Australia’s property prices are continuing to skyrocket, however our big banks are determined not to let that stop people buying homes and have rolled out their best ever mortgage rates. The Commonwealth Bank recently dropped its 5-year fixed rate to below 5 per cent, meaning the monthly repayments on a $400,000 mortgage have been reduced by $166 a month.
This record low rate led Westpac and the National Australia Bank to slash their repayments within an hour of the change. NAB’s head of retail banking Gavin Slater told the Sydney Morning Herald he had seen an increased demand for fixed-rate products over the past year.
Price growth in almost all capital cities in the three months to June has helped the median Australian house price soar almost 11 per cent in just 12 months and June quarter figures highlighted that these markets are showing no signs of slowing down.
According to the latest report from Australian Property Monitors (APM), Sydney is leading the surge, where the median house price climbed by more than $100,000 in the year to June, or 17 per cent, to hit a record $812,000. Melbourne recorded 10 per cent growth to $608,000. Canberra was the only capital city not to have an increase in house prices in 2013/14, dropping by 0.5 per cent to a median price of $576,000. APM senior economist Dr Andrew Wilson said “Most capital cities are maintaining or exceeding the solid to strong prices growth levels recorded during the previous quarter.”
Thousands more homes are due to be built to meet the growing demand from an increasing population. Construction forecaster BIS Shrapnel said that activity will reach a new high in terms of homes constructed, and more of those new homes will continue to be in apartment towers. In its latest housing outlook, BIS associate director Dr Kim Hawtrey said “New housing figures are forecast to reach 190,000 nationwide in 2014/15, which will surpass the previous peak of around 187,000 experienced back in the 1994 boom.”
