how proftable is your homei

At some stage, your home may well be too small or big for your needs. Or perhaps the size is right, but you want to live in a neighbourhood with better amenities or in a suburb with excellent schools for the kids. If you're paying off a home loan for a house located in an area experiencing solid capital growth, you may even make a profit when you sell!

According to the most recent RP Data Pain and Gain report, 91 percent of all home re-sales during the second quarter earned a gross profit.

In fact, nearly one in three (30.5 percent) of home sellers at least doubled their purchase amount when re-selling! Referring to this bracket of sales, RP Data elaborated:

"The gross profit on these re-sales was $14.4 billion and the average gross profit per profit making transaction was $225,830."

Are you living in a hot spot?

RP Data analysed re-sale statistics in states' capital cities and regional areas. The area with the lowest proportion of re-sales that made a loss was Sydney (2.7 percent), followed by Perth (4.8 percent) and regional Northern Territory (6.4 percent).

In regional Western Australia, 43.4 percent of homes sold during the June quarter made a profit of 100 percent or greater, followed by Perth (40.3 percent), Melbourne (36.8 percent), Darwin (34.5 percent) and regional Northern Territory (33.9 percent).

So if you're living in any of these locations, there's a strong chance you could profit when you sell. But what about on a more local scale?

The best suburbs for making a profit

If you're curious about which suburbs are posting the best figures regarding gross profits, the Pain and Gain report has all the juicy details.

The Sydney suburb of Campbelltown had the highest proportion of re-sales that made a gross profit (99.3 percent), while home re-sales in Ku-ring-gai scooped up the award for the highest median profit ($445,000).

There are numerous hot spots around the country. But aside from areas posting strong capital gains, how else can you determine whether you'll make a profit?

Is it time to renovate?

It's also worth considering whether to renovate your home in order to appeal to buyers.

But be wary not to drag your savings account through the mud by overcapitalising. This is when you spend more on renovation projects than you earn back when you sell — essentially a big waste of money!

Ask local real estate agent what buyers are willing to shell out more for — from large kitchens to modern bathrooms — and embark on renovations accordingly.

Story by Kate Wick, Story Source: http://www.ratecity.com.au

Tag: home loans

how proftable is your homei

At some stage, your home may well be too small or big for your needs. Or perhaps the size is right, but you want to live in a neighbourhood with better amenities or in a suburb with excellent schools for the kids. If you’re paying off a home loan for a house located in an area experiencing solid capital growth, you may even make a profit when you sell!

According to the most recent RP Data Pain and Gain report, 91 percent of all home re-sales during the second quarter earned a gross profit.

In fact, nearly one in three (30.5 percent) of home sellers at least doubled their purchase amount when re-selling! Referring to this bracket of sales, RP Data elaborated:

"The gross profit on these re-sales was $14.4 billion and the average gross profit per profit making transaction was $225,830."

Are you living in a hot spot?

RP Data analysed re-sale statistics in states’ capital cities and regional areas. The area with the lowest proportion of re-sales that made a loss was Sydney (2.7 percent), followed by Perth (4.8 percent) and regional Northern Territory (6.4 percent).

In regional Western Australia, 43.4 percent of homes sold during the June quarter made a profit of 100 percent or greater, followed by Perth (40.3 percent), Melbourne (36.8 percent), Darwin (34.5 percent) and regional Northern Territory (33.9 percent).

So if you’re living in any of these locations, there’s a strong chance you could profit when you sell. But what about on a more local scale?

Continue reading ..

 

Reserve bank no 2

At its meeting yesterday, the Reserve Bank Board decided to leave the cash rate unchanged at 2.5 per cent.

Growth in the global economy is continuing at a moderate pace, helped by firmer conditions in the advanced countries. China’s growth remains generally in line with policymakers’ objectives. Commodity prices in historical terms remain high, but some of those important to Australia have declined this year.

Financial conditions overall remain very accommodative. Long-term interest rates and risk spreads remain very low. Emerging market economies are receiving capital inflows. Volatility in many financial prices is currently unusually low. Markets appear to be attaching a very low probability to any rise in global interest rates, or other adverse event, over the period ahead.

In Australia, growth was firmer around the turn of the year, but this resulted mainly from very strong increases in resource exports as new capacity came on line; smaller increases in such exports are likely in coming quarters. Moderate growth has been occurring in consumer demand. A strong expansion in housing construction is now under way. At the same time, resources sector investment spending is starting to decline significantly. Signs of improvement in investment intentions in some other sectors are emerging, but these plans remain tentative as firms wait for more evidence of improved conditions before committing to significant expansion. Public spending is scheduled to be subdued. Overall, the Bank still expects growth to be a little below trend over the year ahead.

Interest rates are very low and for some borrowers have continued to edge lower over recent months. Savers continue to look for higher returns in response to low rates on safe instruments. Credit growth has picked up a little, including most recently to businesses. The increase in dwelling prices has been slower this year than last year, though prices continue to rise. The exchange rate remains high by historical standards, particularly given the declines in key commodity prices, and hence is offering less assistance than it might in achieving balanced growth in the economy.

Home loan

Home owners are taking advantage of record low interest rates to pay off their mortgages faster.

The National Australia Bank says new figures show 85 percent of its mortgage customers pay more than their minimum monthly repayments, Fairfax Media reports.

Such NAB customers are ahead by an average of 13 months now, compared with 12 months a year ago — a "meaningful" shift considering the size of the bank’s mortgage book, said Antony Cahill, NAB’s executive general manager of lending and deposits.

The bank has about 16 percent of the mortgage market with a home loan book worth $241 billion.

NAB said its customers are also paying off credit card debt faster, with the number of accounts paid in full rising six percent in the past year.

"These are themes that point to the Australian consumer being a little bit more careful, a little bit more prudent in terms of understanding debt and ensuring they keep that under control," Mr Cahill was quoted as saying.

Last week the major banks cut fixed interest rates to new lows of less than five percent.

Story source: www.finance.ninemsn.com.au


Property as an investment

Many Australians with home loans are aware of the ability to use the existing equity in their properties in order to further their real estate investment goals but many individuals aren’t actually utilising their equity as they could.

New research from Westpac shows that just 11 percent of Australian homeowners are planning to use their equity to upgrade.

That said, upgrading isn’t the only option. Those with sufficient equity in their properties can also use it to invest in real estate, too.

What is home equity?

A property’s equity can be calculated by deducting the loan balance from the home’s value. If homeowners have purchased real estate in high-growth suburbs, their equity will not only rise as they pay off their mortgages, but also in conjunction with capital growth.

This equity can be used for home renovations, property investment and more.

Continue reading ..

interest rates
 
Statement by Glenn Stevens, Governor: Monetary Policy Decision

At its meeting today, the Board decided to leave the cash rate unchanged at 2.5 per cent.

Growth in the global economy is continuing at a moderate pace, helped by firmer conditions in the advanced countries. China’s growth appears to have slowed a little in early 2014 but remains generally in line with policymakers’ objectives. Commodity prices in historical terms remain high, but some of those important to Australia have continued to decline of late.

Financial conditions overall remain very accommodative. Long-term interest rates have fallen further and risk spreads remain low. Emerging market economies are once again receiving capital inflows. Volatility in many financial prices is currently unusually low. Markets appear to be attaching a very low probability to any rise in global interest rates over the period ahead.

In Australia, the economy grew at a below-trend pace in 2013 overall, but growth looks to have been somewhat firmer around the turn of the year. This has resulted partly from very strong increases in resource exports as new capacity has come on stream, but smaller increases in such exports are likely in coming quarters. Moderate growth has been occurring in consumer demand and a strong expansion in housing construction is now under way. At the same time, resources sector investment spending is set to decline significantly. Signs of improvement in investment intentions in some other sectors are emerging, but these plans remain tentative, as firms wait for more evidence of improved conditions before committing to significant expansion. Public spending is scheduled to be subdued.

There has been some improvement in indicators for the labour market in recent months, but it will probably be some time yet before unemployment declines consistently. Recent data confirm that growth in wages has declined noticeably. If these and other domestic costs remain contained, inflation should remain consistent with the target over the next one to two years, even with lower levels of the exchange rate.

Monetary policy remains accommodative. Interest rates are very low and for some borrowers have edged lower over recent months. Savers continue to look for higher returns in response to low rates on safe instruments. Credit growth has picked up a little. Dwelling prices have increased significantly over the past year, though there have been some signs of a moderation in the pace of increase recently. The earlier decline in the exchange rate is assisting in achieving balanced growth in the economy, but less so than previously as a result of the higher levels over the past few months. The exchange rate remains high by historical standards, particularly given the further decline in commodity prices.

Looking ahead, continued accommodative monetary policy should provide support to demand, and help growth to strengthen over time. Inflation is expected to be consistent with the 2–3 per cent target over the next two years.