through federal government programs, as well as another $20 million for the ACT's Affordable Housing Project Fund. Stamp duty concession threshold for all eligible home purchases will increase from $1 million to $1.02 million — in line with inflation. Mr Steel said the government would release land for 20 per cent social and affordable housing in the next financial year — above the target of 15 per cent. "We have done a lot of work to make sure we are identifying more land to support lower income households and then making significant investments in supporting community housing providers as well," he said. "The budget will deliver a quadrupling of the land tax exemption for community housing, that provides 75 per cent market rent for people who are in quite vulnerable situations." Opposition Leader Leanne Castley said while extra land release was welcome, new homes were just not being approved and built quickly enough. "This is simply more wrapping paper on their dud policies, with the land being released occurring way too slow to even go close to keeping their election promise," Ms Castley said. "Dwelling approvals are still occurring way too slowly as well thanks to ACT Labor's addiction to extra regulation and extra construction costs." Ms Castley accused the government of blaming the industry when it has pointed to the delivery of new homes being subject to market capacity and industry capability. "After all, what about the Lease Variation Charge, commercial rates, the cost of workers compensation, planning approval times and red tape," Ms Castley said.
Yahoo
22-05-2025
- Business
- Yahoo
‘Marry the house, date the rate': Smart strategy or outdated advice?
'Marry the house, date the rate' refers to the concept of buying now with an eye on refinancing should rates fall. The advice is aimed at wary buyers who are worried about buying a home while rates are elevated. The plan works if rates fall sharply, or if rates fall a little but you can avoid steep closing costs. When mortgage rates began rising in 2022, Americans responded by buying fewer homes. In an attempt to spur reluctant buyers to set aside their fears and make a move, many in the housing industry have begun using the phrase 'marry the house, date the rate.' This motto became popular during the post-pandemic era of rising rates. It's a colloquialism that contrasts the relative permanency of owning a home with the much more temporary transaction of taking out a home loan. After all, it has long been common practice for homeowners to refinance when mortgage rates fall. 'Marry the house' is a straightforward concept: Find the house of your dreams and live happily ever after. In this part of the buying strategy, you focus on finding a house you love. Homeownership may or may not be as enduring as an actual marriage — in the 1940s, one in five Americans moved every year, although that pace has steadily declined since the mid-1980s, according to research from the Harvard Joint Center for Housing Studies. At any rate, you don't have to stay in the house forever, but you are making a commitment of at least a few years. While you develop an emotional connection to a house, the same doesn't apply to a mortgage. It's just a financial instrument. The analogy to dating is somewhat apt: You can stick with your mortgage for a few months or years, but when something better comes along, you can break up with the old mortgage and move on to the new one. Luckily for borrowers, refinancing a mortgage is less awkward and heart-wrenching than dumping a romantic companion. While rates fell below 3 percent for only a brief period during the pandemic, the deals were so tantalizing that many just can't forget the moment of super-cheap money. As a result, home sales have plunged to some of the lowest levels in years. Given that backdrop, 'marry the house, date the rate' is useful advice. A caveat: You shouldn't bank on home values going up and mortgage rates going down. While home prices have been setting one record after another, it's possible that they've entered a period of more muted appreciation. And mortgage rates are especially unpredictable. While housing economists expect mortgage rates to fall gradually, there are no guarantees. Bankrate's take: Don't purchase a home you can't afford at today's rates with the hope of refinancing at a lower rate in the future. Make sure the mortgage payment fits your budget right now. If rates drop down the line, you can always refinance then and enjoy the savings. Vishal Garg, CEO of mortgage lender Better, is a proponent of the 'marry the house, date the rate' strategy. 'The first question is: Have you found a house that you love? Second, can you finance the house you love at a price that's similar to what you pay in rent?' Garg says. 'If that's the case, you're getting an opportunity to buy an option to refinance in the future and significantly lower your housing costs.' Garg has made 'date the rate' part of his company's strategy. Better offers reduced closing costs to homebuyers who finance a purchase with the company and then refinance with Better in the future. That's important because closing costs can make a refinance a bad deal. However, in some cases, you can refinance with no title insurance fee and no appraisal. 'That means you can do a near-zero-cost refi,' Garg says. In that case, even a modest reduction in mortgage rates might trigger a borrower to play the field. Say you've got a $400,000 loan at 7 percent, for a monthly principal and interest payment of $2,661. If rates fall to 6.25 percent, your new payment would be $2,463, or a savings of $198 a month. If your closing costs are $4,000, you'd break even on the refinancing costs in 20 months. Marrying the house and dating the rate might work in your favor if: You can afford a home you like at today's rates You expect to stay in the home for at least three to five years Your monthly rent is comparable to what it would cost to own a home You can refinance into a mortgage that carries a title insurance waiver, an appraisal waiver or other discounted closing costs On the other hand, this strategy may not be to your benefit if: You can't find a home that's in your budget and meets your needs You think you'll move for work or family reasons in the next three to five years Your monthly rent is significantly cheaper than your monthly mortgage payment would be You live in a state such as Florida or New York that collects a tax on refinancing — the extra cost can push out the break-even point Still not sure if this is the right strategy for you? Here are some different approaches you may want to consider: Wait for rates to fall: The major downside here is that home prices could rise while you wait, which could offset any savings you might gain by refinancing to a lower rate later on. Take out an adjustable-rate mortgage (ARM): These loans let you capture declines in mortgage rates without refinancing — although ARMs expose you to the risk of rates rising in the future. Pay for mortgage points: If you decide to go through with the home purchase, you can buy discount points from your lender at closing. These can lower your interest rate, often by 0.25% per mortgage point.
