Deciding whether to buy a new home before selling your current one or to sell your home before buying a new one is a significant choice, and it can feel a bit overwhelming. Both options come with their own set of benefits and challenges, and your decision will be influenced by various factors, including the state of the housing market, your financial situation, and your personal preferences.

Let’s explore these considerations to help you make the best choice for your next big move.

Buying before selling

If you choose to buy your new home before selling your current one, you get to enjoy the luxury of time. You won’t be pressured to find a new home quickly because you’re not in a rush to sell your existing property. This approach allows you to take your time exploring different neighbourhoods, visiting open houses, and making thoughtful decisions without the stress of a ticking clock.

Once you’ve purchased your new home, you can move in at your own pace. This can make the transition smoother and less stressful, as you may not need to worry about temporary housing or moving twice.

However, buying before selling does come with financial considerations. A bridging loan can assist you in managing this period while you look to sell your existing property. This is a short-term loan, typically between 6 and 12 months that can help you finance the purchase of a new property while you sell your current property. While this type of loan can provide extra time you need to sell your existing property, it’s important to remember that you’ll need to demonstrate that you are able to pay your original home loan and the bridging finance loan at the same time during the period between buying and selling.

Additionally, if the market fluctuates while you’re holding both homes, you might find yourself needing to adjust the selling price of your old home, potentially affecting your financial plans.

Selling before buying

On the other hand, selling your home before buying a new one offers a different set of benefits. When you sell first, you gain financial clarity. You’ll know exactly how much money you have available for your new home, as the proceeds from the sale can be used as a down payment. This clear understanding of your budget can make the home-buying process less stressful and more straightforward.

Another advantage is that you become a more attractive buyer in the eyes of potential sellers. Without the need to sell your old home first, you’re in a stronger position to negotiate and make offers. Sellers often prefer buyers who don’t have contingencies, which can give you an edge in competitive markets. This increased leverage can be especially valuable if you’re looking to purchase in a rising market, where desirable properties might be snapped up quickly.

Yet, selling before buying also presents its own set of challenges. Once your home is sold, you may need to find a new place quickly, which can be stressful if the market is competitive or if you have specific needs. There might be a period where you’re between homes, which could necessitate temporary living arrangements. This could be inconvenient and might add to the stress of your move.

Timing the market

The state of the housing market plays a crucial role in your decision-making process. In a rising market, buying before selling can be advantageous. You’ll have the opportunity to lock in a new property at current prices before they go up further. However, you need to be prepared for the financial strain of carrying two mortgages.

Conversely, in a falling market, selling before buying might be the wiser choice. You can sell your current home and then take your time finding a new home, potentially benefiting from lower prices in the future.

Making the right choice for you

Ultimately, whether you decide to buy before selling or sell before buying depends on your individual circumstances. Consider your financial situation carefully—do you have the resources to handle two mortgages, or would you prefer the clarity of knowing your budget before making a purchase? Think about the current market conditions and how they might impact your decision. And, of course, reflect on your personal preferences and priorities for your next home.

Whatever your decision we can helping you navigate the financing complexities of buying and selling to ensure that your transition is stress-free as possible.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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A cooling market as we head into the warmer months

Australia’s property market is finishing the year showing a softening in prices with annual growth in national home values continuing to ease, reducing to 5.5% over the 12 months ending November, down from a recent peak annual growth rate of 9.7% in February.

CoreLogic’s national Home Value Index (HVI) has reported a quarterly increase of 0.5 per cent, compared to around 2 per cent the same time last year. In line with a softening market the HVI recorded a monthly movement of just 0.1% – the smallest monthly gain since the growth cycle commenced in February last year. The median dwelling price in Australia now sits at $812,933, up from the same time last year at $753,654.

The weak positive movement over the quarter was supported by the mid-sized capitals, led by Perth, followed by Adelaide and Brisbane, offsetting declines in Darwin, Canberra, Melbourne and Sydney.

Increased stock levels contribute to lower growth

A rise in advertised stock levels has contributed to lower growth in home values, particularly in the weakest markets. Advertised listings have increased around 16 per cent since the end of winter across the combined capitals, with Perth (+33%) and Adelaide (+25%) recording the largest lift in advertised stock levels through the spring season, albeit from an extremely low base.

Alongside the rise in advertised supply, the number of home sales is declining. With higher levels of advertised supply and less purchasing activity, selling conditions have loosened.

The outlook

The housing outlook is likely to continue to be impacted by rising advertised stock levels and a slowdown in purchasing activity.

Interest rates appear to be on hold for the medium term. The October inflation indicator came in at a healthy 2.1% for October, well inside the RBA’s 2-3% target range; but the RBA will be looking through the headline results and focusing on the core inflation outcome, which unfortunately moved in the wrong direction in October.

One positive is labour markets are holding tight, with the unemployment rates holding at around 4 per cent for the past couple of months. Additionally, low levels of new housing supply will persist into the near future.

On the downside, affordability challenges continue to be felt across most sectors of the housing market. Economic activity is soft, and households have largely drawn down their savings buffers accrued through the pandemic. Looking at affordability measures, debt servicing ratios were at a record high in the last quarter and dwelling values relative to household incomes were also close to record highs.

Dwelling values over the quarter

Melbourne

The Victorian capital posted a -0.4% quarterly move according to CoreLogic figures, taking the city’s median dwelling price to $776,949. Investors should take note that the gross rental yield figure for Melbourne now sits at 3.7%.

Sydney

In the three months to October’s end, Sydney experienced a very subtle dwelling value change of –0.5% resulting in a median of $1.196 million. The gross rental yield for the Harbour City is currently the lowest of the capitals at 3.0%.

Brisbane

The Queensland capital has again recorded the second most expensive spot for dwelling values at $886,540, although growth is softening after a quarterly rise of 1.8%. Brisbane has recorded a gross rental yield of 3.7&.

Canberra

The national capital recorded a decline of -0.3% during the quarter with the median now sitting at $851,731. For Canberra, the gross rental yield is 4.0%.

Perth

Continuing its lead as the best-performing capital over the quarter, Perth jumped 3% in three months taking its medium to $808,090. Perth recorded 4.2% gross rental yield.

For more information about how you might be able to purchase a property in the current market, get in touch with us today.

Note: all figures in the city snapshots are sourced from: CoreLogic’s national Home Value Index (November 2024) 

If you have any questions or need any information please give us a call on 039723 0522.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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There has been a lot of “will they, won’t they” speculation about the RBA’s cash rate announcements. Interest rates are big news as they have a significant impact on the financial decisions we face, so what does it mean that fixed rates are on the move?

Recently, we’ve begun to see some movements for the fixed interest rates, with a number of lenders starting to cut their fixed rates after many years of rises (and some stagnation) in anticipation of a future rise to come.

To understand the current landscape, it’s essential to grasp how interest rates work. The Reserve Bank of Australia (RBA) plays a crucial role by setting the cash rate during its regular meetings. The cash rate is the interest rate on overnight loans between banks and is a key tool for managing inflation and economic growth. When the RBA changes the cash rate – either raising it to combat inflation or lowering it to stimulate the economy—these adjustments ripple through the financial system.

However, fixed interest rates are a bit different. While variable rates fluctuate with the cash rate, fixed rates are determined by individual banks based on their expectations of where the cash rate is heading in the future.

The current trend of fixed rates declining

In recent months, we’ve started to see a decline in fixed interest rates across some providers. So, what’s contributing to this shift?

Inflation trends:

While inflation surged during the pandemic, there are signs that it is stabilising and even declining. With inflation expectations easing, banks may feel more confident in offering lower fixed rates.

RBA’s role and commentary:

The RBA has adopted a cautious approach, being very open about its commitment to stabilising inflation as its major focus. Changes to the cash rate by the RBA are a powerful lever in bringing inflation down. The RBA has stated its objective is to get consumer price inflation (CPI) back down to between 2 and 3 per cent and the trend is now heading in that direction.

This kind of shift signals to banks that the environment may become more favourable for borrowing, prompting them to reduce fixed rates in anticipation of a better lending landscape.

Increased competition:

The mortgage market is highly competitive, with lenders eager to attract borrowers. As banks compete for your business, lowering their fixed rates can be a way to gain an edge. This is good news for borrowers, as it leads to more attractive options in the market.

Considerations

It all means fixed rates are becoming relatively more attractive to borrowers, but the question is whether the initial moves are enough to shift the market somewhat away from variable rates.

With the cash rate still on ice for now, more than 95 per cent of home lenders are opting for variable deals. This is a remarkable difference from the height of the pandemic, when fixed rates accounted for as much as 46%  of loans issued.

If you are thinking of taking on a fixed rate loan or refinancing to a fixed rate it’s important to consider timing. Interest rates can fluctuate, the landscape remains dynamic, and predicting their movement can be challenging.

It’s also important to weigh up the pros and cons of fixed versus variable loans. The beauty of fixed rate loans is the stability in repayments protects you from rising rates and simplifies budgeting. So, for those who value or need that certainty – say your debt level is high, your cash flow position isn’t strong, and you want to take some risks off the table – fixed rates can be a viable approach. Lower fixed rates can also lead to significant savings; however, you do need to consider that it is likely to be early days for fixed rate movements and you may miss out on further savings should rates continue to fall, when the cash rate is revised downwards. Additionally, fixed loans often have limited flexibility regarding extra repayments or early exit fees.

In any case, whether you’re a first-time buyer or looking to refinance, it’s good to stay informed as understanding the current climate can empower you to make the best decisions for your financial future.

We can help you navigate this evolving landscape and make the most of the options available to you.

If you are starting your journey to buy a home, one of the first things you need to do is determine what you will be able to borrow so you are narrowing the field to hone in on properties you will likely be able to afford.

A couple of the terms you may have come across when you are at this stage of determining your borrowing power are ‘pre-qualification’ and ‘pre-approval.’ While these sound like they might be the same thing, there are some important distinctions between them a home buyer needs to understand.

Differentiating between pre-qualification and pre-approval

When applying for a loan, the main difference between pre-qualification and pre-approval lies in the depth of scrutiny and commitment from the lender, with pre-qualification being more of a guideline and pre-approval being more solid.

Pre-qualification – a non-binding estimate

Pre-qualification is the first step in the mortgage process, providing an estimate of how much you may be able to borrow based on self-reported financial information. This preliminary assessment typically involves a basic questionnaire or a conversation regarding your income, assets, debts, and credit score.

There are some benefits to going through the pre-qualification process. It gives you a general idea of the price range of homes you can consider, guiding your initial search.

Pre-qualification usually does not involve a hard credit inquiry, so does not have any impact on your credit score and finally it provides early insights into potential financing options.

However, it’s important not to make the mistake of thinking a pre-qualification and pre-approval is a binding indication of how much a lender is willing to provide. As the information you provide is not verified, it’s considered less reliable and it’s a good idea to consider a pre-qualification as more of a ballpark figure of what you could potentially borrow.

Pre-approval – a detailed commitment

Pre-approval is a more rigorous process where a lender verifies your financial information and provides a conditional commitment to lend up to a specified amount under certain conditions. This involves submitting documentation such as wages, bank statements, and tax returns for thorough evaluation so you’ll need to get your financial house in order prior to the pre-qualification process.

At this stage we’ll work with you to review your options in terms of mortgage products and lenders. When you are ready to apply for pre-approval, the selected lender then verifies this information and performs a credit check to assess your financial situation in detail. Based on this verification, the lender provides a conditional commitment to lend you a specified amount under certain conditions.

The advantages of pre-approval for property purchases

As we enter the warmer months the housing market typically sees increased activity and competition among buyers, which is why obtaining pre-approval should be a priority if you are getting serious about buying. Pre-approval does not just provide potential lenders with a comprehensive view of your financial health, it also empowers and informs your decisions. Knowing your approved loan amount allows for more precise budgeting and confident negotiations.

Armed with a pre-approval letter, you can concentrate on properties within your budget range, optimising your time and efforts. In a bustling market, sellers are more likely to favour offers from pre-approved buyers due to greater assurance of financial capacity and the potential for a swift transaction.

Pre-approval will also enable you to move faster and speed up the process of finalising your loan should you be successful in your bid for your new property. When you find the right home, the last thing you want is to miss out as your finances took too long.

Planning ahead for a successful purchase

If you want to purchase in the next few months, now is the ideal time to start preparing for your home purchase journey.

Start your journey with confidence by chatting to us at the pre-qualification stage and obtaining pre-approval early, ensuring you’re well-positioned to capitalise on opportunities and achieve your homeownership dreams as the property market warms up alongside the weather.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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At its latest meeting, the Reserve Bank Board announced it was leaving the cash rate at 4.35%.

Please click here to view the Statement by Michele Bullock, Governor: Monetary Policy Decision.

With the official rate on hold, we’re watching closely what the banks do with their rates, as some of Australia’s biggest lenders may change their rates.

You will be notified directly by your bank if and when they change their interest rate.

Please get in touch 03 9723 0522 if you would like to discuss recent rate movements or if you would like to review your finance options.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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New world order: Surprise cities climbing the residential ranks

There’s been yet another changing of the guard in Australian property along with the arrival of spring.

Rarely seen in close to four decades of real estate record keeping, Melbourne values have dipped below those of Adelaide and Perth, signalling a shake up for capital city property prices.

In June, Brisbane’s median dwelling value had already surpassed the Victorian capital and Canberra to take out second place on the CoreLogic totem pole, and now just two months later, it has fallen to fifth on the list.

Cost of living pressures and a continued plateau in the official cash rate by the RBA has resulted in a quieter than average winter in real estate. CoreLogic’s September Home Value Index revealed that national home values rose only 0.5% during August, representing 19 months of consecutive increases.

Smaller city standouts

For much of the past two years, Perth, Adelaide and Brisbane have led the pack in terms of growth rates among Australia’s capital cities. Perth, in particular, has seen extraordinary growth with values up 23.24% annually, followed by Adelaide at 15.12% and Brisbane at 13.95%.

This rapid rise has propelled both Perth and Adelaide prices past Melbourne. The South Australian capital’s median dwelling value is now at $790,800 while Perth’s is $785,250, compared to $776,044 for Melbourne – now the third lowest median among the capital city markets. Only Darwin and Hobart are now cheaper.

Melbourne’s market explained

It’s the first time Perth’s median dwelling value has been higher than Melbourne’s since February 2015, when the city was coming off an iron-ore boom. Adelaide has never recorded a median value higher than Melbourne in CoreLogic’s 40-year dwelling value series.

Melbourne’s real estate landscape has been on a downward trend for six consecutive months, which is attributed to a range of factors, from affordability constraints and elevated interest rates, to changes in investor sentiment and Victorian tax levies.

What’s also worth noting is that Melbourne is a unit-heavy market, where apartments account for approximately a third of the city’s housing stock—compared to just 16 per cent in Perth and Adelaide. This skew toward unit prices drags down the overall median dwelling value and, in reality, median house and unit values across Perth and Adelaide are still lower than in Melbourne.

Dwelling values over the quarter

Melbourne

Currently with a dwelling median sitting at $776,044, after a quarterly fall of -1.2%, Melbourne is  now one of Australia’s more affordable cities according to CoreLogic data. Since the onset of Covid in March 2020, the Victorian capital’s median has increased by 10.1 per cent, representing an average $71,196 move in home prices. Currently, the gross rental yield is 3.7%, however investors are collectively reevaluating their property portfolios since the introduction of a new Victorian land tax on non-primary residences.

Sydney

The median value of homes in Sydney is $1.18 million after a modest three-month movement of 0.8%. At the beginning of the pandemic, Sydney’s median was $263,838 less but has since risen 28.8%. The gross rental yield for investment properties in the Harbour City is currently 3.1 per cent.

Brisbane

Still holding its spot as Australia’s second priciest city for residential real estate, Brisbane’s median dwelling value is $875,040 after a quarterly increase of 2.9 per cent. Back at the start of Covid, the Queensland capital’s median was $344,896 less but has subsequently soared by 65.1%. Today the gross rental yield for the city is 3.7%.

Canberra

The national capital was knocked out of second place back in June and recorded a slight -0.2% decrease in the median dwelling value for the quarter to $845,875. Home values have risen an average of $201,558, or 31.3 per cent, since the start of the pandemic. The gross rental yield in Canberra is 4.1%.

Perth

On an incredible trajectory since March 2020, Perth’s median home value has skyrocketed 72.5% to $785,250. Over the last three months it was also home to the country’s largest capital city quarterly increase of 5.7%. Perth’s gross rental yield is sitting at 4.3%.

Note: all figures in the city snapshots are sourced from: CoreLogic’s national Home Value Index (September 2024) 

If you have any questions or need any information please give us a call on 039723 0522.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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As the real estate market begins to bloom with opportunities for homebuyers, for those who wish to buy in the next few months understanding the distinctions between pre-qualification and pre-approval for a home loan can be pivotal in securing your dream home.

If you are starting your journey to buy a home, one of the first things you need to do is determine what you will be able to borrow so you are narrowing the field to hone in on properties you will likely be able to afford.

A couple of the terms you may have come across when you are at this stage of determining your borrowing power are ‘pre-qualification’ and ‘pre-approval.’ While these sound like they might be the same thing, there are some important distinctions between them a home buyer needs to understand.

Differentiating between pre-qualification and pre-approval

When applying for a loan, the main difference between pre-qualification and pre-approval lies in the depth of scrutiny and commitment from the lender, with pre-qualification being more of a guideline and pre-approval being more solid.

Pre-qualification – a non-binding estimate

Pre-qualification is the first step in the mortgage process, providing an estimate of how much you may be able to borrow based on self-reported financial information. This preliminary assessment typically involves a basic questionnaire or a conversation regarding your income, assets, debts, and credit score.

There are some benefits to going through the pre-qualification process. It gives you a general idea of the price range of homes you can consider, guiding your initial search.

Pre-qualification usually does not involve a hard credit inquiry, so does not have any impact on your credit score and finally it provides early insights into potential financing options.

However, it’s important not to make the mistake of thinking a pre-qualification and pre-approval is a binding indication of how much a lender is willing to provide. As the information you provide is not verified, it’s considered less reliable and it’s a good idea to consider a pre-qualification as more of a ballpark figure of what you could potentially borrow.

Pre-approval – a detailed commitment

Pre-approval is a more rigorous process where a lender verifies your financial information and provides a conditional commitment to lend up to a specified amount under certain conditions. This involves submitting documentation such as wages, bank statements, and tax returns for thorough evaluation so you’ll need to get your financial house in order prior to the pre-qualification process.

At this stage we’ll work with you to review your options in terms of mortgage products and lenders. When you are ready to apply for pre-approval, the selected lender then verifies this information and performs a credit check to assess your financial situation in detail. Based on this verification, the lender provides a conditional commitment to lend you a specified amount under certain conditions.

The advantages of pre-approval for property purchases

As we enter the warmer months the housing market typically sees increased activity and competition among buyers, which is why obtaining pre-approval should be a priority if you are getting serious about buying. Pre-approval does not just provide potential lenders with a comprehensive view of your financial health, it also empowers and informs your decisions. Knowing your approved loan amount allows for more precise budgeting and confident negotiations.

Armed with a pre-approval letter, you can concentrate on properties within your budget range, optimising your time and efforts. In a bustling market, sellers are more likely to favour offers from pre-approved buyers due to greater assurance of financial capacity and the potential for a swift transaction.

Pre-approval will also enable you to move faster and speed up the process of finalising your loan should you be successful in your bid for your new property. When you find the right home, the last thing you want is to miss out as your finances took too long.

Planning ahead for a successful purchase

If you want to purchase in the next few months, now is the ideal time to start preparing for your home purchase journey.

Start your journey with confidence by chatting to us at the pre-qualification stage and obtaining pre-approval early, ensuring you’re well-positioned to capitalise on opportunities and achieve your homeownership dreams as the property market warms up alongside the weather.

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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