As we are headed into Spring, we thought we would give you an update on what is happening with the Newcastle property market and what we can expect for the remainder of 2018.
Over the last couple of years, we have seen our market incredibly strong, with low interest rates, high auction clearance rates, low days on market with the increase in demand from property, along with the development of new infrastructure around the City. Where we are now feels more like a “normal” market place to me, back to where we were prior to this recent boom, where buyers are being asked to justify their spending and having the opportunity to research the market.
Transactions occurred at a sustainable rate with lots of possibilities around. This market provides a great opportunity for purchasing property and creating a strong platform for people to begin, or expand their journey in the Real Estate market.
Regardless of market conditions, there is always a need to buy and sell and I want to take this opportunity to remind you I am here to help! Should you need any assistance with your current home, investment property or looking to invest, please don’t hesitate to contact me.
Regardless of market conditions, there is always a need to buy and sell.
The Royal Commission into Banking
The banking royal commission was established in December 2017 and has been investigating banking practices of the big 4 banks – Commonwealth Bank, Westpac, ANZ Bank, and the National Australia Bank – together with other financial companies including AMP, BT Financial, Aussie Home Loans and St George.
The first 4 rounds of hearings have focussed on:
- Consumer Lending Practices;
- Financial Advice;
- Loans to small and medium enterprises; and
- Issues affecting Australians who live in remote and regional communities, relating to farming finance and interactions between Aboriginal and Torres Strait Islander people and financial services entities
The current round of hearings began last month and will focus on superannuation.
Changes in Mortgage Lending
One of the outcomes of the royal commission was a concern by the Australian Prudential Regulation Authority (APRA) to ‘ensure prudent lending is maintained.’ To this end, in March 2017 APRA introduced measures to limit investor and interest-only mortgage lending. Statistics published for the period ending December 2017 revealed encouraging results in this respect and, as of April 2018, APRA has lifted the restrictions on investor lending. Limits on interest-only loans will remain in place for now.
Find out more here.
Current Government Incentives
First Home Buyers Assistance Scheme
Exemption on duty for first home buyers of vacant land up to $350,000 with concessions available for land valued between $350,000 and $450,000.
Exemption on duty for first home buyers of new and existing homes up to $650,000 with concessions available for homes valued between $650,000 and $800,000.
First Home Owner Grant Scheme
A $10,000 grant is available to first home buyers of new homes only, which are valued at no greater than $600,000.
Find out more here.
If you are over 65 and thinking about downsizing, there’s a new incentive which may benefit you. As of 1 July 2018, it is now possible to contribute up to $600,000 of the proceeds of the sale of your home to your superannuation. You don’t even have to buy a new home after you sell your existing home. It’s only for contracts dated after 30 June 2018 so you won’t be eligible if you exchanged contracts before that date.
And, of course, there’s eligibility requirements so check them out here and speak with your financial adviser before you make any decisions.
Thank you for reading and please get in touch if you would like further information on the property market.