Jimmydee's Jabber

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G’day everyone, and welcome to my last newsletter for 2024!

I hope everyone is well, and not feeling too burnt out from the USA election coverage that I am sure is everywhere you look.

Since my last newsletter the Cairns property market has continued creeping up, but perhaps at a slower pace. The common problems people are still finding in the market is stock, and affordability.

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Stock

Anyone how is actively looking at properties know that they aren’t staying up for too long with the market still booming, as well as the sales prices continuing to go up especially with most sale situations having multiple offers. According to Realestate.com, the median house price in North cairns is $667,400 (November 2023 – October 2024) which is a 16.1% growth in the last 12 months.

I have seen a surge in popularity for units in Cairns as they are still very cheap comparatively. But this can vary, units will typically have a lower purchase price, but some of the additional costs (Body Corp, sinking fund, etc) can be very high and close the gap between a house in some instances, so if you are looking at units its always a good idea to get clarity on what the body Corp costs are.

I have also noticed a lot of buyers, especially first home buyers deciding to look for properties on the Southside as you tend to get more value for your money out that way as opposed to Cairns and the beaches. Additionally, after having some time with little land development in the area, the Cutters rise estate in Gordonvale has been rolled out which is great for those looking to build their own home as opposed to buying an established house.

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Affordability

Common problem buyers are finding when looking at an application is affordability. Remember, there is a buffer rate added to your actual interest rate for your application as part of responsible lending which is 3%. So that means that if you have a rate of 6.35%, it is assessed at 9.35% to make sure you could afford your loan if interest rates were to go up by 3%, so if you can afford your desire loan based on your actual rate, but not the assessment rate, lenders will be unable to assist.

This is why it is important to reach out to go through these checks to se where you stand in terms of affordability, and if needed, make a plan to get you where you want to be.

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What is a Pre-approval?

A pre-approval is where we go through all aspects of you as an applicant an decide on a budget (Purchase price, deposit, costs, etc) and submit an application subject to a contract of sale being obtained. This is very empowering if you are actively looking at the market as you will confidently know your budget, and it also makes you look much stronger as a buyer to the seller as they will know you have already done the work on your application, and you are now solely looking at properties with the bulk of your finance requirements completed.

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What’s going on with interest rates?

Since my last newsletter the Royal bank of Australia (RBA) have had four meetings, and in all four meetings the RBA decided to continue to hold the cash rate at 4.35% which makes eight holds this year, with one more meeting to take place in December.

Governor Michele Bullock’s comments regarding inflation:

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Are you feeling things getting tighter? Should you refinance?

I have seen a lot of refinance clients who have much higher rates than the average for loans with their Loan to Value Ratio (LVR). You may think that your rate will be adjusted according to the market, but sometimes your rate is on an old product or on an old discount margin which puts your rate higher than what it should be.

Remember it is worth reviewing your home loan every 12 months to ensure your loan is working for you and not against you, if you’d like assistance with this, reach out anytime.

I have also seen refinance clients who do not know the tips and tricks that can save you thousands on interest per year as well as reduce your loan term. For example, if you’re currently repaying your home loan monthly, consider changing it to fortnightly or weekly if you have the capacity.

Your interest is calculated daily and charged monthly, so if you repay your mortgage four times a month instead of one, this will ultimately save you on interest even though you are repaying the same amount. Doing this can reduce your loan term by a few years, as well as there being an extra week in March, May, August, and November to help pay it off even sooner.

Before I wrap up, I would like to thank you all for reading my newsletters this year. If you have found this information helpful, you will also find the benefit in liking my Business page on Facebook where I regularly post information on the market with some hints and tips.

If you or someone you know wants to have a yarn about anything home lending, reach out anytime.

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Regards,

Jimmydee (JD) Baker Spittles 0475 050 753 [email protected]

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Astute Financial Management Pty Ltd | ACN 093 587 010 | Australian Credit Licence 364253 ?| Cairns Wealth and Insurance Pty Ltd T/As Astute is a corporate authorised representative (377873) of Alliance Wealth Pty Ltd | ABN 93 161 647 007 | AFSL 499221 | centrepointalliance.com.au/AW.General Insurance provided by Astute GI Pty Ltd (ACN 641 609 341) as an authorised representative of Ausure Pty Ltd ABN 94 096 971 854 AFSL 238433. Health Insurance products are underwritten by St Luke’s Medical and Hospital Benefits Association ACN 009 479 618 (St.LukesHealth), a registered private health insurer, [trading as Astute Simplicity Health] and members are introduced by Astute Financial Management Pty Ltd or related entities (collectively known as Astute) for which Astute receives a commission

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