According to the June figures released from the Australian Prudential Regulation Authority (APRA), 1 in 9 Australian home loan holders have chosen to defer their mortgage repayments through COVID-19 induced repayment holidays.
As of June 30, the total sum of deferred housing loans came to the sum of $195 billion, or 11% of total home lending.
The figure made-up a total $274 billion worth of loans granted for housing and small business repayment deferrals.
Announced by the Australian Banking Association (ABA) in March, the repayment deferral or ‘mortgage holiday’ program was originally flagged to last 6-months.
Come July, the program was extended to last another 4-months (no later than January 2021), for any customers who are unable to meet their repayment obligations due to income loss linked to COVID-19.
“If you are granted an extended deferral period that is approved by your lender, your credit report will not be impacted” says the ABA.
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Since its announcement, authorised deposit-taking institutions (ADIs) have recorded a steady take-up of the program following its initial peak, though customers exiting the program has been comparably minimal.
In April, $170 billion worth of loans were approved for deferral. This was followed by another $45 billion worth of loans in May and an additional $40 billion worth of loans approved in June.
In contrast, between April and June 2020 $21 billion of loans were exited from deferral.
Although home loans made up most of the total, small business loans were found to have a higher incidence of repayment deferral. As of June 30, 17% of the total share of small business loans was deferred, equating to $55 billion.
When comparing the ‘risk profile’ of different groups, the report showed investors to hold a large share of deferred housing loans, clocking in at 34%.
In contrast, those with a loan-to-value ratio of above 90% held an 8% share of all deferred housing loans, a notable figure considering this group only makes up 5% of all loans.
“The housing risk profile shows that housing loans granted repayment deferrals are more likely to be extended to owner-occupier borrowers, subject to principal and interest repayments, and have higher loan to value ratios than all housing loans,” said the APRA report in its analysis.
When speaking on the extension of the mortgage holiday program in July, the ABA said that that the process “will not be automatic”.
Come September, those who are currently on mortgage holidays will be expected to resume repayments, unless they have negotiated an extension with their bank.
“Those who are able to repay their loans will resume doing so, which is in the best interests of those customers and allows support to be directed to those who need it. Encouragingly, many customers have already chosen to resume making repayments,” said ABA CEO, Anna Bligh.
The ABA also noted that many customers may need less than four months to either restructure their loan or get back into full repayments.
As lenders implement the next phase of banking support , the ABA expects customers and lenders to ethically work together to find the right option for each situation, with lenders possibly employing extra staff to help meet the consumer demand.
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Words by Kathryn Lee
Are you struggling to keep up with repayments? Contact one of our home loan consultants to find out what home loan options are potentially available to you during these uncertain times.
One of the most asked questions since the COVID-19 outbreak is exactly how coronavirus will affect house prices, and if now is the best time to buy a property. The pandemic has flipped the property market upside down and has effectively changed the game.
Changes to in-person auctions and inspections have made it hard for real estate agents, sellers and buyers. But on the other hand, we have also seen a fall in interest rates, easing credit conditions and pullback in strong buyers. Despite the numerous challenges it involves, the housing market is extremely lucrative to buyers who are interested in purchasing a property sooner rather than later.
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Because the share market looks into the future performance of the economy, it has dropped quickly and significantly due to the COVID-19 crisis, with hopes to recover quicker after the pandemic is over. The property market is also indirectly affected by this, though taking longer to recover as it moves at a different speed. The number of settled property sales in Australia has taken a hit, falling by about 40% in April.
Less competition in the property market may present an opportunity for those that are in a position to buy a house. If you’re still employed and have the capacity to borrow money from lenders, interest rates are very low (almost at zero). With a lot of buyers now sitting on the fence whether or not they should purchase, it could prove very advantageous for a serious buyer.
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There are currently country wide restrictions to how property inspections and auctions will work. These are slowly beginning to be eased in some states, but all states in Australia still have some sort of restriction in place.
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NSW: Online auctions and public inspections are now allowed. However, social distancing must be maintained at all times, and those that attend must sign a record of attendance to be kept in case anyone contracts the virus.
VIC: Victorians can now attend inspections and onsite auctions, but it can only be up to a maximum of 10 people in a single property, including the real estate agent.
QLD: There are currently no inspections or onsite auctions allowed. Restrictions have been eased for private inspections however, to six people at a time including the real estate agent.
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ACT: No onsite auctions or open inspections are allowed. Private inspections remain the same with one person (or family) and one real estate agent.
NT: Real estate open inspections and auctions can be attended
WA: Restrictions have been eased for public inspections only. Only a maximum of 10 people (including the real estate agent) can intend an inspection at a time. Auctions are to remain online for the time being.
SA: Auctions and inspection regulations have been eased with 10 people max in the property and the four square metre per person social distancing in place.
It’s hard to say with 100% certainty that this period is the best time of all to purchase a house. However, in this current climate, those who are in very secure jobs are in an improved position due to the weaker position of the real estate market. COVID-19 has taken out two segments of buyers – those who are sitting on the fence (they are adopting wait before action approach), and those who are simply unable to buy due to employment issues or reduced income. There is now less competition as these types of buyers will be taken out of the housing market.
Looking at the real estate market itself, there are currently very low-interest rates on offer. Low-interest rates mean lower loan repayments. Although home loan approval is quite tricky in uncertain times like these, if your job and income have been stable then you have a higher chance of getting it approved.
With competition drying up, interest rates dropping and house prices also predicted to take a dip, now is a great time to buy, Michael Yardney states. The CEO of Metropole Property comments on this trend, saying “One of the major lessons I have learned from previous downturns is the importance of taking a long-term perspective. I have found that it is exactly these conditions that present the best opportunity. That means now is the time to get prepared to take advantage of the opportunities that the market will offer.”
Do your research
Although there is increased bargaining power and more options available, don’t fall into buying something just because it’s cheap. Buyers might be tempted to buy because they deem it as a bargain, but something selling cheaply might be so because of other factors such as poor location or future roadwork developments. Make sure you’re buying for the right reasons and looking at the long term brief. Before putting in an offer for a property, remember to do the fundamental research such as demographics, supply and demand, affordability, current and future trends and what will be driving the property market long term.
Get in contact with a buyers agent
With so many changes to public auctions and inspections, many sellers and real estate agents are turning to off-market opportunities, settling with private treaties instead. Fewer parties will be available on the open market, meaning you could potentially miss out on dozens of other houses. Using the services of a buyer’s agents will help you get access to more properties and level the playing field. Buyer’s agents are legally licensed to represent the buyer and usually have more knowledge on the area and market
Move quickly and negotiate
Negotiations and deals are now becoming less predictable and occurring in shorter time frames. Sellers are looking for certainty so buyers could be missing out on rapid deals if they’re not moving quick enough. If you’re interested in buying a property, organise private inspections straight away and make an offer before anyone else does. If you make an offer with as few conditions as possible and cut the settlement period, you could also potentially get a bargain.
What the future looks like for buying
No one can completely predict the future, so it’s hard to say what the economy will shift to in the future. 2020 has certainly been a tough year for the economy. Although Australia is currently in a recession, it is predicted to bounce back after the pandemic, and the Government has taken drastic measures to ensure it doesn’t fall too low.
The Reserve Bank of Australia has mentioned a rebound in the second half of the year that will boost the economy by next year, fluctuating the property market back up to ‘normal’. As more people go back to work, and more businesses start opening, the property market will also return to normal (with a potential increase if the market booms following COVID-19).
Words by Joanne Ly
If you’re thinking of investing in another property, the brokers at eChoice are here to help! Contact us today and we’ll find you a competitive mortgage rate.
At its August board meeting, the Reserve Bank of Australia (RBA) elected to once again hold monetary policy, leaving the cash rate at 0.25%, where it has sat since March.
The decision was largely expected, and the board has stated on numerous occasions it would not be increasing the cash rate until progress is made towards employment and inflation targets.
It has however, not completely ruled out making future changes to its monetary support package and is willing to do so if circumstances permit.
As it stands, the current RBA support package is as follows:
Although satisfied with its current package, during its July meeting the board hypothesised alternative monetary policy changes that could have been taken in March.
“… It would have been possible, for example, to set lower, but still positive, interest rate targets and to have purchased a quantity of government bonds above that necessary to achieve the bond yield target” the July RBA minutes stated.
In the end the board concluded current measures satisfactory but did not rule out future changes.
“After reviewing experience both overseas and in Australia, members agreed that there was no need to adjust the package of measures in Australia in the current environment. Members agreed, however, to continue to assess the evolving situation in Australia and did not rule out adjusting the current package if circumstances warranted.”
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During his annual speech to the Anika Foundation on 21 July, RBA Governor Phillip Lowe stated that although we had “turned the corner” in relation to employment, “the path ahead is expected to be bumpy”.
According to ABS Labour Force data, in June employment rose by 210,800 people and the number of hours worked increased by 4%, providing positive signs. However, unemployment saw a rise, increasing from 7.1% to 7.4% – a 21-year high.
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Analysing the data, Dr Lowe believes this pattern is to be expected.
“… many of the people who lost their jobs over recent times have been classified as not in the labour force and so are not counted as unemployed. As the labour market continues to improve, we expect many of these people will start looking for jobs, and thus be classified as re-joining the labour force,” he said.
“This will push up the measured unemployment rate at the same time that the share of the working-age population with a job is also rising.”
Dr Lowe also noted the differences between industries, including which are doing well and which are struggling.
Although some areas have thrived over the past months – such as supermarkets – he said a pick-up was beginning to be seen in other industries such as retail, hospitality and the arts/recreation sectors as restrictions are eased in much of the country.
But not all industries are doing so well. During his speech, Dr Lowe highlighted potential problems for the construction sector and professional services in the coming months, who have not been as affected but could now begin to feel the impacts of the pandemic.
“Through our business liaison we are hearing that many firms, including in the construction sector and in professional services, were able to keep many of their employees over recent months because they had a pipeline of work to complete,” he said.
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Although government debt is certainly higher than we are used to, Dr Lowe believes it will mean Australia is better off in the long run and will ultimately experience less economic damage.
To date, the Commonwealth has committed almost $150 billion to helping the Australian economy, with the bill coming up to $185 billion when combined with the states’ outlays.
There have also been $26 billion worth of tax cuts and the Treasury is predicting a $184 billion deficit next financial year, after a $86 billion deficit for the financial year just been – a far cry from the $5 billion surplus that had been predicted.
But according to Dr Lowe, history shows the “more protracted” an economic downturn is, the worse it is for economic recovery – suggesting future debt is far better than the alternative of prolonged generational impacts, which would ultimately affect future economic growth.
The below are the impacts which Dr Lowe says the government is trying to reduce:
At the moment, government spending on JobSeeker and JobKeeper is directly transferring money to Australian households and businesses.
Likewise, government spending on infrastructure and public health is helping the government to create more activities and jobs.
Both these forms of spending are assisting with boosting confidence and encouraging normal patterns of spending and consumption.
When it comes to addressing the debt in the future, Dr Lowe says the best way to address it will be through strong economic growth – which the current measures are attempting to encourage.
“I have spoken on previous occasions about some of the options here and the need for Australia to be a great place for businesses to expand, invest, innovate and hire people. It is important that as a country we focus on this, not only to deal with our current challenges but also our future ones” he said.
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Dr Lowe also noted the low level of debt Australia had before the pandemic and the low rates which the government has access to for borrowing, both these things playing in our favour.
“… the Australian government can borrow at the lowest rates since Federation. So the public balance sheet is well placed to smooth out the shock to private incomes and support the economy through the pandemic,” he said.
Words by Kathryn Lee
Are you on the lookout to save more on your home loan? Contact eChoice to help you work out your home loan options. With access to 100s of mortgage products from over 25 lenders, eChoice has the resources to get YOU the right home loan deal.
According to figures released by the Australian Bureau of Statistics (ABS) the total value of home loans refinancing has exceeded a record high since May 2020.
With the COVID-19 pandemic escalating more Australians have refinanced their home loans than ever before.
As Australian home lending and property market values drop, there’s no shortage of owners’ negotiating their existing loans down, which is also increasing pressure on lenders to cut a more competitive deal.
ABS data reveals 33,712 borrowers refinanced in May, up 30% from April 2020 and the total value of these refinanced homes exceeded $15.1 billion in May which is up 26% from the previous high of $12 billion in April.
The ABS Chief Economist Bruce Hockman said, “while reduced transactions in the housing market stifled new loan activity in May, the value of existing owner-occupier loans refinanced with a different bank was by far the highest on record as borrowers responded to reduced interest rates and refinancing offers”.
Graham Cooke the Insights Manager at Finder said that as budgets are being stretched, a record number of people are deciding to get a more competitive deal on their largest investment.
“Historically low interest rates and a lack of investor spending are a double whammy to banks, but a boon for mortgage holders,” Cooke said.
On the average loan of $494,462, Finder analysis shows the average standard variable rate from the Big Four banks is 4.04%.
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If that rate were to drop 50 basis points to 3.54% over the length of the loan an estimation of $36,287 would be saved.
In such a tight economic environment, lenders could be forced to cut their lending margins even lower as they work to secure low risk borrowers.
The number of refinanced loans escalated from 25,988 to nearly 33,712 from the period of April to May.
This number consists of record highs for both external refinance loans, which involve customers switching lenders, and internal refinance loans, which involves customers getting a more competitive rate from their current lender.
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According to the ABS figures, external loans reached 21,473 and internal loans reached 12,239.
Despite new records for both internal and external refinancing sectors, the largest disparity is 64% of all refinance loans are Australians switching lenders.
At its July meeting, the Reserve Bank of Australia concluded that the official cash rate will stay at a low 0.25% some of the lower home loans are starting at 2%.
Some lenders are now offering new schemes and are offering to waive fees for new borrowers, and some are offering extras like offset accounts at no additional cost.
New home loan commitments fell by 11.6% in May – the steepest decline on record.
The value of new home loan commitments for owner-occupiers fell 10.2% and new loans for investors fell 15.6% – the lowest level since 2002.
ABS Chief Economist, Bruce Hockman, said in a media release, “this was the largest fall in the history of the series, driven by strong falls in the value of loan commitments for housing in New South Wales and Victoria.
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The latest ABS data for April shows demand from first home buyers was around 20% higher than the most recent low point in December 2018, as property price falls in many markets over late 2018 and early 2019 encouraged them into the property market.
Even though the Morrison government have been trying to appeal to first home buyers to keep the economy afloat, there has also been a drop in new home loan mortgages.
The HomeBuilder scheme has been implemented to attract first home buyers as they represent a significant opportunity to accelerate their home ownership goals.
However, the number of owner-occupier home loan commitments decreased by 9.3% in seasonally adjusted terms.
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Words by Ece Demir
Take advantage of lenders cutting their home loan rates! Speak to one of our home loan experts to compare hundreds of products across 25 lenders, and find the option that’s right for you!
A coalition of banking and real estate associations are calling for the removal of “red tape” in the property sector to streamline lending processes by digitising a range of banking, mortgage and finance services.
Banking and real estate institutions are urging the government to make temporary electronic transacting of mortgages permanent to allow for more efficient and streamlined processes in the industry. The sector was quick to implement changes in line with coronavirus social distancing that included digitising many traditionally paper-based processes, but without changes to legislation these aren’t set to stay.
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According to the Australian Banking Association allowing lending institutions to offer more digital and paperless mortgages as a normal business practice will make them more economically efficient, as well as more efficient for the businesses and people involved. With the real estate sector hit hard by coronavirus restrictions, the streamlining of traditionally time-consuming processes could help promote growth and activity for the industry.
A range of temporary digitised processes that included electronic mortgage applications, video call document witnessing and electronically signed documents were introduced through emergency government regulations and implemented by lenders in response to the coronavirus lockdown. These measures served to streamline access to banking, mortgage and finance services, and lending institutions are keen for these more efficient processes to become the new norm.
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An established coalition that includes the Australian Banking Association, the Business Council of Australia, the Australian Institute of Company Directors, Council of Small Business Organisations, the Financial Services Council, the Real Estate Institute of NSW and the Australian Property Institute have suggested that the temporary measures introduced during the coronavirus pandemic should be made more permanent.
Australian Banking Association CEO Anna Bligh says that while both state and federal governments were to be commended on their response to the coronavirus pandemic, and for facilitating temporary electronic transactions, the changes needed to be permanent to lower costs and reduce hassle associated with the transacting and mortgage processes.
“Today we’re calling on both Federal and State Governments to make these changes permanent in order to keep the ease, keep the lower cost and reduce the hassle of transactions which rely on wet signatures and paper documents,” Ms Bligh said.
The proposal from the coalition has suggested a range of permanent changes to increase efficiency and digitisation.
Some of these suggested changes are related to electronic transactions, avoiding the need for paper signatures and for documents to be witnessed in person. The key changes suggested in relation to electronic transactions are:
Other changes relate to the processing of mortgage applications electronically, again by removing the need for paper signatures and for documents to be witnessed in person. The key changes suggested in relation to digital, paperless mortgages are:
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In some state’s changes are already being implemented to move towards more digitisation of transactions and mortgages, largely in response to the coronavirus pandemic.
In New South Wales emergency regulations have been passed allowing the witnessing of documents to occur remotely and they have passed legislation enabling broader reforms including the introduction of electronic deeds.
Both Victoria and Queensland have also passed emergency regulations that allow for the electronic signing of documents and remote witnessing of all documents, including deeds and mortgages.
South Australia and Tasmania have similarly passed emergency legislation relating to electronic transactions but are yet to implement any changes to regulations.
Despite this, all states are yet to make any permanent changes and all temporary measures are set to expire between October and November 2020. Many states do have versions of an Electronic Transactions Act, which generally states that transactions are not invalid simply because they are conducted electronically, but common state law often also stipulates that deeds and mortgages must be made in writing, on paper.
Land registrars have also been temporarily been allowed electronic signing and lodgement of mortgage documents in New South Wales, Queensland, South Australia and Western Australia.
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Words by Danielle Austin
You don’t need to leave your house to get an eChoice home loan consultation. As always we will provide you with the digital option of discussing your options over the phone – we’re here to make your home loan journey easier.
Perth is known for being smaller and more isolated than Australia’s other capital cities. But what it lacks in size and accessibility, it more than makes up for in liveability, friendly people and unbeatable value. This West Coast gem is popular with those who want to live the beach lifestyle, but don’t want to pay a premium for it.
But, where are the best areas to live and buy in Perth, to really make the most of all it has to offer? Well, that depends on what qualities are important to you – whether that’s price, location, lifestyle or amenities. Here, we’ve put together a guide to Perth’s most popular suburbs based on a few different metrics, to help you determine where is best for you.
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It’s often been said that if you find yourself in a relationship with someone from Perth, you’re going to end up moving to Perth. This is because locals know how unbeatable the lifestyle is.
It’s not just about the surf and sand in Perth, though. It’s also known for its diverse neighbourhoods – from the historical port area of Fremantle or ‘Freo’ to the trendy Subiaco and riverside beauty of King’s Park. Other major selling points for Perth include low pollution, plentiful green spaces, a thriving job market and near-negligible crime levels.
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In Perth, there’s truly something for everybody and each of its suburbs has a very different feel. While there’s no hard and fast answer to the question “where is the best place to live in Perth?”, there are certain pockets of the city that are considered more liveable than others.
In a report published by realestate.com.au, East Perth was named the most lifestyle-friendly suburb not only in Perth, but all of Western Australia. This is thanks to its close proximity to the city (an 8 minute drive or 12 minutes by public transport), waterfront dining scene and impressive position on the Swan River. Here, the median house price is $913,000, compared to $570,000 for units.
Highgate is considered another highly liveable suburb in Perth. Located under 2 km North-East of the CBD, this inner-city area is actually the smallest neighbourhood in Perth. This gives it a welcoming, small town feel, despite how close it is to the city. Here, the median house price sits at $700,000, compared to $357,500 for units.
A little further from the CBD, Ashfield is also regarded as a great place to live in Perth. Just over 8 km from the city centre, this riverside suburb was once known for its railway houses converted into state-funded housing. Now, it’s renowned for its affordable prices – the median house price here is just $455,000.
If your budget extends a little further, Crawley and Rossmoyne are also popular suburbs in Perth. Sitting on the serene Matilda Bay, Crawley will set you back around $815,000 for a unit, while Rossmoyne is an affluent suburb in the Canning River with a median house price of $1,160,000.
Perth is widely regarded as one of the safest capital cities to live in. But, like anywhere, this varies greatly from suburb to suburb. In fact, realestate.com.au’s Life in Australia Index report shows that 72% of Perth residents consider safety their number one factor in deciding where to live – ranking it above even affordable housing and high quality health services. The research showed that Perth locals value safety more than residents in any other major city.
Canstar data shows that the beachside suburb of Iluka is the safest suburb in Perth, with a crime rate of just 1.33 reported incidents per 100 residents. Other extremely safe suburbs in Perth based on crime data are Mahogany Creek, Hovea, Stoneville, Parkerville, Tapping, Burns Beach, Connolly, Roleystone and Darch.
Flanked on three sides by the Swan River, the picturesque suburb of Dalkeith is the most expensive suburb in Perth. For those who have seen the luxurious mansions in the leafy area, it would come as no surprise that the median house price sits at $2.29 million.
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The second richest suburb in Perth is Cottesloe, which is highly desirable for its beach lifestyle and proximity to Fremantle and the CBD. Here, the median house price sits just behind Dalkeith at $2.187 million.
Travel a little further along the coastline and you’ll find City Beach, Perth’s third most expensive suburb. Here, the name pretty much sums it up – it offers the best of both worlds. Not only is it in relatively close proximity to Perth’s city centre, it has some of the city’s most pristine beaches. Here, the median house price is $1.72 million
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With its community feel, affordable prices and great natural scenery, Perth is an ideal place to raise a family. Family-friendly suburbs are spread out throughout the city and include:
There’s a lot to love about this suburb, located 8 km North-West of the CBD. It boasts a lake, close proximity to the beach, natural reserves and even wildlife sanctuary. Couple that with the low crime rates and it’s an excellent place for families to live.
Growing families need more space, and Dalkeith offers that in abundance. Not only does this riverside suburb have some of the biggest homes in the city, but there’s plenty of parks and wide open spaces. While the mansions in the area push the median price up, there are still some options for family homes to accomodate other budgets.
If quiet, clean and safe streets are a priority, you can’t go past Salter Point. Surrounded by the Canning River, it offers plenty of places to go for a dip as a family, including the Salter lagoon. Overall, the area offers a relaxing and idyllic lifestyle.
This information is a guide only and is an estimate only based on the past 12 months of aggregated online mortgage enquiries from eChoice and partner programs.
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Located 10 km from the city centre, this suburb is developing a reputation as a hidden gem. The large lots offer plenty of privacy and despite being quite self-contained with shops and amenities, there’s easy access to the CBD.
Other suburbs that are a haven for families include Attadale, Floreat, Rossmyone, Swanbourne, Menora and Mount Claremont.
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Perth is a popular place to rent as compared to many other major cities, your dollar can go a lot further. The most popular suburbs in Perth to rent include the Perth City centre and East Perth, which are known as the business hubs of the city. Other desirable inner city suburbs for renters include Mount Lawley, West Perth and South Perth. Further out of the city centre, the developing suburbs of Baldivis, suburban area of Como and beachside area of Scarborough are also popular choices for tenants.
If affordability is top priority, Osborne Park is currently the cheapest suburb in Perth to rent. This industrial area has a median weekly rent of just $265. Wembley and Glendalough are other accessible options, as both have a median rent of $270.
If you’re looking to invest in some earth for the first time, there are few better places to do so than Perth. It’s ideal for first time buyers, due to its accessible entry point. While housing prices are currently low, it’s tipped by experts to experience a boom over the next few years – although it is currently unclear how the economic situation around COVID-19 will affect this.
Perth’s property market is split into the inner ring (suburbs less than 15 km from the city) and outer ring (more than 15 km from the city) The general consensus amongst real estate experts is that the inner ring is the best place to buy. As Perth is a growing city, locals are likely to want to be as close as possible to entertainment, dining options and shopping centres.
Some of the best suburbs in Perth to buy a home include:
With a median house price of $278,000, this Northern suburb is a popular option with first time buyers.
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Located in the City of Swan area, Beechboro has a median house price of $345,000. There has been a 12.2% growth in sales over the last years, indicating that this is a strong suburb to watch.
Located just 6 km of the city and with a median house price of just $345,000, this riverside suburb is considered something of a steak.
With a median house price of $530,000, this inner city suburb is one of the more expensive options on this list. However, located just 6 km from the CBD and with a major train station in development, it’s an area with strong long-term potential.
Other promising suburbs to buy in Perth include East Victoria Park, the Southern suburbs of Cannington and Willagee and the middle suburbs of Stirling and East Fremantle.
Whether you’re looking to take advantage of Perth’s accessible prices as an investment or settle into your forever home, there’s plenty of great options to buy in Perth. This may not necessarily mean buying in one of Perth’s most popular suburbs, but taking a look at what has a strong reputation can help point you in the right direction.
Words by Emma Norris
If buying a property in Perth is on the cards, be sure to work with an experienced broker to ensure the settlement process is as stress-free and streamlined as possible. You don’t need to leave your house to get an eChoice home loan consultation – As always we will discuss your options over the phone – we’re here to make your home loan journey easier.
For customers with the major banks, sharing data is about to get a whole lot easier – and better banking deals could be up for grabs – following the official launch of open banking in Australia.
Launched on July 1 after a previous five-month delay, open banking means major bank customers can now share financial data with ACCC accredited third parties, making it easier for customers to seek out better deals on banking products.
As of last week, major bank customers are able to share information about their credit and debit cards or savings and transaction accounts, giving customers the opportunity to ‘shop around’ for more competitive products.
Today Australia’s four major banks open up their data so that customers can share it in order to get the best deal possible on credit cards, savings accounts and other deposit products. https://t.co/XymnzywvoO
— Australian Banking (@ausbanking) July 1, 2020
From November 2020, open banking will also include the ability to share data from mortgage and loan accounts, as well as from joint accounts.
Although the first stage of open banking’s rollout is only for customers with the major banks, other authorised deposit-taking institutions are expected to get on board by February 2021.
The move is part of the Consumer Data Right (CDR), an Australian Government initiated system to improve competition in services industries by giving customers more control over their data. Through CDR, customers can share data between accredited providers to aid them in comparing products or services, or to help them access new and improved services.
Now that CDR has begun to be rolled out in the banking industry, in the future it’s thought to be introduced to the energy sector to give customers better access to product comparisons and accurate quotes.
Open banking is an ‘opt-in’ process and uses the CDR to let customers choose what services have access to their financial data.
To use open banking, the customer must first check whether the service they’re looking into has been accredited by the Australian Competition and Consumer Commission (ACCC). This can be checked via the online CDR Register.
Consumers can now choose to share their banking data to access more personalised financial products and services following the launch of the Consumer Data Right today. Learn more about the Consumer Data Right here: https://t.co/0mwZpKcdVw pic.twitter.com/5tJH4PCyWz
— ACCC (@acccgovau) July 1, 2020
If accredited, there will be an option on the service’s website for you to give your consent for data to be shared from your current bank. This will include options such as what data you’re willing to share, what you’re willing to let your data to be used for and how long you’re willing to share it.
Once permission is received, you will be directed to your current bank’s CDR page, where you can log-in with your existing customer ID and a unique password (provided by your current bank). Here, you will be able to see and manage the data you’ve agreed to share, as well as withdraw consent at any time.
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In theory, yes, under open banking the process of applying for a loan or changing banks or lenders will be made less onerous and involve less paperwork.
However, given the early nature of the system many service providers are yet to register with the ACCC.
At the time of writing, all four major banks are registered as participating data holders but only two financial institutions, Frollo Australia PTY Limited and Regional Australia Bank Ltd., are listed as approved data recipients.
NAB welcomes the first phase of Open Banking. We will continue to invest in the future phases of Open Banking for a greater customer experience and the growth of the economy.https://t.co/pbP12IWGl6
— NAB (@NAB) July 1, 2020
Over time, more financial service providers will be added and by September the ACCC anticipates 39 more providers to have jumped on board as data recipients.
In a LinkedIn post, Regional Australia Bank confirmed open banking had already been used to fast-track a loan application, allowing a customer to begin and have a personal loan application approved in a matter of hours.
“Following a day of checking and fine-tuning, at 5:40 pm an online personal loan application was commenced by a new customer who elected to share their transaction history using CDR,” the bank revealed.
“Unaided, they provided consent and authorised the secure electronic transfer of 3,505 transactions from their bank to us. The data was collected in 21 seconds, completing at 5:46 pm. That data was then automatically analysed into spending categories, surfaced within the application form and original transaction data deleted, all in under 2 minutes. The customer continued with their application which was submitted and then approved by our credit team at 8:57 pm.”
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In a media statement the ACCC confirmed maintaining the security of consumer data would be a top priority for the CDR.
“Maintaining security and privacy are top priorities for the ACCC, in addition to the Office of the Australian Information Commissioner (OAIC) and the Data Standards Body (DSB),” the statement said.
To used shared data, companies require ACCC accreditation which involves meeting strict security and IT requirements. According to ABC News following the launch, more than 50 service providers had applied for accreditation but only two were approved.
Canstar finance expert Steve Mickenbecker said that while there had been much discussion surrounding security and privacy concerns, it should not be forgotten that the ACCC is a regulatory body who has put safeguards in place.
“Data recipients have to jump through many hurdles to be approved, and need to satisfy all sorts of requirements with their systems and security,” he said.
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Words by Kathryn Lee
Is your current interest rate still competitive? Contact one of our mortgage brokers to compare your options and find a deal that suits you.
Working a casual gig but keen to get a home loan? Here’s what you need to know.
Getting a home loan without a full-time job may seem tougher, it is certainly doable and worth doing all the usual due diligence and comparisons to ensure you get the best deal available to you. The first step to being approved for a home loan as a casual employee is understanding how your home loan will be assessed.
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A potential lender is also likely to take a closer look at your outgoings – with responsible lending now mandated at a Government level, lenders are obligated to take a closer look at how we spend and save, right down to if our bills are paid on time to ensure they are not selling a product that is not suited to the consumer.
That said, the key player in determining both how much you can borrow and at what interest rate is your income. As with permanent full time and part time employees, this requires copies of pay slips, though obviously these will be assessed slightly differently for casual employees.
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If you haven’t been employed casually for two years, you may be out of luck with some lenders, but certainly not all. Some will instead use the Year To Date (YTD) gross income shown on your payslip and use it to calculate your likely annual income.
Given the fluctuating nature of casual work – by definition hours are not set or guaranteed they’ll use this information to make the most accurate assessment of your likely income while you’re servicing your loan.
Most lenders require a casual employee to be in their job for at least 12 months, however, it’s not a deal breaker. Lenders will want to see at a minimum:
Casual employment comes in all shapes and sizes, and your employment status does form part of the assessment of your loan. FairWork explains you’ll be considered a casual employee if your job carries no firm commitment in advance from your employer about how long you will be employed for, or the days (or hours) you will work. Likewise, a casual employee is not committed to all work an employer might offer. Casual employees:
As a casual employee, you are entitled to casual loading – a higher pay rate than equivalent full-time or part-time employees, to cover benefits full or part time employees can access.
Some casual employees work for one employer for a long period and become ‘long term casuals’. While you can claim some extra benefits including parental leave after at least 12 months of being engaged regularly by an employer on a casual basis, you will still not be entitled to paid leave or notice of termination, even if you work regularly for a long time.
Lenders who offer home loans to casual employees understand there are great variations between applicant circumstances, so putting together a strong application with as much supporting documentation as possible is key.
Related: The Home Loan Application Process
It’s important to understand that every time you apply for any type of loan, this goes in your credit report and forms part of the lenders risk assessment (your credit score is also made up of factors including the amount of money you’ve borrowed and whether you make repayments on time.) In short, don’t apply to several lenders as a way of ‘shopping around’ for the best deal.
That said, shopping around is still important before you apply for a loan. Rather than applying to lenders, you could use an online comparison engine to compare various loan products.
Aside from simplifying the home buying process, a mortgage broker can help from the very beginning of the process. They can:
You can broaden the playing field (the more lenders interested in loaning you money, the more selective you can be) and improve the terms of your loan as a casual employee in a number of ways.
Generally speaking, you can borrow up to 90% of the property value, or more if you have a guarantor or sizable deposit. While COVID-19 has bought more stringent lending into play – you may need to set your sights on a property you need to borrow a lower percentage or lower loan amount on for now, this is likely to recover.
Overall, the amount you can borrow depends on a range of factors such as your salary, living expenses, whether you are applying for a joint loan, interest rates, and many other factors. One way of estimating how much you could borrow is to use the eChoice Borrowing Power Calculator.
While being a casual employee may make securing a home loan seem tricky, with the right paperwork and some solid research, it is not mission impossible.
Words by Melanie Hearse
If you need help with your home loan, give eChoice a call! Our experienced brokers can help with finding the right loan for you and your situation.
There’s no time like now to start cooking up tasty dishes with your kids. Spending extra time in the kitchen with your kids can help them develop a positive experience with all different types of foods, fruits and vegetables. Children can also start to learn basic cooking skills and form knowledge about good nutrition and healthy eating.
Activities in the kitchen will ensure children can use all their senses – touching, tasting, smelling, listening and seeing. There are also lots of different ways to have kids involved throughout the cooking progress. For older kids, they can help prepare food using knives and cook on the stove. For younger children, they can wash fruits and vegetables, help with utensils and mix ingredients together. Cooking together with kids provides practical skills such as following directions and coordination. Hands-on cooking activities can also help children develop confidence by successfully completing a task or learning a dish. Following recipes also encourages children to be self directed and work on their problem solving skills.
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Cooking a meal involves mathematics and measurements, which can be used as practice for children. For example, kids can learn more about fractions using half cups and quarter cups during cooking, as well as doubling the recipe when required.
Learning about nutrition
Kids can be more likely to eat their meals if they’ve helped to peel and slice them. Getting them to help out in the kitchen can generate a meaningful conversation about proper nutrition and a healthy diet that isn’t just cookies and chips. A tip is to allow children to pick what to eat for dinner once a week, on the condition that it has to be a balanced meal. Start simple and work up depending on the child’s age and skill level.
Making it a part of family time
Cooking is fun for the kids, but it can also be an opportunity to bond as a family. Cooking together builds traditions and can help strengthen the relationship between siblings, parents and everyone altogether. Family meal preparation is also a chance to celebrate cultural heritage by passing down recipes from generations. If not, kids and parents can sit down and find new recipes to start a family cookbook together.
We’ve sourced some tasty recipes below from KidSpot that you can try with your children. These recipes are quick to make, with various beginner cooking skills embedded throughout so kids can learn at an easy pace.
Step 1: Place eggs in a saucepan and with enough water to fully submerge them. Bring the water to a boil on a high heat, cover with the lid and remove from the heat.
Step 2: Leave the eggs to cook in the saucepan for 12 minutes. Cool, then peel.
Step 3: Slice a bit off the bottom of the egg so that it can stand upright on its own. Cut off the top third of the egg, reserving the “lid” you’ve just removed. Gently remove the yolks and place in a medium-sized bowl.
Step 4: Add the mayonnaise, Parmesan and mustard to the egg yolk and mix together until smooth. Transfer the yolk mixture to a zip-lock bag.
Step 5: Snip a small hole in the corner of the bag and pipe the mixture back into the hollowed out eggs. Fill the egg, as well as an extra inch above the rim.
Step 6: Cut carrot (or you could use capsicum) into very small triangles. Place capers in the place of eyes and carrot as a beak. Top the yolk face with the egg white “lid” we removed earlier.
Step 7: Refrigerate for at least an hour or up to one day. To serve, line platter with dill. Arrange chicks carefully on top.
Ingredients for Dipping Sauce
Step 1: Preheat the oven to 400° and grease two large baking sheets with oil. Season chicken with salt and pepper.
Step 2: Add eggs to a medium shallow bowl. In a separate shallow bowl, whisk together bread crumbs, cornmeal, Parmesan, and cayenne. Season with salt.
Step 3: Working in batches, add chicken to eggs then dredge in bread crumb mixture until fully coated. Spread chicken in even layers on prepared baking sheets.
Step 4: Bake chicken until golden and cooked through, flipping halfway through, about 25 minutes.
Step 5: Meanwhile, make dipping sauce: In a small bowl, mix together mayonnaise, mustard, honey, and cayenne until fully combined.
Step 6: Serve chicken with dipping sauce.
Step 1: Preheat your oven on high (around 210°C).
Step 2: Chop all the vegetables into small and fine pieces.
Step 3: In a large bowl, mix together all ingredients, except for the puff pastry and the extra egg (which will be used to brush the pastry).
Step 4: After the puff pastry is defrosted, cut a sheet in half and lay it down as a long rectangle.
Step 5: Using a tablespoon, lay out the sausage roll mix in a long thin line at the bottom of the sheet (keep in mind you will need to roll the puff pastry over the sausage roll mix so there are two layers of pastry overlapping). Before rolling up the mix in the pastry, brush some egg over the pastry as ‘glue’. Keep the roll whole, brush with more egg on top and place on a tray with baking paper.
Step 6: Repeat this process until all of the mix is used up.
Step 7: With a sharp, thin bladed knife, cut the logs of the sausage rolls into smaller pieces. Lay each piece 2cm apart on a tray lined with baking paper.
Step 8: Bake on high for 15min until the pastry starts to golden, then turn the oven down to 180°C. Depending on the strength of your oven, you may need to move trays around from top to bottom and keep an eye on the bottom of the sausage rolls that they don’t become too dark.
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Step 1: Place a drop of food colouring on a slice of ham. Spread it around with your finger or a basting brush and pat any excess dye off with a paper towel. Fry the ham until the edges turn crispy .
Step 2: Combine water and food dye in a small bowl. Crack an egg and let just the yolk bathe in the mixture.
Step 3: Heat a frying pan on low and add a teaspoon of oil. Pour the egg whites into the pan one at a time and let sit for a moment.
Step 4: Add the green yolk to the middle of the sizzling egg white and cook to your liking.
Step 5: Remove eggs carefully and place on a plate. Place ham on plate and season accordingly.
Step 1: Combine all ingredients except the berries into a protein shaker and shake to mix together.
Step 2: Pour the batter straight into a waffle maker and cook until ready. If you don’t have a waffle maker, use a grill pan on medium heat and cook for 3-4 minutes until waffles feel crispy- they might look like strange waffles, but still delicious!
Step 3: Once cooked, serve these delicious Rice Bubbles waffles with fresh strawberries and blueberries, sprinkle Rice Bubbles on top and drizzle with natural honey. This makes an extra sweet fruit bowl to add to the table for breakfast!
Words by Joanne Ly
You don’t need to leave your house to get an eChoice home loan consultation – As always we will discuss your options over the phone – we’re here to make your home loan journey easier.