Westpac's interest rate rise is no surprise and it should be something investors seriously consider, experts say... NSW strata amendments introduced to parliament...
Westpac’s decision this week to raise interest rates on both investor and owner occupier loans has been described as a necessary and unsurprising move.
The bank this week announced that from mid-November it will be raising interest rates by 0.2%, and in a statement said it was in response to a need to hold more capital against their mortgage book.
While the country’s official cash interest rate has remained steady since May, John Kolenda, director of mortgage broking network 1300HomeLoan, said it doesn’t come at a shock that banks are moving their interest rates out of cycle.
“While the RBA's cash rate has stayed at a record low of 2% since May and there are expectations of further interest rate relief before the end of the year, the central bank's decisions are rapidly becoming redundant,” Kolenda said.
“Westpac is the first to raise rates out of cycle and other lenders are likely to follow suit,” he said.
Kolenda said the changed capital requirements for the banks, which come from the Australian Prudential Regulation Authority (APRA), would help to make Australia’s banks some of the strongest in the world, but they also mean future rate cuts by the RBA are unlikely to be passed on.
Sam Saggers, chief executive officer of Positive Real Estate, believes Westpac’s decision was also likely in part due to the size of their mortgage book.
“The banks have been forced into restricting lending as a result of the rampant growth, particularly in the Sydney market,” Saggers said.
“Westpac has more exposure to the residential property market than the other major banks, therefore they are the first bank to act as a result of these changes,” he said.
While speculation is continuing to mount about the future of Sydney’s property market, Saggers believes Westpac’s decision is a sign investors in the city should take notice of.
“The dynamics of the Sydney market have changed, things should start to cool and slow down, which is much needed. Investors should lock in their equity now, as we may have just seen the peak of the market,” he said.
“Locked in equity can be kept in an offset account and be used to reinvest elsewhere. Smart investors are migrating their new equity to Brisbane and Melbourne, where the property market is less affected by the affordability issues that Sydney faces.”
NSW strata amendments introduced to parliament
Proposed changes to the legislation covering strata agreements in New South Wales will make living in and buying apartments in the state more attractive according to the head of a Sydney based strata management firm.
NSW Minister for Innovation and Better Regulation Victor Dominello, earlier this week introduced two bills into parliament – the Strata Scheme Management Bill and the Strata Scheme Development Bill - that contain more than 90 amendments to the state’s current legislation.
The most significant of the changes include the requirement that only 75% of owners would need to agree for an apartment building to be sold, the requirement of developers to lodge a bond of 2% of the contracted price of the building as a form of security to fix any defective work, restricting proxy vote farming and giving management committees greater power to deal with issues such as parking, pets and smoke drift.
“I think if you look at it from anybody’s point of view the changes are definitely a good thing. I think they’re definitely going to make life easier for people living in apartments, people who want to buy apartments and the management committees,” Michael Vumbaca, general manager of Jamesons Strata Management, said.
“There’s a lot of bureaucracy involved in strata living, and the changes to how committees can deal with the issues of smoking, pets and parking will cut down on a lot of that which I think will be really welcomed.”
For buyers in particular, Vumbaca, believes the ability to sell with 75% agreement and the 2% bond will be welcomed.
“If you’re in an older scheme that doesn’t really have the funds for maintenance and improvement, then the easing the sale requirements are going to be a real positive,” he said.
“The bond is a real positive and it’s really good to see the government do something to protect the rights of buyers.”
The bank this week announced that from mid-November it will be raising interest rates by 0.2%, and in a statement said it was in response to a need to hold more capital against their mortgage book.
While the country’s official cash interest rate has remained steady since May, John Kolenda, director of mortgage broking network 1300HomeLoan, said it doesn’t come at a shock that banks are moving their interest rates out of cycle.
“While the RBA's cash rate has stayed at a record low of 2% since May and there are expectations of further interest rate relief before the end of the year, the central bank's decisions are rapidly becoming redundant,” Kolenda said.
“Westpac is the first to raise rates out of cycle and other lenders are likely to follow suit,” he said.
Kolenda said the changed capital requirements for the banks, which come from the Australian Prudential Regulation Authority (APRA), would help to make Australia’s banks some of the strongest in the world, but they also mean future rate cuts by the RBA are unlikely to be passed on.
Sam Saggers, chief executive officer of Positive Real Estate, believes Westpac’s decision was also likely in part due to the size of their mortgage book.
“The banks have been forced into restricting lending as a result of the rampant growth, particularly in the Sydney market,” Saggers said.
“Westpac has more exposure to the residential property market than the other major banks, therefore they are the first bank to act as a result of these changes,” he said.
While speculation is continuing to mount about the future of Sydney’s property market, Saggers believes Westpac’s decision is a sign investors in the city should take notice of.
“The dynamics of the Sydney market have changed, things should start to cool and slow down, which is much needed. Investors should lock in their equity now, as we may have just seen the peak of the market,” he said.
“Locked in equity can be kept in an offset account and be used to reinvest elsewhere. Smart investors are migrating their new equity to Brisbane and Melbourne, where the property market is less affected by the affordability issues that Sydney faces.”
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For all the claims that home ownership is now ‘out of reach’, Gen Ys are getting into property, and the property industry is scrambling to adapt to them.
For all the claims that home ownership is now ‘out of reach’, Gen Ys are getting into property, and the property industry is scrambling to adapt to them.
NSW strata amendments introduced to parliament
Proposed changes to the legislation covering strata agreements in New South Wales will make living in and buying apartments in the state more attractive according to the head of a Sydney based strata management firm.
NSW Minister for Innovation and Better Regulation Victor Dominello, earlier this week introduced two bills into parliament – the Strata Scheme Management Bill and the Strata Scheme Development Bill - that contain more than 90 amendments to the state’s current legislation.
The most significant of the changes include the requirement that only 75% of owners would need to agree for an apartment building to be sold, the requirement of developers to lodge a bond of 2% of the contracted price of the building as a form of security to fix any defective work, restricting proxy vote farming and giving management committees greater power to deal with issues such as parking, pets and smoke drift.
“I think if you look at it from anybody’s point of view the changes are definitely a good thing. I think they’re definitely going to make life easier for people living in apartments, people who want to buy apartments and the management committees,” Michael Vumbaca, general manager of Jamesons Strata Management, said.
“There’s a lot of bureaucracy involved in strata living, and the changes to how committees can deal with the issues of smoking, pets and parking will cut down on a lot of that which I think will be really welcomed.”
For buyers in particular, Vumbaca, believes the ability to sell with 75% agreement and the 2% bond will be welcomed.
“If you’re in an older scheme that doesn’t really have the funds for maintenance and improvement, then the easing the sale requirements are going to be a real positive,” he said.
“The bond is a real positive and it’s really good to see the government do something to protect the rights of buyers.”
In depth: Feeling time-poor? 8 ways to get more done in fewer hours
Top broker Joshua Vecchio shares his eight tips to obtain the win-win of achieving more in less time.
Top broker Joshua Vecchio shares his eight tips to obtain the win-win of achieving more in less time.
