Economists were predicting a 0.3 percent increase in home loans but total finances for housing for October went up by 2.2 percent to $20.901 billion. These numbers reflect the status of the housing market before the Reserve Bank of Australia increased the official cash rate from 4.5 to 4.75 percent after six months of non- movement.

In the mean time, economists predict that the official cash rate will not move for a while but upward inflationary pressure due to a stronger economy can push up the cash rate again. The figures for October are decent but it does not factor the latest RBA cash rate increase yet and it is more interesting to see the figures for November.

Nonetheless, October’s figures are a little above expected though first home buyers only comprise of 15 percent of the total home loans and it impossible that this percentage will rise given that the First Home Buyers Grant has ended and interest rates have increased. Thus, it is expected that investors will take advantage of the market’s situation.

Figures for October were better than expected but the increase reflects stronger conditions in the labour market as well and the October figures is a positive sign before the cash rate increase kicked in.

The Housing Industry Association said that during the third quarter of 2010, housing prices increased by 3.6 percent. Current rates are 18.3 percent lower than last year’s rates, Melbourne overtook Sydney due to increased costs of borrowing and higher property prices.

The increase of property prices in Melbourne and lower average income of Melbourne workers also contributed in making Melbourne the least affordable major city property-wise. He added that the three cash rate hikes in the early part of 2010 took its toll on housing affordability. Thus, the housing outlook in the short-term is bleak although the third quarter of 2010 gave some relief.

Among all major Australian cities, Adelaide had the best housing affordability improvement with 6.3 percent. Following Adelaide are Perth and Brisbane with improvements of 5.9 percent and 5.4 percent respectively. Meanwhile, Sydney, Melbourne and Hobart improved by 1.9 percent, 1.7 percent and 1.2 percent respectively.

However, housing affordability in Canberra decreased by 8.6 percent. Area-wise, housing affordability significantly improved in Tasmania, Queensland and Western Australia. South Australia and New South Wales showed decent improvement while housing affordability in Victoria went down. Also, this housing affordability index does not include the latest RBA official cash rate increase to 4.75 percent.

Despite the official cash rate hike and the interest rate increases of variable mortgages by the big commercial banks, report show that households are still paying mortgages without struggling.

From early 2009 until early 2010, a high influx of property buyers prompted a 22-percent increase in Melbourne house prices. However, the market cooled down due to slowing price growth and falling clearance rates at property auctions. While owner-occupiers are hesitant to buy new properties, investors are on the move.

Years ago, investors had a different mindset, they would try to get beachfront or inner-city properties for strong capital growth, high demand or accessibility to amenities and public transportation. However, the times have changed and houses in inner-city or beachfront areas are worth at least $1 million and it can give slow to negative income returns.

Properties in northern and western Melbourne are more affordable and have better profit potential than the properties in the eastern and southern part of the city.

Up to the third quarter of the year, these suburbs gained capital growth from 16 to 21 percent while the overall average capital growth of all Melbourne properties is 13 percent. Since inner-city properties have become unaffordable, more households are seeking properties in these working-class suburbs.

It is important then when seeking an investment property that you do your research and determine where and what type of properties will give you the best returns. When you have decided on the right investment property find the right home loan is the next step.

Figures show that two-thirds of first home buyers are pooling their finances while three-fourths of the tenants in Sydney do not have enough finances to purchase their own home. Therefore, people are having a hard time entering the property market. A recent report shows that property owners in Sydney pay 5.6 percent more than the listed price and 4.2 percent higher for rental units.

In a recent survey found that 27 percent of New South Wales respondents are forced to rent due to lower rental rates and increasing home loan expenses. In the same survey which had 1000 respondents, 40 percent chose to rent to be able to save for the deposit of a new home.

Mortgages make home buying a tough endeavour due to the process and expenses that they have to deal with in purchasing a property. That is why it is so important that you have the right loan and do sufficient research to find the best loan for you.

Now that the holidays, the election and the grand finals are done, property sellers are once again busy getting their homes ready for sale. The competition in the market is not as tight though for property prices in the major cities have either decreased, remained the same or increased only minimally.

There is a possibility that the official cash rate that is maintained by the Reserve Bank of Australia will go up by as much as 5.75 to 6 percent by next year. This news is not welcome to those who have 25-year home loans for it will cause an increase in their monthly repayments. Households have no choice but to tighten their spending once the interest rate hike is official.

Speculations are brewing that the Australian property market is in a bubble. However, the growing economy and decreasing unemployment is keeping the market away from worse conditions. If you would still like to buy a property, it is important that you keep an eye on interest rates and ensure you know how much you can borrow.

Architects can establish if the property can be renovated according to the desires of the buyer or if the renovations projects will have costs that equate to buying a new property. If you can renovate, make sure that the proper renovation project takes place or problems on the property may start to compound.

It is important that you question the real estate agent and the valuers about potential renovation projects before buying the property. Asking them eliminates the possibility of either overcapitalising or undercapitalising.

Some property owners think that do-it-yourself renovation projects will save them money. However, this is only true if you know how to get the job done. If it is not done properly do-it-yourself renovations can add to the properties problems. If you are not an experienced renovator, it is best that you hire a professional that can get the job done the right way.

Delicate jobs such as plumbing and electrical connections must be done by an expert. If not, these can create more problems and additional renovation expenses. You must also refrain from overspending on fixtures, fittings and furniture if you intend to sell the property eventually.

Experts suggest that middle-priced furniture and fixtures must be purchased so that you can still devote your finances to other renovation projects. If you would like to alter the composition of your house just like creating a two-bedroom apartment from a one-bedroom property, you must seek the advice of a valuer first to check if the renovation will satisfy your objective.

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Although investor activity went up despite the scrapping of the First Home Buyer Grant in 2009, the volume of first home buyers went down by 50 percent in the early part of 2010. This brought a stalemate in property price growth. However, they are aware that residential property markets, especially the demand for new properties, have bounced back.

The resurgence of new home buyers is vital in the construction of new properties , property demand will rise gradually. There are forecasts of a four-percent increase in national residential property construction and the majority of it will come in the form of the medium or high-density projects in New South Wales.  Property construction is NSW is coming from a low standpoint. In 2008-2009, only 23,688 new homes were built and it matches the lowest levels since 1953.

In the present year, property construction increased by an average of 34 percent to 31,750. In the state of Victoria, the level of construction last year was above the projected demand level because of the mild effects that the state incurred in the economic downturn of 2008. Also, most of the property growth in the state is within its regional areas.

Property construction in Victoria went up by 27 percent over the past year to 53,350. This is Victoria’s highest rate of property construction ever. Also, the stable interest rates since May 2010 are likely to stay put until March 2011. However, the standard variable rate may increase to 7.8 percent by the end of next year.

Due to the tight rental market conditions, profit surpassing property prices is most likely to happen. For the next three years, rental growth is seen within the six to eight percent per annum increase. At present, the major cities of Sydney, Canberra, Melbourne and Adelaide have vacancy rates of lower than 1.5 percent.

If you are looking at investing in a new home or looking to compare home loans contact Comparing Home Loans today.

Home improvement loans are ideal for growing families. More space is often what is needed, much of the time an additional bedroom or two, and additional bathroom or other add ons like a swimming pool all of which are more cost effective than buying a new property much of the time.

As well as being cheaper than purchasing a new property, renovating can also help improve the property’s equity and overall value.

There are a few different home improvement loans which include the construction loan, equity loan, construction loan, and redraw facility. It is important that you compare loans to find which one will suit you best. With a construction loan repayments are devided into stages. Instead of paying the entire loan amount when you take out the loan, seperate amounts will be added as different stages of construction are complete.

The redraw facility gives the borrower access to funds that they need for renovations or construction. The funds that can be redrawn will depend on extra repayments. Therefore, this deal encourages borrowers to make extra repayments so that they can withdraw funds if they need to. Extra repayments will also cut down on the interest rates of the loan.

A line of credit home loan makes use of a credit that the borrower acquired beginning with their first mortgage repayment for the property. A line of credit home loan can be compared to a credit card, it allows the borrower to withdraw funds within a fixed limit to be used towards whatever they wish including home renovations.

The home improvement loan that will suit the borrower will have a lot to do with their financial standing and their property’s equity amount. To help you determine which home improvement loan will work best for you, consult a mortgage broker.

In times of fluctuating market figures, split home loans gives you a sense of security especially if price hikes are likely to occur. It is important to compare home loans to ensure you are getting the best possible deal in botyh fixed and variable. With a split home loan, borrowers are not susceptible to higher rates while their loan is at a low variable interest rate.

A split loan will work to the borrower’s advantage if they use it for residential or commercial property investments. Split rate borrowers usually have a 50/50 split to equally savor the benefits of the variable and fixed home loans.

As a portion of the loan is of the fixed nature, you can be charged with penalties if you make extra repayments in hopes of speeding up the repayment process. You must also pay for set-up fees, discharge fees and account fees for the variable and fixed part of the split loan. Also, the monthly repayment can change due to the variable loan portion.

With the split home loan, you are safe against interest rate hikes as part of the loan is under the fixed interest set-up. You can also have occasional repayment drops due to the variable part of the split loan. Additional payments are also permitted on the variable term of the split loan.

On the other hand, the Lenders Mortgage Insurance protects the home loan lender or provider if the borrower cannot pay the mortgage anymore. This insurance makes sure that the lender or the bank will not lose any money when that happens. Lender’s Mortgage Insurance is often required if the borrower will request for more than 80% of the property value or if the borrower takes a low document home loan.

The global financial crisis that has brought more scrutiny amongst insurance companies.Nowadays, the mortgage insurance company will review the profile of the applying party for up to four to five days. If they require additional information, the reviewing process would take another four to five days. This is to make sure that the insurance company doesn’t make a bad investment.