August lending update: What’s next for home owners, news, tips and tricks.
Cotality's latest Home Value Index landed this morning, and it's the number every buyer, seller and broker in the country will be talking about this week: national home values just had their steepest monthly fall since December 2022. Here's what it means if you're buying, refinancing, or an established parent who’s looking to help their kids or what their next property move will be.
THE LADDER LOWDOWN:
𝗡𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗵𝗼𝗺𝗲 𝘃𝗮𝗹𝘂𝗲𝘀 𝗳𝗲𝗹𝗹 𝟬.𝟳% 𝗶𝗻 𝗝𝘂𝗹𝘆 — the sharpest monthly drop since December 2022 — and the downturn has now spread beyond Sydney and Melbourne into Brisbane and Adelaide.
𝗟𝗲𝗻𝗱𝗲𝗿𝘀 𝗮𝗿𝗲 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝗻𝗴 𝗵𝗮𝗿𝗱𝗲𝗿 𝗳𝗼𝗿 𝗿𝗲𝗳𝗶𝗻𝗮𝗻𝗰𝗲 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿𝘀 as new lending slows, and the May Budget's negative gearing changes are reshaping the numbers for investors.
𝗪𝗵𝗲𝗻 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗮𝗿𝗲 𝗶𝗻 𝗳𝗹𝘂𝘅, 𝗶𝘁'𝘀 𝗴𝗼𝗼𝗱 𝘁𝗼 𝗸𝗻𝗼𝘄 𝘄𝗵𝗲𝗿𝗲 𝘆𝗼𝘂 𝘀𝘁𝗮𝗻𝗱. Whether you're upgrading, refinancing, buying your first home, or looking at equity release for your parents, there's a specific next step for you below.
PROPERTY MARKET UPDATE
The correction has widened. 𝗡𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝘃𝗮𝗹𝘂𝗲𝘀 𝗱𝗿𝗼𝗽𝗽𝗲𝗱 𝟬.𝟳% 𝗶𝗻 𝗝𝘂𝗹𝘆, 𝘁𝗵𝗲 𝗯𝗶𝗴𝗴𝗲𝘀𝘁 𝘀𝗶𝗻𝗴𝗹𝗲 𝗺𝗼𝗻𝘁𝗵 𝗳𝗮𝗹𝗹 𝘀𝗶𝗻𝗰𝗲 𝗗𝗲𝗰𝗲𝗺𝗯𝗲𝗿 𝟮𝟬𝟮𝟮, and it's no longer just a Sydney and Melbourne story. Sydney (-1.4% for the month, -4.0% over the quarter) and Melbourne (-1.2%, -3.4%) are still leading the falls, but Brisbane (-0.6%) and Adelaide (-0.2%) have now posted back-to-back monthly declines, ending a run of resilience that lasted through most of last year. Perth (+0.1%) and Darwin (+0.8%) are still climbing, though Perth's pace has slowed sharply.
𝗡𝗮𝘁𝗶𝗼𝗻𝗮𝗹𝗹𝘆, 𝗮𝗻𝗻𝘂𝗮𝗹 𝗴𝗿𝗼𝘄𝘁𝗵 𝗶𝘀 𝘀𝘁𝗶𝗹𝗹 𝗽𝗼𝘀𝗶𝘁𝗶𝘃𝗲 𝗮𝘁 𝟱.𝟯%, 𝗯𝘂𝘁 𝘁𝗵𝗮𝘁 𝗻𝘂𝗺𝗯𝗲𝗿 𝗶𝘀 𝗳𝗮𝗹𝗹𝗶𝗻𝗴 𝗳𝗮𝘀𝘁 — the quarterly read is already -1.9%. Worth noting: the pain isn't evenly spread. Upper-quartile (higher-value) homes fell 3.2% over the past three months nationally, while the lower price tier actually rose 0.3% over the same period. The top of the market is absorbing most of this correction.
For buyers, the practical upside is choice and leverage. Auction clearance rates have sat below 50% since late May, and total advertised stock is running above average across the combined capitals. Both signs that negotiating power has shifted back toward buyers for the first time in a while.
LENDING UPDATE
Here's some key updates.
𝗗𝗼𝗻’𝘁 𝗽𝗮𝘆 𝘁𝗵𝗲 𝗯𝗮𝗻𝗸 𝗹𝗼𝘆𝗮𝗹𝘁𝘆 𝘁𝗮𝘅 - if you haven't had your loan reviewed in the past 12 months, this is a good window to ask what's on the table.
If your loan doesn’t start with a 5, (or a low 6) speak to us to test the market
𝗕𝗮𝗻𝗸'𝘀 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝗹𝗲𝗻𝗱𝗶𝗻𝗴 𝗽𝗼𝗹𝗶𝗰𝗶𝗲𝘀 𝗮𝗿𝗲 𝗻𝗼𝘄 𝘀𝗲𝘁. They have re-adjusted policy and calculators. Reach out to find out where you standing on borrowing capacity.
𝗬𝗼𝘂 𝗰𝗮𝗻 𝘀𝘁𝗶𝗹𝗹 𝗯𝘂𝘆 𝘄𝗶𝘁𝗵𝗶𝗻 𝗮 𝗦𝗲𝗹𝗳 𝗠𝗮𝗻𝗮𝗴𝗲𝗱 𝗦𝘂𝗽𝗲𝗿 𝗙𝘂𝗻𝗱. But has to be a commercial property.
On the investor side, two things are moving in opposite directions.
Some good news for investors, with gross rental yields have climbed to 3.56% across the combined capitals, the highest level since August 2019, as rents keep rising while values fall.
But the May Budget's changes to negative gearing have shifted the numbers for a lot of investors, and higher yields alone aren't enough to offset the increase in borrowing costs.
If you're weighing up an investment purchase, it's worth running the numbers under the new rules before you commit . Happy to talk you through what's changed.
Source: Cotality
RECAP: PROPERTY LADDER LEARNING
Here's a recap on what we shared in July. Reach out if you want the full detail on any of these, or have a burning question you need answered.
𝗪𝗵𝗮𝘁'𝘀 𝗰𝗵𝗮𝗻𝗴𝗲𝗱 𝗳𝗼𝗿 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝗹𝗲𝗻𝗱𝗶𝗻𝗴 𝗳𝗼𝗹𝗹𝗼𝘄𝗶𝗻𝗴 𝘁𝗵𝗲 𝗻𝗲𝗴𝗮𝘁𝗶𝘃𝗲 𝗴𝗲𝗮𝗿𝗶𝗻𝗴 𝗿𝘂𝗹𝗲𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗠𝗮𝘆 𝗕𝘂𝗱𝗴𝗲𝘁 - including capital gains tax, SMSF lending and which properties are eligible.
𝗗𝗶𝗱 𝘆𝗼𝘂 𝗸𝗻𝗼𝘄, 𝘁𝗵𝗮𝘁 𝘀𝗼𝗺𝗲 𝗳𝗶𝘅𝗲𝗱 𝗿𝗮𝘁𝗲 𝗹𝗼𝗮𝗻𝘀 𝗰𝗮𝗻 𝗵𝗮𝘃𝗲 𝗮𝗻 𝗼𝗳𝗳𝘀𝗲𝘁 𝗮𝗰𝗰𝗼𝘂𝗻𝘁: This is the best of both worlds if you're trying to reduce interest while locking in certainty.
𝗧𝗵𝗲𝗿𝗲'𝘀 𝗼𝗻𝗲 𝗰𝗼𝗻𝘃𝗲𝗿𝘀𝗮𝘁𝗶𝗼𝗻 𝘀𝗺𝗮𝗹𝗹 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗼𝘄𝗻𝗲𝗿𝘀 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗵𝗮𝘃𝗲 𝗶𝗻 𝘁𝗵𝗲 𝗻𝗲𝘅𝘁 𝗳𝗲𝘄 𝘄𝗲𝗲𝗸𝘀: if you're self-employed, talk to your accountant and broker about maximising borrowing capacity 𝘣𝘦𝘧𝘰𝘳𝘦 any new loans are lodged, not after.
𝗧𝗵𝗲 𝘀𝗻𝗼𝘄𝗯𝗮𝗹𝗹 𝗲𝗳𝗳𝗲𝗰𝘁 𝗼𝗳 𝘀𝗺𝗮𝗹𝗹 𝘀𝗮𝘃𝗶𝗻𝗴𝘀: Of you shifted your daily coffee to you loan as extra loan repayments, it would save you $148,700 in interest and reduce loan term by almost 4 years off a $1m mortgage.
𝗪𝗲 𝘀𝗵𝗮𝗿𝗲𝗱 𝟱 𝗿𝗲𝗮𝘀𝗼𝗻𝘀 𝘄𝗵𝘆 𝗬𝗢𝗨𝗥 𝗿𝗮𝘁𝗲 𝗶𝘀 𝗻𝗼𝘁 𝘁𝗵𝗲 𝘀𝗮𝗺𝗲 𝗮𝘀 𝘀𝗼𝗺𝗲-𝗼𝗻𝗲 𝗲𝗹𝘀𝗲’𝘀 including the type of loan, its LVR%, how much you borrow and you broker’s negotiating smarts
𝗪𝗲 𝗲𝘅𝗽𝗹𝗮𝗶𝗻𝗲𝗱 𝗵𝗼𝘄 𝗺𝗼𝘀𝘁 𝗯𝗮𝗻𝗸𝘀 𝗿𝗲𝗾𝘂𝗶𝗿𝗲 𝘆𝗼𝘂 𝘁𝗼 𝗵𝗮𝘃𝗲 𝗴𝗲𝗻𝘂𝗶𝗻𝗲 𝘀𝗮𝘃𝗶𝗻𝗴𝘀- not a gift from family last week, or cash, but money saved and held in your account for over 3 months. Particularly important for first home buyers.
𝗔𝗻𝗱 𝘄𝗶𝘁𝗵 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗽𝗿𝗶𝗰𝗲𝘀 𝗳𝗮𝗹𝗹𝗶𝗻𝗴, 𝘁𝗵𝗲 𝗯𝗶𝗴 𝘄𝗶𝗻𝗻𝗲𝗿𝘀 𝗮𝗿𝗲 𝘂𝗽𝘀𝗶𝘇𝗲𝗿𝘀. While your current home may be lower, it will costs less to upgrade. It could cost you hundreds of thousands of dollars less to upgrade, compared to a growing market.
NEXT STEPS
Many people are feeling frozen in the current market, but the more informed you are, the better decisions you can make on what next.
𝗨𝗽𝗴𝗿𝗮𝗱𝗲𝗿𝘀. This is your window. It costs less to move up the ladder when values are soft, because the gap between your current home and your next one tends to shrink.
𝗥𝗲𝗳𝗶𝗻𝗮𝗻𝗰𝗲𝗿𝘀. Lenders are competing hard for your business. Worth a quick health check on your current rate.
𝗙𝗶𝗿𝘀𝘁 𝗵𝗼𝗺𝗲 𝗯𝘂𝘆𝗲𝗿𝘀. This is the best buying environment in years on price alone. If a deposit is the sticking point, a parental guarantor or gifting arrangement (including via a reverse mortgage) can help bridge the gap.
𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀. yields are up, but check how the new negative gearing rules affect your numbers before you buy.
𝗗𝗼𝘄𝗻𝘀𝗶𝘇𝗲𝗿𝘀 𝗮𝗻𝗱 𝗿𝗲𝘁𝗶𝗿𝗲𝗲𝘀 if equity in the family home could fund the next stage — aged care, renovations, or a cash buffer — it's worth a conversation about your options.
If any of this applies to you, or to someone in your family, reach out and I'll talk you through it.
𝗙𝗿𝗲𝗲 𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗿𝗲𝗽𝗼𝗿𝘁
One last point! With property prices changing quickly, its good to know where you stand. We can provide a free property or suburb report. It will also help tell us your LVR%, and what rates and discounts you may be able to access.
🏠 Property Reporthttps://www.ladderfs.com.au/propertyreport
📅 Book a discovery call: www.ladderfs.com.au/book-now
📞 0414 877 724