Inner west homeowners set for financial windfall following reveal of Sydney Metro West stations

Many homeowners will benefit from the construction of the Sydney Metro West. Picture: AAP Image/Joel Carrett.

Property owners will be some of the biggest winners of the NSW Government’s plan to construct the Metro train network from the CBD to the western suburbs.

Experts say that while commuters will be able to travel to the CBD in less than 20 minutes, homeowners around the five proposed inner west stations stand to financially benefit off the back an increase in property values.

The flow on effect for the housing market in and around flagged sites in the Bays Precinct, Five Dock, Burwood North, North Strathfield and Sydney Olympic Park is set to be immediate, despite services not expected to begin until 2030.

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Supplied Sydney Metro West stations

Proposed stations of the Sydney Metro West line.

“We normally see a lift in pricing immediately after an announcement is made and people living near the train line will probably see a big lift in the value of their homes,” REA chief economist Nerida Conisbee said.

Belle Property — Strathfield principal Simon Furnari said the project will make the suburbs more desirable and popular with buyers.

“Suburbs like Five Dock that lack good public transport will get a look in from buyers who may not have considered the area before,” he said.

“They (buyers) will start looking to buy now in anticipation of the Metro West opening.”

CONSTRUCTION OF THE WESTERN SYDNEY METRO TO START NEXT YEAR

Metro West Door Knock

Five Dock will rapidly change as a result of the project. Picture: John Appleyard

Mr Furnari said buyers tempted to buy close to the stations should look to do so sooner than later to ensure they’re getting the best price.

“It is a great opportunity to buy now as there will be in great interest and an increase in price closer to completion,” he said.

With the exact locations of the proposed stations released, Ray White Commercial Western Sydney managing director Peter Vines expects developers to begin eyeing off available sites around them.

“We will probably see developers look to buy up land or property where they can in anticipation of the metro, as seen with the Bankstown to Sydenham line proposals,” he said.

Real Estate

No. 18 Garfield St in Five Dock will go to auction on November 2. It is located a street from where the proposed station will be built in Five Dock.

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No. 504/8 Burwood Rd has a $550,000 price guide and is right beside the site of the Burwood North station.

“Developers will always want to build where there are amenities and the metro offers just that.”

While 23 residential properties will be forcibly acquired under the plans, Mr Vines said he expects many homeowners will be savvy by joining forces with their neighbours to score a big property payday.

 

https://www.realestate.com.au/news/inner-west-homeowners-set-for-financial-windfall-following-reveal-of-sydney-metro-west-stations/

Government mortgage guarantee scheme aims to help first home buyers enter the property market

A Federal Government scheme to allow first home buyers to purchase a property with a deposit as little as 5 per cent will operate on a “first-in, best-dressed” basis.

Key points:

  • The Federal Government will offer loan guarantees for eligible buyers on low and middle incomes
  • The scheme is aimed at helping up to 10,000 first home buyers enter the market each year
  • The Government announced the scheme ahead of the Federal Election in May

Scheme’s property price caps:

State/territory Capital city and regional centres Rest of state
NSW $700,000 $450,000
VIC $600,000 $375,000
QLD $475,000 $400,000
WA $400,000 $300,000
SA $400,000 $250,000
TAS $400,000 $300,000
ACT $500,000
NT $375,000

The Government has today unveiled details of the scheme aimed at helping up to 10,000 first home buyers on low and middle incomes enter the market each year from January 2020.

Under the scheme announced ahead of the May election, the Government will offer loan guarantees for Sydney properties worth up to $700,000, and $450,000 across the rest of New South Wales.

In Melbourne, eligible buyers will be able to access the scheme when purchasing a home worth up to $600,000, and $375,000 across other parts of the state.

Price thresholds for capital cities will also apply to large regional centres with populations over 250,000, including the Gold Coast, Newcastle, Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong.

Speaking on Sky News, Finance Minister Mathias Cormann said price caps for eligible properties will take into account the median house price in capital cities and regional centres.

“The price caps are calibrated to take into account median house prices and conditions in respective markets and indeed they are set with reference to the threshold for concessional arrangements for stamp duty in various states,” Senator Cormann said.

“There is no specific number of guarantees per jurisdiction it will be on a … first-in, best-dressed basis.

“Ultimately the scheme will be driven by demand, up to 10,000 guarantees a year.”

The program will be open to singles with a taxable income up to $125,000 per year and couples earning less than $200,000 per year, and will apply to owner-occupied loans on a principal and interest basis.

“It’s really focused on helping first home buyers buy a modest first home,” Senator Cormann said.

According to analysis by CoreLogic, the median Sydney property value in September was $805,000 and $635,000 in Melbourne.

Housing Minister Michael Sukkar said only two of the big four banks will be chosen to take part in the scheme, with 50 per cent of all guarantees set aside for smaller lenders.

“A lot of the smaller banks and regional financial institutions I think, by their very nature, will ensure there is good coverage across the country,” he said.

Opposition Leader Anthony Albanese said time was running out for the Government to release crucial details.

“We still don’t know which lenders will be involved and what the interest rates will be, and this is a scheme that is supposed to begin in two months,” Mr Albanese said.

“The Government really needs to get on top of the detail so that people can benefit from it.”

Labor quickly promised to match the scheme when it was first unveiled by Prime Minister Scott Morrison during the election campaign.

Legislation passed parliament earlier this month with the Opposition’s support and an amendment for a review in 12 months.

https://www.abc.net.au/news/2019-10-27/government-unveils-details-of-first-home-buyers-scheme/11644018

Shop around to beat the banks’ ‘loyalty tax’

Your lender is relying on you feeling it’s too hard to move your mortgage. When you’re looking at more cost-effective options, look beyond the often-suggested packages to a more basic loan.

ed up with paying the “loyalty tax” and watching new mortgage customers get a better rate? It’s time to shop around and make the best of those new deals yourself – either to switch lenders or persuade your own lender to give you a more attractive loan.

A borrower with a $1 million loan package can reduce monthly principal and interest home repayments by nearly $370 a month, saving more than $130,000 in interest over the life of a typical 30-year mortgage.

Feel like it’s too hard to move lenders? Your mortgage is likely to cost you far more if you don’t shop around. Simon Letch

Even bigger savings are on offer to property investors and for borrowers who choose a no-frills mortgage, rather than a package that includes features ranging from credit cards to offset accounts.

But many borrowers shopping around for lower rates, more features and improved service are discovering that divorcing their existing lender can take a lot of time, money and hassle.

Gareth Handy and his wife Stephanie decided to replace ME Bank with ANZ as their loan provider when they moved from their apartment in St Kilda, about seven kilometres from Melbourne’s central business district, to a house in a nearby suburb. The birth of a son, Oliver, and expectation of more children triggered the move.

Handy’s decision to change lenders was partly motivated by finding a lower rate but more a reaction to problems with client service at ME Bank, particularly online banking.

“Banks get you on board and then do not do a great deal to retain you,” says Handy about his experience with ME Bank.

Handy’s experience is symptomatic of a problem seized upon by politicians and regulators who claim major banks are pocketing about $3 billion a year by charging higher rates to their existing customers than their new clients.

The  “loyalty tax” being paid by existing borrowers describes rates and fees creeping up the longer a client stays with a lender, according to Australian Competition and Consumer Commission chairman Rod Sims. Banks have denied the charge.

“Over the past few years lenders have been competing for new business by offering sharp interest rates,” says Steve Mickenbecker, group executive for Canstar, which compares fees and rates.

“They’ve been able to do this by holding rates for existing borrowers steady, which has left this group paying higher interest rates compared to new borrowers.”

Lenders recently came under fire for “profiteering” by not passing on the whole 25 basis point cut announced earlier this month by the Reserve Bank of Australia.

Handy, a manager in the automotive industry, was chasing a lower rate for his new home loan of $930,000 and $570,000 investment apartment but is more interested in improved service, particularly online banking.

Gareth and Stephanie Handy (pictured with son Oliver) have found it time-consuming and bureaucratic to move loans.  Eamon Gallagher

“It’s not just falling rates – for me, ME’s service was not great. We were always having to jump through  hoops to get anything done. It put us off,” he says.

“I was bitter about ME from the start. The service was slow, the online applications took an eternity to load and were not efficiently delivered.”

For example, he received a fine after the bank incorrectly calculated the monthly payment on the combined mortgages was 2¢ short.

But the planned move to ANZ highlights the time, expense and bureaucracy that can entangle even a comparatively simple process.

Handy has so far incurred expenses of a $350 discharge fee to ME Bank, $240 in state registry taxes and $395 in fees for the ANZ loan package.

The transfer, which was meant to be settled on Monday, has been put back a fortnight because one of the letters from his middle name was missing on the loan documents. That is likely to cost another $92 in lost interest payments. “It is completely unacceptable,” he says.

ME’s chief experience efficer Ingrid Purcell replies: “We’re always sorry to hear a customer is leaving. However, ME continues to invest in its digital experiences and overall customer satisfaction is very high, with recent Roy Morgan data showing ME in the top four for non-home-loan customers and top five for home loan customers. Historically, ME has a net gain in refinancers, particularly from the big four, as more customers realise they can get a better deal from mid-tier banks and a better customer experience.”

Cate Bakos, president of the Real Estate Buyers Agents Association of Australia, says borrowers can encourage existing lenders to “sharpen their pencil” and offer a more competitive rate.

“It’s like buying something from Bunnings Warehouse,” says Bakos about the retailer that promises to better any price offered by a competitor. “They want to keep your business and will often come back with a matching, or better, offer.”

For borrowers like the Handys, who want to change lender for a range of reasons, there is the option of a loan package  or a stand-alone loan.

The accompanying tables highlights the differences in rates charged to existing and new customers for loan packages from seven lenders. It assumes the existing customers started their loans three years ago.

CBA, ANZ and NAB have not offered bigger discounts to new borrowers for these products, but there may be discrepancies in rates for new borrowers across their other home loans.

Others, such as Suncorp Bank, have sliced nearly 180 basis points off the package rate for new borrowers compared to 115 basis points paid by existing borrowers. The saving for new borrowers is almost $400 a month.

The discounts are even bigger for the investment loans, with HSBC offering a 200 basis point discount (compared with 80 basis points for existing borrowers), meaning a saving of almost $700 a month or nearly $251,000 over the life of the loan.

There are also savings for borrowers ready to forfeit some of the features by opting for a “basic package”, which is also shown in another table.

Buyers ready to shop around non-banks, mutuals and co-ops are likely to find even cheaper rates, particularly special offers targeting first-time buyers, or those planning to switch.

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“Even basic loans usually allow extra repayments and redraw so that borrowers are not giving up too much and can still achieve a competitive interest rate,” says Mickenbecker.
Borrowers switching loans are also being offered low or no fees, cash to cover legal costs, air miles or home appliances.

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Chris Foster-Ramsay, a mortgage broker, says many smaller lenders make market-beating one-off special offers but are reluctant to renegotiate in later years when rates begin to creep up.

Big lenders are more likely to offer their package loan borrowers a better deal, he adds.

Borrowers considering a new loan face tougher credit scrutiny after the introduction of comprehensive credit reporting on October 1 that enables lenders to access more information from credit rating agencies.

Those with good overall credit could get a lower rate but others can be charged a premium or find it more difficult to obtain credit.

Mortgage brokers recommend those applying for a loan to regularly review their credit report, pay bills on time, pay the credit card off in full each month and consider consolidating debt.

They also recommend setting up a file that contains 12 months’ bank statements and three to six months’ payslips.

Finder, which monitors market rates and fees, warns against applying for loans with a variety of lenders. “Each time you apply for credit, an inquiry is made on your credit file. Too many inquiries can have a negative impact on your credit,” it says.

 

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https://www.afr.com/wealth/personal-finance/shop-around-to-beat-the-banks-loyalty-tax-20191010-p52zaw