Summer is a great time of year to do a few jobs around the house. It’s also a good time to start planning ways to build some equity in your home with a simple renovation. Here are some strategies that can quickly build equity with a small renovation or even just a touch-up.

Landscaping
The first thing a new buyer looks at when they enter a property is the exterior and the gardens. Tidying up the garden and outdoor areas and making them into beautiful places that a family could enjoy is a great way to build appeal.
 
Convert the Laundry
These days, there’s less need for an entire room to be dedicated to a laundry. So, the space is perfectly set up to be converted into another bathroom or even an ensuite. Adding an additional bathroom can really increase the appeal of a property and give it a modern touch.
 
Remove Internal Walls
If there is the opportunity to remove an internal wall to open up the living area, this can really make a big difference. This is the type of renovation that might only cost a few thousand dollars, depending on the nature of the wall that is being removed, but could have a big impact on its value, as it can modernise an older style property. Remember that every property is a little different and it’s not always possible to do this.
 
Clean the Roof 
A very quick and easy way to make the exterior of your home more appealing is to wash the roof with a high-pressure cleaner. This method can turn an older roof into one that looks fresh and modern. Cleaning the roof is an especially good option if you’re looking to sell the property.
 
Kitchen/Bathroom
These are the classic two updates that have a huge impact on the state of a property. Potential renters will likely pay a premium for a new bathroom and kitchen, while the property will also be a lot easier to sell if both are modernised. Even the simplest kitchen renovation takes time and planning. You will need to make sure you have the budget in place to get the result you want.
 
Painting & Window Coverings
When it comes to value for money, you can’t go past a fresh coat of paint and new window coverings. While it will likely cost you a few thousand dollars to have a property painted by a professional, this is one job that you can take on yourself. New window coverings are also a great way to make your home look a lot more modern. If you’re looking to sell, you should consider investing in both.
 
 
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One of the most common new year’s resolutions is to try and save money. One of the easiest ways to save money is to take a look at your home loan and find some creative ways to cut down on your repayments. Fortunately, there are a number of different things you can do with your home loan to reduce your ongoing monthly repayments.
 
Get a Better Interest Rate
If you stick with the same lender for a long period of time, it’s very likely that you’re not getting the best rate you could be. By refinancing, you’re able to seek out a lower interest rate and that alone has the potential to save you money every month. Typically, you should be reviewing your home loan products regularly with the help of your mortgage broker and always looking for the best deal to suit your needs.
 
Use an Offset Account
If your home loan product doesn’t come with an offset account, it’s very likely that you’re missing out on some good opportunities to save money. An offset account is a lot like a transaction account. However, it has the added benefit of saving you interest on any funds that are sitting in the account as it works in conjunction with your home loan account. Given the financial environment that have seen savings accounts attracting incredibly low rates of interest, it’s well worth considering parking any spare funds in an offset account.
 
Make More Payments
A simple change like making fortnightly repayments over monthly has a huge impact on how much money you’re putting into your home loan over a long period of time. Instead of making 12 payments, you end up making 26 smaller payments, with the net amount paid being higher. This means that you’re paying down your mortgage faster and reducing your interest charges in the process.
 
Add Additional Funds
If you have the opportunity to pay down your mortgage with a large lump sum payment, this has the additional impact of saving you money on interest. These types of funds might come your way thanks to a bonus at work, a gift, an inheritance or even from the sale of an asset such as a car. The faster you can reduce your mortgage balance, the lower your interest payments will be.
 
Consolidate Debts
If you have a home loan and you also have high-interest debt such as car loans, credit card debt or personal loans, it might be worth looking at rolling all those debts into your home loan. By doing that, you’ll reduce your ongoing weekly interest costs which is money that you can then use to pay down those debts faster.

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​When you purchase a property with finance, the lender will typically order a bank valuation to help them ascertain the loan to value ratio (LVR) of your home loan. For new home buyers, this might be something that you’ve never thought about before, but the outcome of the bank valuation could have big implications for your home loan.
 
How does a bank valuation work? 
When you purchase a property that is subject to finance, the bank will order a valuation of the property through an independent valuer. The independent valuer will use a certain method to estimate the true value of the property.
 
A valuer could use a desktop valuation, where they estimate the property’s value based on comparable sales and never visit the actual property. Alternatively, they would do what is known as a kerbside valuation, where they will attend the property and look at it from the exterior to do their valuation.
 
The most common form of valuation is the full valuation, which involves the valuer attending the property and looking through it. They then formulate their valuation based on comparable sales of the other properties.
 
When the bank has the independent valuation, they use this figure to calculate the borrower’s LVR.
 
How does the bank valuation impact borrowing? 
When applying for a loan with a lender, a bank will normally want to see the borrower has a 20% deposit. This gives them a level of security in the event of a property price fall, or if the borrower defaults on their loan.
 
Borrowers can obtain higher LVR loans, however, they normally come with Lenders Mortgage Insurance (LMI). There are also other programs in place such as the FHLDS or specialist loans (like guarantor loans) that can help first homebuyers who need to take out higher LVR loans.
 
If a bank valuation comes in lower than the price you paid for a property, then you could find yourself in a situation where you have to make up the difference to ensure you are keeping within the LVR required by the lender. That could mean needing a higher deposit or looking at other options such as paying Lenders Mortgage Insurance (LMI). Both of which could cost tens of thousands of dollars.

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One of the key differences between buying at auction or buying using a private treaty is that a sale at auction is unconditional. That means, as a buyer, you’re not able to add conditions such as subject to finance or subject to a building and pest inspection. Therefore, you need to be prepared and organised when the time comes to make a bid at auction.
 
Here are some things you should do to best prepare when a house you want goes under the hammer.
 
Know the True Value
When a property is selling at auction, it’s important to have a realistic understanding of what that property is likely going to sell for. Typically, properties will sell for a similar price to comparable houses that have recently sold in the same area. The best way to identify comparable sales is to look at property sales in the same suburb, with a similar property type and land component as the real estate you’re looking to buy.
 
Understand Auction Day
Most people only buy a few properties over the course of their life. That means if you’re buying a home at auction, it’s likely you’re not going to be very experienced at the process. It’s a good idea to attend a number of auctions in advance so you can get an idea of how the process works and to help you feel more relaxed on the day.
 
Organise Your Finances
It’s vital that you have your finances in order before any property purchase, but it’s even more important when you are buying at auction, given the sale is unconditional. The easiest way to do this is to speak to a mortgage broker and start the loan preapproval process. The most important part of preapproval is that it should give you confidence you can likely get a home loan when you bid at auction. However, it will also give you clarity around exactly how much you can pay for a property.
 
Understand the Conditions
If you are to bid at auction day, you will need to register with the sales agent and make yourself familiar with the conditions of sale. It’s vital that you review the conditions of sale as it will outline when and how much deposit is to be paid. If you’re unsure about anything, consider getting the documents reviewed by a professional. If you want any inspections done, such as building and pest, it’s up to you to take care of that prior to auction day.
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The holiday period is normally a time when people spend more hours at home and some start looking around for a new car. If you’re looking at a loan to purchase a new or second-hand car, it’s important to consider the best way to finance it. The most common ways to buy a car is with cash, or with the assistance of a loan. Which will likely either be a car loan or a personal loan.
 
Personal Loan

Traditionally, personal loans have been used for things like weddings or holidays. However, it is possible to use the funds to purchase a car.
 
The great thing about using a personal loan to buy a car is that it can be faster to obtain. You then have the flexibility to spend the funds from the personal loan as you see fit. However, this might cost you in the long run. A personal loan is typically, unsecured debt. This means that there is nothing backing the loan other than your ability to pay it off with your income.
 
From a lender’s perspective, this is a far riskier type of loan, as there is no collateral in place, in the event that you lose your job and are unable to make your regular repayments. Because of the additional risk, a personal loan will normally attract a higher interest rate which will then mean you’re going to pay more in interest over the life of the loan.
 
Given that a personal loan is more flexible, you can use the balance for things aside from a car, however, this results in more debt that you’ll need to pay off.
 
Car Loan

When you take out a car loan it will typically be secured by the car itself. This gives the lender a degree of certainty around the loan.
 
Because of this, you will likely be paying a lower interest rate than you would with a personal loan. However, the process might take a little longer as there will likely be some requirements from the lender around what type of car you’re able to purchase.
 
The other consideration with a car loan is where you get it from. These days many people look to get finance through the dealer. While this might be the easiest option, it will likely not be the best deal to suit your needs.
 
Dealer finance is another way a dealership can increase their profits and they are not working with multiple lenders to find the best deal. If you are looking to take out a car loan, it’s best to speak with a broker in advance and gain a pre-approval.
 
You’ll then know that you’re getting the best option available to you and also what your budget is going to be before you start the search for a new car.
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Leading Australian valuer Knight Frank believes the sharp growth we’ve seen in industrial assets is set to continue in 2022.
 
Industrial assets have seen growth of around 15% over the course of 2021 and Knight Frank believes this is a trend that can continue for years to come.
 
Ben Burston, chief economist at Knight Frank Australia, forecasts capital growth at 6% in 2022, as well as a rent rise of 6% in Melbourne, 5% in Sydney, 4% in Brisbane and 3% in Adelaide.
 
Mr Burston suggests the recent growth we’ve seen in industrial assets has come about from investors being prepared to pay more for the same streams of income. He believes this is going to change with price growth likely to come from tighter supply and upward pressure on leases, with demand starting to drive up rents.
 
According to Mr Burston, leasing take-up volumes are 31% above their long-run average on the east coast, pre-leasing activity for new buildings grew by 11% in the year to October 2021 and demand from large users for industrial real estate is likely to exceed supply in 2022.
 
Knight Frank also notes, that there is likely to be an increasing shift towards local manufacturing on the back of the ongoing supply chain issues faced throughout the past 2 years.
 
Mr Burston also believes the office market is set for a turnaround in 2022 after a long period of high vacancy rates. He says that pent-up demand for office space will boost absorption rates and drive market recovery, with the flight to quality indicating that premium and upper A-grade space will be at the forefront of the resurgence in demand.
 
Many businesses that require office space have been waiting for conditions to improve and with the opening of international borders and lockdowns likely to have ended, there will be a push for companies to upgrade their space and return to their respective CBDs.
 
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Despite a tough year for many businesses, Australia recorded a record level of foreign investment in commercial property.
 
According to analysis from CBRE, 2021 saw $16.6 billion in office, retail, industrial and hotel assets changing hands, outstripping the previous record high level of $15.5 billion achieved in 2015.
 
CBRE notes that while many experts predicted closed international borders would hinder international investment in commercial property, the opposite turned out to be true. This is due to many international investors partnering with local fund managers to identify commercial property investment opportunities.
 
In terms of which countries are most actively investing in Australian commercial property assets, North America accounted for the highest share at 39% of all funds invested. North America has been the number one country looking to invest in Australian commercial real estate over the past five years. This year’s level of investment from North America was up sharply from pre-pandemic levels.
 
In second place was Singapore, which contributed 35% of this year's activity, also up on the pre-pandemic average.
 
According to CBRE, some of the major transactions this year involving foreign investors include the $925 million sale of a 50% stake in Grosvenor Place to Blackstone, the $3.8 billion sale of the Milestone industrial portfolio to a partnership between GIC and ESR Australia, the $538.2 million sale of a half stake in Sydney's Queen Victoria Building, The Strand Arcade and The Galeries to a Link REIT/EG Funds partnership and the $315 million of the Sofitel Wentworth Sydney hotel to KKR, Futuro Capital and Marprop.
 
Looking at the different sectors and it has once again been Industrial & Logistics that were the most invested asset class with 44% of total sales. The office sector was closely followed in second place with 43% of total sales.
 
Despite having a tough two years, the retail sector is expected to see renewed interest in 2022 with the reopening of international and state borders and the end of many other restrictions.
 
CBRE expects Australia to continue to see strong international capital inflows into commercial property market next year, with the market being viewed as an attractive proposition given the available returns and the relative strength of the economy compared to parts of Asia, North America, and Europe.
 
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​The High Education Contribution Scheme (HECS) or Higher Education Loan Program (HELP) is effectively a Government loan that enables people to afford the costs of higher education.
 
The program works by allowing people to pay back their student loans at a time in the future when they are earning enough money to comfortably cover the payments.
 
In the last decade, the cost of higher education has skyrocketed, and this has forced many students to take up a program like HECS or HELP, so they can continue their education.
 
Once they have completed their education, most people never really think about the impact of HECS debts, as it is normally something that is taken care of at tax time. The repayment rates are generally quite low and not overly burdensome for most people.
 
However, what many people don’t realise is that these student debts will have an impact on your ability to borrow money when the time comes to buy a house.
 
This can be particularly impactful for people like first home buyers, or even those on high incomes, as the repayment rates increase sharply.
 
When banks and lenders assess your ability to service debt, what they are doing is determining your normal income and expenses, with the understanding that you will be able to service debt with spare income.
 
If you are carrying a large amount of student debt that you are required to pay back by law, it can weigh heavily on your ability to borrow.
 
For a lot of people, a few hundred dollars per week can be the difference between buying a home and not being able to get finance. For that reason, it is very important to understand what your student debt looks like and the level of repayments that you’re required to be making.
 
This is the current repayment table.

If your income falls below $47,014, you’re not required to pay back any of your HECS debt. This is the category into which people who are new to the workforce will most likely fall.
 
By the time you are earning around $100,000 per year, you will be required to pay back approximately 7.5% of the total outstanding student debt.
 
For a HECS debt of around $50,000, that could see your borrowing capacity reduced by anywhere from $75,000 - $100,000, which is quite significant if you’re looking at buying your first home.
 
The reality is that the majority of Australians will have some form of student debt that they are required to pay back.
 
The best option is to always speak to your mortgage broker and get a clear picture of your borrowing capacity well before you even look to put in an offer on a property. That way, regardless of your situation and current income and expenses, you will know where you stand.


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One of the most powerful elements of property as an asset class is the fact that you can use leverage.
 
Not only are you able to access finance through a lender, such as a bank, who will lend you 80% or more of the value of the property, but you can also access the equity that has been created in other properties as well.
 
For example, if you purchased a property for $500,000 that increased in value to $700,000, then you’ve seen a $200,000 increase in equity.
 
Assuming that you initially contributed a 20% deposit which was $100,000, that means you’ve got a spare $100,000 of equity sitting in the property that you can use after it increased in value.
 
Equity is simply, the value of the property, less the outstanding debt you have on it - which is your mortgage.
 
By accessing the equity in your property, whether that’s your PPOR or another investment property, is how investors are able to buy multiple properties in a short space of time.
 
Equity is also valuable because you can also use it for other purposes as well. For example, you could use it to renovate your current property and increase value in that way or use it to assist with the costs involved in a subdivision.
 
What should you consider before accessing equity?The reality is that withdrawing equity to use elsewhere does add an element of risk.
 
It’s important to get advice from a professional such as a mortgage broker, before deciding to go down that path.
 
There are also some considerations that you will need to take into account.
 

1. When you buy your first property, you might be able to access very high LVRs. For first home buyers, this can be as high as 95% or even more in some instances. When you look to accessing equity in another property, most lenders will limit that to only 80%, to make sure they have a degree of comfort should market conditions change or your personal situation does.

 

1. If you are able to go above that 80% threshold, you would be looking at paying Lenders Mortgage Insurance (LMI), which can be a sizeable upfront cost.

 

1. You still need to be able to service the loan that you take out. Just because you have the equity available to you, a lender will still be assessing your financial situation and your ability to service any debts before they let you access any equity you have in other properties.

 
With interest rates at record low levels, and restrictions around lending being reduced by various Government bodies in recent years, getting finance is easier than it has been for a long time.
 
However, it is still very important to get the right advice before looking to access any equity you might have.
 
By using your equity, you are effectively increasing your leverage. This is a very powerful tool to jump into your next property far sooner than if you had to save up a deposit.


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As the Australian economy gets back to normal on the back of the COVID-19 enforced shutdowns and restrictions easing, there is an expectation of interest rate rises in the future but borrowers are still sitting in an enviable position.
The official cash rate is still at a record low, of 0.1 per cent. What that means for borrowers is that this is one of the best times since the 1950s to access money.
If you’ve already got a home loan, then you should consider refinancing, to take advantage of the current low cash rate and to make sure you’re getting the very best deal you possibly can.
However, there are also several other benefits to refinancing.
Better Interest Rates
The first thing to understand is what exactly it means to refinance. Basically, refinancing is just taking out a new home loan on the same property.
The first and most obvious reason to do that is to get a lower rate of interest. Lower interest rates mean lower mortgage payments, which can mean thousands of dollars being saved over the lifetime of your home loan.
A number of lenders offer great introductory rates when you take out a loan with them. However, unlike with other industries, you’re not rewarded by sticking with one lender for the long term. In some cases, it’s the opposite. Those who have not reviewed (or refinanced) their loans can get stuck with far worse deals than necessary.
We must remember that banks and lenders are businesses and sometimes it’s far more valuable to attract new clients than worry about the ones’ you’ve already got. This is where a good mortgage broker can really help you with sifting through the fine print on suitable loans.
Better Loan Products
Back in our parents’ day, it was really just a matter of taking out a principal and interest loan and paying it off over the next 30 years. Fortunately, things have changed for the better and now lenders have a host of great products that can really save you money on your home loan.
A great example would be a 100% offset account attached to your mortgage. An offset account is a transaction account meaning you can use it for everyday things. However, because it is linked to your mortgage it attracts the same higher rate of interest as your mortgage.
More accurately, it saves you interest, in that you effectively only pay interest on the difference between your outstanding loan and your offset account balance.
An offset account can really supercharge your progress if you park your spare money in there and use smart money management techniques.
Access to Cash
If we’ve learnt anything during the COVID crisis, it’s that having some money tucked away for a rainy day is important.
Fortunately, if you’re a homeowner who has owned their property for any length of time you might very well have built up some equity in your property. That’s certainly the case for owner-occupiers and investors in large parts of the east coast, particularly in Sydney and Melbourne who have seen median homes values rise dramatically in the last decade.
By refinancing, it’s possible to access that equity and draw it out as cash. That money can then be used to buy another property as an investment, or as required.
It’s quite possible to access equity and leave it in an offset account. That way it’s not costing you anything but it’s there if you need it. Again, speaking to a mortgage broker will be the best way for you to find out what you can do, given your individual circumstances.
Consolidate Debt
Not all debt is good debt. When you buy a house to live in or as an investment, that’s an example of good debt.
The asset you’re purchasing has a high likelihood of appreciating in value over a long period of time, which will leave you well placed.
Using credit or a loan to buy things that do not appreciate, like a new car or online shopping, will get you into ‘bad debt’. These things will not only depreciate in value almost instantly, but the debt comes with a high rate of interest.
High-interest debt not only weighs heavily on your borrowing capacity, but it is expensive to pay back. An option when you refinance is to roll some of these debts into your home loan and capitalise on the lower rates of interest.
This is a great time to be borrowing money and it hasn’t been this good since the 1950s. With the economy facing a short-term downturn, it’s more important than ever to have access to cash for a rainy day. There’s plenty of additional benefits to refinancing and a mortgage broker will be able to get you on the right track.

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When the time comes to apply for a home loan, many would-be borrowers are shocked to learn that a few simple mistakes have cost them the chance to get finance.
 
Lenders have several checks they run on all applications and if you’ve made these errors you might be out of luck.
 
Fortunately, there are some things you can do to turn these things around and get approved.
 
Not Paying Bills on Time 
When you go to apply for a loan one of the first things a lender will do is look at your credit score.
 
If you pay bills late, you might find yourself with a number of defaults. This is when a payment is well overdue. Defaults will hurt your credit score and can make a lender less likely to lend you money.
 
It’s also important to note that there is so much data available to credit agencies these days, that they can tell just how efficient you are at paying your bills. If you are always late that doesn’t bode well for them, when the time comes for you to pay them back.
 
Too Many Credit Cards 
These days, just about anyone can get a credit card. In fact, many banks will send out letters offering to increase your credit card limit or give you another credit card.
 
The problem is that while it might be great to have a $50,000 credit card limit when the time comes to borrow money from a bank, this limit will impact your chances.
 
The bank assumes you have maxed out your card and will reduce your borrowing capacity accordingly.
 
These credit card limits are often the difference between getting approved or coming up short.
 
Short-Term Loans 
While it might be nice to drive the latest car or take out a personal loan for a holiday, these types of debts could be weighing you down.
 
Personal loans, car loans and credit card debt all attract high interest rates and those monthly expenses add up and can really hurt your borrowing capacity.
 
Lenders also don’t like to see these types of debts as they suggest you’re not someone who has good money management skills.
 
Applying for Too Many Loans 
Credit is often available to those people who need it the least.
 
If you’ve been applying for loans regularly and even worse, if you’ve been applying for loans and getting declined often, that is going to make it much more difficult to get a loan when you really need it.
 
Every time you apply for credit it shows up on your credit record which lenders can easily access. Getting rejected or making lots of small applications for credit is viewed negatively by lenders and also tells them a lot about your money management habits.
 
The best thing to do is to seek a pre-approval before officially applying for a loan. That way your mortgage broker can quickly and easily tell you how your application is looking and suggest changes to the way you’re managing your finances, if a loan is unlikely.
 
If you can clean up your finances for a few months, a lender will be far more willing to take you on, as opposed to someone with a patchy credit record and lots of short-term debt.

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In years gone by, homebuyers would stick with the same bank for the life of their home loan.
 
While this might be an easier option, you will likely end up paying far more in interest than you otherwise would, if you found a more competitive interest rate.
 
There are many reasons that people regularly refinance their home loans; doing so could benefit you in many ways.
 
Saving Money
 
As mentioned, if you are paying a lower interest rate, you are effectively paying less interest over the life of the loan.
 
At the same time, this money that you’re saving could be used to help pay down the principal component of the loan, meaning that you will also pay off the outstanding debt faster. This is another reason it’s worth looking at a more competitive interest rate.
 
On an average 30-year loan, you can end up paying just as much in interest as you do in debt repayments, so every little bit you can save matters in the long run.
 
Fixed or Variable
 
In the current environment, we’ve seen interest rates drop to record low levels, and many believe that the only way is up.
 
When you refinance your home loan, you’re effectively taking out an entirely new loan product. That means you can change all elements of it, including things such as fixed or variable interest rates or even whether to pay down interest only.
 
While everyone’s situation is a little different, it’s important to understand that you’re not stuck with a basic 30-year variable loan if you don’t want to be. In fact, when you refinance, you should also be looking for superior loan products that contain options such as an offset account, which also helps you reduce your interest payments and saves you money over time.
 
Access Equity
 
If you’ve owned a property for a reasonable length of time, it’s likely that the value of that property has increased.
 
By refinancing, it’s possible to access some of that equity increase and put it towards other things.
 
Most people use the equity to put down a deposit on another property or even to renovate their current home. The ability to access equity is one of the most powerful tools at the disposal of property investors and a big reason why you should look to refinance.
 
Debt Consolidation
 
The great thing about home loans is they come with some of the lowest interest rates you can get, certainly in comparison to things like credit cards, personal loans or even car loans.
 
When you refinance, it’s a great opportunity to roll any of those high-interest debts into one place and get a far lower interest rate.
 
You are effectively paying out those other debts and using the equity in your current home to do it. In the long run, this saves you money, and it is money you can use to pay down your home loan.
 
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The majority of Australian homeowners can be classified into a few different categories. There are first home buyers, upgraders, downsizers or investors.
 
The data on homeownership in Australia would suggest that the vast majority of Australians fit into just one of these categories. Less than 10 per cent of the population owns an investment property, which means that for the most part, Australians work their way up the real estate ladder by following the tried and true process of upgrading until retirement.
 
However, there is a section of the population who doesn’t continually upgrade their properties by selling their previous homes. These people effectively turn their ‘principle place of residence’ (PPOR) into an investment property.
 
So, is this something you should consider when the time comes to move into a bigger and better home?

Finances 
First and foremost, the decision as to whether to sell or hold your former PPOR will be based predominately around your finances.
 
The first consideration will be whether you have the income to service the debt on two homes, one of which being an investment property. It’s important to note that many lenders will assess only 70 per cent of any rental income, making it a little tricky at times.
 
Similarly, you might need to sell your previous home to use some of the equity as a deposit on your next bigger and better family home.
 
Assuming you have the means to hold onto the property, there are some important things to look at and consider.

Opportunity Cost 
Just because you can hold onto your former home as an investment, doesn’t mean you should.
 
You will need to carefully assess what the outlook for your house is; both as a rental property and in terms of potential capital growth.
 
If your property is in an area that has seen strong price growth recently, then perhaps in the short-term that area might not be as likely to see significant price appreciation.
 
Similarly, if you own a property that is not fitting in with what buyers are looking for, then the demand, both as a rental and for future growth, might be limited.
 
When assessing your former PPOR, you need to weigh up the pros and cons of keeping it versus the opportunity of investing in different areas.
 
Other suburbs or even states might be at different phases of their growth cycles, and also might be offering higher rental yields, which would make it easier to service any debt. Therefore, it is vital that you weigh up the opportunity cost of holding.

Benefits of Holding 
By far most of the benefits of holding onto your former PPOR as an investment, come down to the savings you will be able to achieve, in terms of both taxes and transaction costs.
 
When you buy and sell property, there are significant costs involved. You will incur selling agent fees, marketing costs and other expenses such as auctioneer fees and settlement costs.
 
One of the other big benefits of holding onto a property that was previously your PPOR, is that you are able to enjoy the capital gains tax exemptions for a period of time.
 
In Australia, the ATO has what’s known as the six-year-rule, which allows your former PPOR to be exempt from capital gains tax for a period of six years. After this period of time, your property will be treated as a normal investment property and the sale will be seen as a capital gain for tax purposes. This can be a significant cost and something you need to consider. Of course, if you don’t sell the property, then you won’t need to pay any tax.
 
Whether you want to sell, hold or build a large investment portfolio, it all comes down to your own personal goals. There is no right answer, but the first step should always be speaking to a mortgage broker to understand your borrowing capacity and identifying what you are looking to achieve.
 
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Home loans have come a long way in the past few decades, and now there are a range of features you can access that can really benefit you in the long run. Fortunately, there are a few key features that you need to know about that can make all the difference and potentially save you thousands of dollars over the life of the loan.
 
Offset Account 
An offset account is one of the most common features of a standard variable home loan, and it’s also one of the most effective. An offset account is like a transaction account that works in conjunction with your home loan. You effectively save interest on money that you have sitting in your offset account, while still retaining full access to it, as you would with the account you use for everyday purchases or even your savings account. While there are different types of offset accounts, a 100% offset can be the most beneficial for some, as it saves you the same rate of interest that you’re paying on the home loan.
 
Unlimited Additional Repayments 
If your goal is to pay down the balance of your home loan as soon as possible, you’re going to want to be able to make frequent repayments over and above the minimum requirements. Some home loans don’t allow you to do this or have a cap on the additional amount you can repay. Fortunately, there are plenty of products that do offer unlimited additional repayments, and this can save you both fees and interest over the long term.
 
Split Loans 
If you’re unsure as to whether you should be fixing your home loan, the good thing is, it is possible to have the best of both worlds with a split home loan. As the name suggests, this type of loan allows you to split the loan between variable and fixed interest, so there is a degree of certainty around your repayments while still having some level of flexibility that comes with the variable loan.
 
Redraw Facility 
If you’re someone who is likely going to be paying back your loan faster than the term dictates, a redraw facility might be something to consider. In essence, a redraw facility is very similar to an offset account, in that you have access to all the money you repay over and above the minimum. If you don’t need access to those extra funds, but want to have the money there for a rainy day or an emergency, then a redraw facility is a very effective option.
 
Package Deals 
If you have a range of different loans, such as car, personal and home loans, then it is possible to package them all together. By doing this, you will likely be able to get lower interest rates and also save on the fees you would pay should you elect to take them out separately. The main catch with a package deal is that you are a little more tied to that one lender than you might be otherwise. It’s always a good idea to review your loans regularly with your mortgage broker.
 
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Investing in property in Australia has proven to be a sound long-term investment, with prices growing steadily for many decades. However, when the time comes to choose exactly where you should be buying a property, there are a myriad of things for you to think about.
 
One of the very first questions you’re going to need to consider is whether to buy in a capital city or a regional area. While there is no correct answer, there are advantages and disadvantages to both.
 
Investing in a Capital City
 
For the most part, capital cities grow in value at a faster rate than their regional counterparts.
 
Cities like Sydney and Melbourne have traditionally been locations that have seen heavy levels of migration, both from overseas and interstate. With limited supply, in the form of land, prices have been trending higher for a long time, and the growth rates are very strong.
 
Your blue-chip areas of most capital cities normally see steady growth while also being less prone to falling during times of broader market weakness.
 
On the flip side, because these prices are higher, rental yields are a lot lower. While we are in a low interest rate environment at the moment, historically blue-chip areas will be negatively geared investments.
 
Another advantage of properties located in the city is that there is normally a steady stream of tenants available. That means properties will be easy to rent out and you can usually find high-quality tenants.
 
Investing in a Regional Area
 
One of the main reasons people choose to invest in regional areas is the fact that rental yields are often far higher. It’s not unusual to find rental yields of 5-6% in regional areas, which, in the current environment, normally means your investment will be positively geared and putting cash in your pocket each month.
 
The other side of this equation is that the growth is normally not as high as the blue-chip areas of our major cities. However, when you have a strong yield, it’s a lot easier to hold onto your investment property.
 
The other clear benefit to investing regionally is that the price of the properties is normally far lower.
 
If you have limited borrowing capacity, you might not have the option of investing in a major city to begin with. In many regional areas, you can buy properties under $300,000 which makes them affordable to new investors.
 
City vs Regional
 
While there is no best place to invest, as everyone has their own goals and circumstances, it is possible to get the best of both worlds.
 
There are cities in Australia that do have very high yields, and there are also regional areas that have a track record of strong capital growth.
 
Many property investors look for a combination of these factors as it allows them to grow their equity while also being able to service their loans and continue to borrow.

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​Over the past few years, it’s become more common for parents to help their children purchase a property. As property prices have risen sharply, particularly in places like Sydney and Melbourne, entry into the property market is not as easy as it was a generation ago.
 
More and more parents are helping their children get a foot into the market, given that prices continue to rise each year. Here are some ways parents can help their children get that first property.
 
A Guarantor Loan
A guarantor loan is a way that a close family member (normally parents) can help provide a deposit for a home loan.
 
Generally speaking, lenders like to see that a borrower is able to come up with a 20% deposit on the property they wish to purchase. This shows the lender, that they are a borrower that can manage money, while it also gives the lender some security in the event the borrower is unable to meet their repayments and they have to step in.
 
A guarantor loan works by having a parent put up equity in their own property (normally the family home) as a deposit. This means the borrower can potentially get a loan and avoid things like Lenders Mortgage Insurance (LMI).
 
There are some considerations with this type of strategy. Significantly, the parent’s property is at risk in the event the children can’t meet the repayments. A guarantor loan also means you are effectively borrowing nearly 100% of the property’s value.
 
The ability to get a loan is still dependent on the borrower’s ability to service the loan, based on their current income and expenditure.
 
A Gift
In many instances, parents will simply give their children a sum of money to use as a down payment on their first property.
 
The main issue with this is a lender will likely still want to see that a borrower has some kind of genuine savings. Genuine savings is really just money a borrower has saved up over a period of time. Ideally, this would be the 20% deposit that they had been working towards saving.
 
Lenders will typically want to see that these funds have been sitting in a bank account for some period of time. The policy with genuine savings and gifts varies between lenders and it’s always advisable to speak with a mortgage broker about your personal situation.
 
Property co-ownership
While not as common, it is possible for parents and children to own a property together.
 
Before entering into this type of arrangement it’s advisable to speak to an accountant who can direct you on the correct tax structure to use. This is due to the capital gains implications that might not be present with just a single property owner or a couple.
 
Another consideration with property co-ownership is how the arrangement works on a practical level. Who pays what and when? If the children are living in the property, are they going to be paying rent to the parents and how much? These are things that you will need to outline, even before you begin searching for a suitable property.
 
The other consideration will be how do you actually finance the property? If both the parents and children have regular incomes to service any debts, then it might not be an issue. However, if one party does not have a regular income – for example, if the parents are retired or the children are students – then this might impact their ability to borrow.

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​As we know, all borrowers have different circumstances and that’s why there is never a one size fits all approach when it comes to lending.
 
For the majority of full-time employees with a good credit history, you will likely have a range of options and be able to look at a regular home loan.
 
To access a regular home loan, you might only need three months of payslips or two years of tax returns. Generally speaking, regular home loans are a lot more stringent and that’s why we see some regular home loans with very low interest rates.
 
Unfortunately, for the self-employed and business owners, it’s not always possible to present two years of tax returns or payslips. For these types of borrowers, there are other avenues to getting finance for a home, one of which is by providing alternative documents (alt-docs).
 
Lenders that offer alt-doc loans will normally require three months’ worth of personal bank statements and six months’ worth of business activity and business bank statements, or potentially even an accountant’s declaration.
 
Given the borrowers’ income is not as black and white as a PAYG employee, interest rates will normally be higher, while there might also be higher loan application fees and setup costs.
 
It is important to note that just because you might be self-employed or a business owner, you don’t automatically need to go for an alt-doc loan. If you’re able to produce two years of tax returns and have a good credit history, then you should be able to qualify for a regular home loan at lower interest rates.
 
However, if your business has recently seen a large increase in revenue and you want to access a larger loan, then it might be worth looking at an alt-doc loan. Similarly, if you’ve had credit issues in the past that you’ve been able to turn around, then an alt-doc loan might work for you.
 
There are also a few myths out there, surrounding alt-doc loans. The main one is that you can get a loan with no documentation at all. Those days are long gone and you will need to be able to prove that you have the means to service the repayments. The second myth is that the big banks don’t take on these types of loans. In many instances, the major banks are able to look at lending to people without the full documentation, given they have the size and diversity to handle different amounts of risk.
 
Once again, the key is to talk to a mortgage broker who can quickly understand your personal circumstances and match you with the right solution for your needs.
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Buying a home is typically the most expensive purchase you’re ever going to make. The thing that makes property a powerful investment is that you can borrow a large portion of that cost from a bank. However, there are still a number of other costs that homebuyers need to be aware of before they start their search for a property, as those costs could impact what they can afford.
 
LMI
 
While banks are prepared to lend a large portion of the value of a property, they still like to see that a borrower is able to contribute 20%. That deposit shows them that the borrower is capable of managing money effectively, and it also protects them in the event they do default.
 
It is possible to borrow more than 80% of the value of the property; however, you will likely be required to pay lenders mortgage insurance (LMI). LMI is a one-off upfront premium that is put in place to protect the lender. The cost itself varies, depending on how much you are looking to borrow, the LVR and even the location of the property. This can be a sizeable amount and needs to be factored in prior to starting your property search if you have only a small deposit.
 
Valuation/Loan Costs
 
To have your loan application formally approved, one of the conditions is usually that the property undergoes an adequate bank valuation. This gives the lender an indication that you have paid a fair price for the property.
 
There are different types of valuations a lender will require in terms of how the property is valued. However, as the borrower, you will need to pay those costs. These fees are also on top of any loan establishment or application fees.
 
Insurance
 
When you are approved for a loan and ultimately settle on the property, you need to immediately start thinking about looking after that property. The first thing you will need to do is to make sure you have the right types of insurance in place.
 
The most important is normally home and building insurance as this will cover the structure itself. If you are buying a freestanding home, this will be your responsibility. If you’re buying into a strata complex, this might be recovered in the strata fees.
 
On top of this, you can also consider contents insurance or rental insurance if the property is for investment purposes.
 
Property Management
 
If you’re buying an investment property, it is easy to forget about the upfront costs associated with property management. A property manager can be a valuable resource in helping you take care of your asset while also making your life a lot easier. However, you will need to pay them for various services.
 
Property managers charge their fees based on a percentage of the rental income, usually somewhere between 5 - 10%. There are several other upfront costs as well, such as the letting fee, which is normally two weeks’ rent, the cost of getting professional photos done, and various other admin costs. You should expect to receive no rental income for around two months after taking into consideration the upfront fees and the monthly payment cycle most property managers use.

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​One of the biggest mistakes new home buyers make is not having their finances organised prior to starting their search for a property.
 
Many people assume that if one has a good income, a home loan is simple to get. Unfortunately, there are a number of steps in the process, and it often takes many weeks or even months to get everything formally approved.
 
By far, the best option is to seek pre-approval before even starting the search for a new home. A pre-approval will allow you to know exactly how much you can spend and give you confidence that your loan application has a high chance of success when the time comes.
 
However, there are still several steps you can take to fast-track the home loan application process, whether that’s pre-approval or unconditional approval.
 
Boost Your Deposit
 
Lenders like to see, firstly, that a potential borrower can manage money and that they represent a low level of risk.
 
The best way to do this is to come up with a larger deposit. Normally, lenders like to see 20%, and anything less than that will mean that you’ll likely be forced to pay Lender’s Mortgage Insurance (LMI).
 
LMI is a one-off insurance premium that the borrower is required to pay to protect the lender in the event of a default.
 
If you’re putting down a larger deposit, you will not need to pay LMI, which makes the loan application process easier. It also opens you up to more lenders who will be willing to take you on.
 
Reduce other debts
 
When a lender is assessing your loan application, they are really assessing how likely you are to be able to continue to make repayments on any money they lend to you.
 
If you already have large debts, particularly unsecured debts such as credit cards, it can make your application less appealing.
 
If you are in a position to do so, it is well worth paying down all of your smaller debts or consolidating them.
 
It is worth noting that lenders are also very interested in your overall borrowing limit when it comes to things like credit cards. Even if you don’t use that limit, they assess you as if you do. If you don’t need that extra capacity, it might be worth reducing your credit card limits.
 
Check your credit record
 
The very first thing most lenders are going to do when you apply for a home loan is take a close look at your credit record and credit score.
 
Your credit record is your track record of how you have managed credit in the past. It contains a list of all the times you’ve applied for credit, records any missed payments and even shows if you’ve paid on time or early.
 
The good news is that if you’ve been diligent with your repayments in the past, this will be reflected in a good credit score. However, if you’ve had a few issues, you can still turn things around.
 
Start by making all your repayments on time and pay your bills the day you receive them. If you’re having trouble with current debts, it might be worth looking to consolidate them and tidying up your finances.
 
Make sure your credit history is in order, and this will dramatically speed up your application process.

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​We all want to get a bargain when we buy a property, however, the reality is that you need to meet the vendor halfway in most cases. Knowing how much you should offer and exactly where you need to meet the vendor when it comes to price comes down to asking a few key questions.
 
What’s the basis for the asking price? 
Just because a house is listed at a certain price by the sales agent doesn’t mean the price is a realistic one.
 
The key to understanding whether a price is fair and reasonable is to do your market research beforehand.
 
These days it’s easy to access sales data on the real estate portals and you can quickly and easily see what other comparable properties have been selling for in the same area.
 
Try and find a house of similar age, land component and condition that has sold in the last three to six months, and present those to the agent when making an offer.
 
Are there multiple offers? 
If you’re the only one putting an offer in on a property, then there is a fair chance you’ll be able to negotiate a lower price.
 
If there are multiple parties interested then the odds of you getting a bargain are slim.
 
At the end of the day, buying and selling is about supply and demand and if you need to compete for a property, then you likely won’t be able to put in a low ball offer successfully.
 
How long has the property been listed? 
If a property has been sitting on realeaste.com.au for six months with no interest then there is a fair chance the property is overpriced.
 
At that point, the vendor might be willing to accept something less then they had previously hoped for and meet the market’s expectation.
 
If they aren’t then it’s likely that they are simply asking too much and are not prepared to budge.
 
What’s the vendor’s motivation? 
How eager is the vendor to get a deal done? If they need to sell the property quickly for family or financial reasons, then you might be able to put in a lower offer with good terms.
 
If the vendor has a set price in mind and no reason to sell, then there is not much chance of getting a low offer through.
 
Has the asking price changed? 
If the asking price is slowly dropping each week or month, then it’s fair to say that the property was initially priced too high, either by the agent or the vendor.
 
This also shows the vendor does want to sell and that they are prepared to be flexible on what they accept.
 
In this case, a low offer might be something that the vendor is prepared to consider.

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Typically, the holiday period is a time of year where people spend the majority of their money and increase their debts.
 
Come the start of the new year, many people can find themselves struggling with that additional debt burden and often turn to short-term, payday loans to try and help them get by.

What is a payday loan? 
A payday loan is a short-term loan for small sums of money that, more often than not, need to be paid back quickly.
 
Frequently, payday loans are up to $2,000 which are then to be paid back by your next payday, hence the name. There are also payday lenders that let you borrow up to $5,000, with longer loan terms.
 
These loans are usually backed by the fact that you have some form of income and can pay them back within weeks.
 
When a loan application is approved with a payday lender, you will generally receive the funds within a few hours.
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Costs of Payday Loans 
Payday loans often come with some of the highest costs of any loan type, which is due to a number of factors.
 
Firstly, the amounts are small and are repaid quickly - payday lenders are not able to charge interest on small loan amounts.
 
Secondly, those applying for payday loans generally have poor credit ratings and are not always able to get finance through traditional means.
 
According to ASIC, payday lenders are limited in what they can charge on loans under $2,000 and come with these terms:
 
-                    a 20% loan establishment fee
-                    a 4% monthly account keeping fee
-                    a 200% fee for defaults
-                    a Government fee
-                    expenses, if the lender needs to take a borrower to court
 
Will a Payday Loan Impact My Credit? 
All lenders will examine your credit score, which is effectively your track record of paying off debts in the past.
 
They will also assess the types of debts you currently carry, as well as how they impact your disposable income.
 
A lender wants to know that you are someone who manages money well and if you’ve been using payday lenders to get through when money gets tight, this might not be something that is looked on favourably by banks.
 
If you are wanting to get a home loan in the future, it is worth creating a budget to ensure you don’t need to use payday lenders to pay bills for a number of months before applying for a loan or even seeking pre-approval.
 
If you’re struggling with debts, talk to a mortgage broker and find out how consolidating your debts might be another way to better manage your current debts, rather than take on more.

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​Arguably, the most important element of the property journey is obtaining finance. One of the most confusing parts of the process for first home buyers is the difference between the various types of approvals.
 
Most commonly, when you are looking to obtain finance to purchase a home, there will be two separate approvals that you’re likely to encounter, and it is vital that you understand the differences between them.
 
Conditional Approval 
If you choose to purchase a home using a ‘subject to finance’, without some form of indication from a lender that you will be able to access that finance, you could find yourself in a tricky situation.
 
Commonly, homebuyers will look to gain conditional approval for a loan, which is more commonly known as a pre-approval.
 
A pre-approval is a powerful tool for the homebuyer, as it gives them a very clear indication from a lender as to what they will be able to borrow, based on their personal and financial situation.
 
Once you have submitted your loan documents and all the required documentation, such as payslips, group certificates and/or bank statements, the credit team will assess your application and if you are successful, you will be issued with a conditional loan approval.
 
What this means is that a bank will pre-approve your home loan, up to a certain borrowing limit, subject to you finding a property that meets the agreed criteria, and provided that your situation doesn’t change in the coming months.
 
Generally, a pre-approval is valid for three months, but it is merely an indication, and not a guarantee that you will get a loan.
 
A pre-approval is a powerful tool for you as a buyer, because it makes you appear serious in the eyes of vendors and sales agents, whilst also giving clarity as to just how much you are able to spend on a property.
 
Unconditional Approval 
Once a homebuyer has found a property, they can go back to the lender that offered a pre-approval and seek a home loan.
 
When a lender is satisfied that you have met all of their criteria, including LVRs, valuations and your own personal financial situation, you will be fully approved and you will have unconditional approval.
 
It is possible that a lender won’t offer you a home loan after you have made an offer on a property, if that property is unique in some way, or if there are issues with it in the eyes of the lender.
 
The most important part of the loan application process is to work closely with a mortgage broker. They are in the best position to be able to help you navigate any issues that might arise, and they also communicate closely with the lender.
 
If you’re unsure about where your application is at any given time, your mortgage broker will be able to help guide you through the process.
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​When property markets are hot, vendors often choose to go to auction to try and attract the very best price they can. However, many vendors are open to accepting an offer prior to the start of the auction itself. That includes the days and weeks beforehand, not just on the day.
Do Your Homework
Most homes for sale by auction don’t have a specific price. If anything, the selling agents will likely offer a loose ‘price guide’, which, in many cases, is at the lower end of the spectrum. They do this to encourage as many people as possible to attend the auction and bid, in the hopes it will drive up the price. As a buyer, you need to know how much a property is worth, and that’s even more important when making a pre-auction offer. Use comparable sales from the surrounding area in the last 3-6 months. Ideally, you will find recent sales history for a similar property type, age, and also land component. When making a pre-auction offer, you can point to the sales data to help in your negotiation.
Avoid a Dutch Auction
If you’re hoping to swoop in early with a strong offer, you don’t want to get yourself into a situation where you are bidding against someone else. This is often termed a ‘Dutch auction’, and it is not all that different to buying a property at auction. All a sales agent really needs are two interested buyers, and that can be enough to push the price well above what it should be selling for, based on comparable sales alone.
Know Your Limit
If you’re going to be confident making a strong offer, it’s vital that you’re pre-approved for finance so you know exactly where you stand. If your borrowing capacity is limited, this can actually be a good thing in the negotiating process as you can simply state that fact to the sales agent and even prove it to them. It’s hard to make a strong offer, including appealing terms, if you don’t know for sure that a bank will lend you the money.
Walk Away
The worst thing you can do is get into a situation where you are continually upping your offer. In effect, you are just bidding against yourself. If it’s a matter of a few thousand dollars and the sales agent is clear that is what the vendor needs to make a transaction happen, then that might be the time to work with them. However, if you know your finance limit and also what you believe a property is worth based on comparable sales, then you should stick with that number.

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​Property investing has been a powerful way to build wealth that Australian’s have been using for generations.
 
The great thing about property is that there are a number of different approaches you can use that all increase your wealth over time.
 
The exact strategy that you use as an investor will be dependent on your own personal situation, but here are 4 powerful strategies you can use to add value to your property or build a portfolio.
 
Renovate 
The great thing about investing in property is that, as the owner, you have the ability to add value to your investment.
 
Compare that to the share market and there isn’t much you can do to increase a company’s share price.
 
By doing a renovation, you are able to add value to the property and at the same time, increase the rental yield and overall appeal to potential buyers.
 
The trick to a renovation is to do your research before you start. You want to look at other properties in the same suburb that have similar characteristics.
 
Ideally, you want to see a large difference in price between renovated and unrenovated homes in that suburb. That way, there’s room to make a profit after taking into consideration all the costs involved.
 
Cash Flow 
With interest rates at record low levels and mortgage rates incredibly affordable, the vast majority of properties in the current environment will be at least neutrally geared.
 
The idea of finding a positive cash flow property is that the income you receive from rent is more than the costs of owning the property. That includes mortgage and interest payments and all costs such as maintenance, repairs, and management fees.
 
A positively geared property puts money in your pocket each month and allows you to build a larger property portfolio than one that is negatively geared.
 
However, just because a property has a high yield and is potentially a positive cash flow property, doesn’t mean it’s a good investment. You still need to buy a property that has the potential for capital growth over time.
 
Getting a Good Deal 
When a vendor sells a property, they are doing it for their own reasons.
 
Depending on how motivated that vendor is to sell, will tell you how much they are willing to negotiate.
 
Generally speaking, a highly motivated seller, will be far more willing to accept a lower price in return for a quick settlement.
 
A motivated seller is often someone who needs to sell for personal or financial reasons and if you can identify these types of properties, you may be more likely to get yourself a great deal and also create instant equity in the process.
 
Capital Growth 
Arguably the key objective of most Australian property investors is to look for capital growth potential.
 
Australian property has a long history of appreciating in value and that is expected to continue over the long term.
 
However, the property market is not one big market, but rather thousands of smaller markets made up of tens of thousands of suburbs.
 
If you can identify areas where demand will outstrip supply, then you’ll likely see above-average capital growth as well.
 
These types of areas are often located in highly sought-after owner-occupier areas that have great amenity, access to rivers and beaches and good school zones. Alternatively, they can be areas that are being rezoned and going through gentrification.
 
There’s no one right strategy for property investors, and a more powerful way to create wealth is to try and combine as many of the elements mentioned as you can into your next property purchase.

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​There’s been a lot of talk recently, about the prospect of Australia and many other countries around the world falling into a recession.
 
These days, the word ‘recession’ isn’t as scary as it used to be as most people understand that this is a technical definition, that just means two consecutive periods of negative economic growth.
 
With the severe limitations placed on the economy, through lockdown measures, used to combat the spread of COVID-19, it’s no surprise that the economy might slow down. But as we’ve also seen, things are improving rapidly and business is getting back to normal relatively quickly.
 
That said, it is interesting to look at just how resilient Australian property has been in the past and why we should be optimistic about what that means for the coming months and years.
‘The Recession We Had to Have’ 
The last time Australia fell into a recession, it was the residential property market that really did buck the trend.
 
The ‘recession we had to have’ happened in the early 1990s after a period of strong growth in the ‘roaring ’80s’ and the ensuing property boom. At the time, growth fell by 1.7 per cent and the unemployment rate jumped to 10.1 per cent.
 
While the numbers looked bad on the surface, they didn’t impact property prices like many thought it might. In fact, it was quite the opposite.
 
In the 12 months after the recession began, property prices in Sydney fell by only 0.7 per cent, Melbourne by 2.4 per cent and Perth by 1 per cent. On the flip side, house prices grew in value in Brisbane by 6.8 per cent and Hobart by 4.2 per cent.
 
Not exactly what many might have expected.
 
In the three years after 1991, property prices showed cumulative growth of more than 20 per cent in 5 of Australia’s 8 major capital cities.

Source: Propertyology

​During that same period of time, unemployment was sitting around 10 per cent, with some areas even higher than that.
 
As we can see, property prices grew significantly in Perth and Darwin between 1991 and 1994, while our major two cities of Melbourne and Sydney both saw growth of between 5 and 18 per cent.
 
Again, a long way from the calls being made recently of 30 per cent falls.
 
Interestingly, there were also a number of regional areas that performed very strongly through that period as well.
 
House prices in Townsville grew by over 30 per cent, Griffith by around 25 per cent, Cairns by nearly 40 per cent and Busselton in Western Australia by around 50 per cent.
 
This data really highlights the fact that not only does Australian property have a history of performing strongly during tough times, but there really isn’t just one single house market in Australia.
 
The most recent data from CoreLogic has indicated that the combined capital cities fell in value by just 0.5 per cent in May, which they labelled a sign of just how ‘resilient’ the property market has been.
 
As lockdown measures across the country ease and the real estate industry gets back to business, the chances of a ‘V-Shaped’ recovery continue to increase. And once again it looks like property could play an important role in Australia’s economic recovery.
 
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