Big Banks Lose Market Share

Borrowers are shopping around for more competitive interest rates with big banks losing out to minor lenders.

Online property exchange PEXA figures show the number of people refinancing their mortgages is rising.

PEXA’s data covers 95% of refinancing commitments.

It shows the Big Four banks are losing thousands more loans than they are winning each month.

PEXA head of research Mike Gill says the number of refinancing deals lodged through its platform has increased by almost 50% in Queensland, 46% in WA, 23% in Victoria, and 15.6% in NSW.

Macquarie analyst Victor German says the mortgage market increased by about $31 billion in the three months to April, but the Big Four accounted for only $11.5 billion of those loans.

German says in the past the big banks were able to offer “rock-bottom fixed interest rates” below what smaller lenders could – but that is no longer the case.

As a result, the big banks are losing market share.

Census Depicts A Strata Story

Governments throughout Australia need to pay more attention to the needs of those living in high density housing, according to the Strata Community Association (SCA).

SCA (Qld) Senior-Vice President Chris Irons says the 2021 Census data reveals 10% of Australians live in an apartment.
He says this shows how important it is for strata housing to be at the forefront of policy making.

“A quick examination of the housing data from the 2021 Census indicates a tremendous trend towards higher density apartment living,” Irons says.

“In the 2016 Census, there were estimated to be just over 1.2 million occupied apartments across the country. That figure has exploded to approximately 1.7 million. That’s about 100,000 apartments being constructed on average every year.

“There needs to be recognition of this growing shift to shared housing. The days of the quarter-acre block with a yard being the norm are rapidly receding. Reforms are needed to help ensure we manage this shift correctly.”

Cheaper To Buy vs Rent In 3300 Places

The rental crisis means one in four homes will be cheaper to buy than rent over the next ten years.

PropTrack’s Buy or Rent Report reveals 3,300 suburbs where it is cheaper to buy than rent.

Nationally 27% of all dwellings are cheaper to buy than rent, down from more than 50% at the same time last year. More than half the dwellings in Queensland, WA and the Northern Territory are estimated to be cheaper to buy rather than rent.

In the Northern Territory 98% of properties fall into this category, followed by Western Australia 62% and Queensland 51%.

High prices in Victoria mean only 7% of properties are cheaper to buy than rent, while only 10% in NSW are in this category.

The figures are calculated by comparing mortgage repayments on the median dwelling price with the median rent.

The biggest difference in payments is in Fly Creek in the Northern Territory where buying is $1,620 cheaper per month than renting.

Property Prices Lift Household Wealth

Household wealth figures are rising, thanks mostly to growing property prices.
According to ABS figures, total household wealth rose by 1.2% to a record $14.9 trillion in the March 2022 Quarter.

Residential property assets contributed 1.4 percentage points to that growth.
ABS head of finance and wealth Katherine Keenan says even though the pace of property price growth has started to moderate in Sydney and Melbourne, increases in other capital cities and regional areas resulted in an overall rise in house prices during the quarter.

The figures show wealth per capita is now a record high of $574,807, which is 0.6% higher than the previous quarter.

Although household wealth has increased, the report found superannuation balances are down by 1.3% as a result of the poor performance of overseas share markets.Keenan says since the start of the pandemic in 2020, appreciating asset prices have boosted household wealth by 35.3%, and residential property accounts for most of this growth.

Census Reveals Nation’s Changing Face

Australians are living closer together than ever before, with 2021 Census data revealing more than one in ten now live in apartments.

The figures show Australia’s population is growing fast, more than doubling since 1971 to almost 25.5 million people.

The number of Millennials (aged 25 to 39) is now at a similar level to Baby Boomers (aged 55 to 74) with 5.4 million in each group.

Statistician Dr David Gruen says the data shows who we are as a nation and how we have changed.

More than one million new residents arrived in Australia between 2017 and 2021 and now the proportion of Australian residents born overseas or have a parent born overseas is more than half.

The largest increase in country of birth outside of Australia is India with 217,963 additional people counted.

The Aboriginal and Torres Strait Islander population has also increased by a quarter since 2016 to 812,728 making up 3.2% of the total people counted.

NSW Begins To Scrap Stamp Duty

First-home buyers in NSW will have a choice of paying upfront stamp duty or switching to an annual land tax, as the State Government starts a promised overhaul of transfer tax for residential property sales.

In a trend which is gaining momentum nationwide, NSW first-home buyers who choose not to pay stamp duty on the sale price at the point of purchase will instead pay a land tax fixed at 0.3% of the assessed land value plus $400 every year.

Premier Dominic Perrottet says the measure will make home ownership more affordable for FHBs and let more younger buyers enter the market as upfront costs will reduce.

For a home with a $1m land value, homebuyers opting for land tax would be exempt from $45,000 in stamp duty in favour of paying a $3,400 land tax a year.

The land tax “opt-in” scheme will spread some of the load of upfront housing costs – providing homebuyers accept they face an indefinite annual tax on the family residence.

Australia has 13mil spare bedrooms

New figures show there are 13 million spare bedrooms in Australia despite the massive rental crisis.

The Survey of Income and Housing figures show two-thirds of those rooms are in houses with only a couple or a single person living in them.
It predicts the number of “vacant” rooms will continue to rise as a result of Australia’s ageing population holding on to “empty nests” with little incentive to downsize.

The Centre for Independent Studies chief economist Peter Tulip says changes to stamp duty could relieve some of the financial disincentive to downsizing.

“Tax on [property] turnover means people are in houses that don’t suit their circumstance,” he says. “So, we would get a better allocation of houses if we replace stamp duty with land tax.”

He says removing the family home exemption from the aged pension asset test could also help.

Demographics Group’s Simon Kuestenmacher says many delay downsizing because they prefer to age at home rather than enter aged care.

Unemployment Sits At Historic Low

Unemployment figures continue to sit at historic lows with another 60,000 people employed last month.

The latest Australian Bureau of Statistics figures show the unemployment rate remains at 3.9% for the third consecutive month.
At the same time, the under-employment rate dropped to a 14-year low, at 5.7%.

The ABS says average employment growth over the past three months continues to be stronger than the pre-pandemic levels.

ABS head of labour statistics Bjorn Jarvis says the participation rate – people in work or looking for employment – also reached a record high of 66.7%.

“For the first time ever, more than two out of three Australians aged 15 and over were participating in the labour force,” Jarvis says.

The Australian Chamber of Commerce and Industry’s Andrew McKellar says Australian businesses are facing the second worst workforce shortages in the OECD.BIS Oxford Economics’ Sean Langcake says the low unemployment rate will add to wage pressures.

94% Of Sellers Make A Profit

The number of properties selling for more than the
owners initially paid may have fallen slightly in the
past quarter, but overwhelmingly sellers are still
coming out on top.

CoreLogic’s latest Pain & Gain Report, which analysed
about 106,000 property resales in the March 2022
Quarter, recorded a 0.3 percentage point decline in
the number of profit-making sales nationally – but
the level of gains increased in 10 of the 15 market
jurisdictions.CoreLogic’s Head of Research Eliza
Owen says 93.7% of sales are still at a profit.

Median gains nationally are $290,000, with Sydney
sellers recording the biggest median gain of $415,000
and Perth the lowest at a still healthy $119,000.

For those who lost out on a sale, the median loss was

“Our analysis shows the median hold period nationally
is nine years,” Owens says.

“Since then, Australian dwelling values have increased
70.3%, or the equivalent of around $309,000 in the
median dwelling value across Australia.”