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AU Mortgage rates are expected to hit record lows within the next year

Property Here - Sunday, June 02, 2013

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Housing Boom

Melissa and Andrew Mileto with their kids Marcus, Charlie, Sebastian and Nadia at home at The Ponds. Picture: Craig Greenhill Source: The Sunday Telegraph

THE lowest mortgage rates in almost half a century will deliver homeowners an average saving of about $140 on their monthly repayments and they are being tipped to fall within 12 months as the mining slowdown starts to bite.

The Reserve Bank is expected to keep interest rates on hold on Tuesday at 2.75 per cent but a record low of 2 per cent is being forecast by some economists for mid next year.

Such a sharp fall, if passed on by the banks in full, would deliver an average standard variable rate of 5.41 per cent - the lowest level since 1968.

This would cut the average monthly mortgage repayment on a $300,000 loan from the current level of $1749 to $1609 per month.

The most recent low during the global financial crisis was May-June 2009 when the SVR dropped to 5.75 per cent.

In some suburbs it is actually cheaper to buy than rent - find out where

Westpac chief economist Bill Evans yesterday tipped no follow-up move from the RBA this week after the decision in May to cut by 0.25 per cent but believes that the deteriorating outlook will force the central bank to cut again in August.

This will be followed by more cuts in last few months of this year and another in early 2014 will bring the official cash rate to a record low of 2 per cent by March next year, he said.

The prospect of lower standard variable rates has also seen the big banks slash their one to five-year rates in recent weeks as they move much more aggressively into the fixed home loan market.

One of the country's biggest mortgage brokers AFG said demand for fixed loans, particularly for a three-year period, has more than doubled in the past four months to historic highs.

"It has risen from about 12-14 per cent of loans we write to around 30 per cent," AFG managing director Brett McKeon said.

The company processed a record $3.2 billion in home loans during April up 40 per cent on the same month last year.

It was the largest monthly total recorded by the company and compares with just $2.2 billion in April last year.

Mr McKeon said the recent round of official interest rate cuts has seen buyers shy away from fixed home loans as they did not want to miss out on future cuts.

But he believes the current fixed rate offerings won't fall too much further even if official interest rates drop to 2 per cent.

Financial comparison website RateCity spokeswoman Michelle Hutchison said that while there are great deals available at the moment buyers should shop around with even 2-year fixed rate offering varying considerable from a low of 4.79 per cent to a high of 6.09 per cent.

"Fixed home loan rates are still falling and many are lower than variable rates, which is great news for borrowers who are considering fixing their home loan," she said.

"But this could be a sign that variable rates will follow with more rate cuts this year. Nevertheless, it's still a good time to consider fixing your home loan if you're concerned about rising interest rates in the next few years. But there is still a big difference between the lowest and highest rates available so make sure you compare home loan rates to ensure your fixed rate is worthwhile."

Selling homes can  be high drama

Famous Real Estate Agents

Famous Real Estate Agents

Actor Marty Lynes is currently on Home and Away, spent 7 years on All Saints and a few other shows and movies. He is a full time real estate agent and auctioneer for LJ Hooker Terrigal. Picture: Driver Liam Source: The Sunday Telegraph

MARTY Lynes plays bad boy Adam Sharpe on Home And Away but in real life he's a real estate agent and auctioneer at LJ Hooker Terrigal.

"I was amazed when I started back in 2003,'' he said. "I came out of seven years on All Saints, a top-rating show, and found that the egos in real estate were far bigger than in TV.''

Acting now takes a back seat for the dedicated agent.

"If I had your house listed and going to auction in two weeks, and an acting job came up in that time, I'd say no,'' he said. "I've worked very hard to show clients that I'm 100 per cent committed to them.''



Martin Lynes with co-stars Georgie Parker and Judith McGrath on the set of All Saints. Source: Supplied

In a career that's all about building rapport, a public profile can be a blessing - but also a hindrance.

"Even though we shot Home And Away around Christmas time, it's only airing now,'' Mr Lynes said. "People think if you're on air today, you're not around to sell their property.

"I know that other agents use that against me too, they tell people I'm a part time agent, which isn't true.''

Mr Lynes hopes his current mean onscreen persona doesn't rub any potential clients the wrong way.

"Some people don't differentiate between the real world and TV land,'' he said. "When I was on All Saints, my character's girlfriend was very popular. I used to get old ladies at supermarkets having a go at me, telling me I'd better treat her right.''

Now, his most dramatic role is that of auctioneer. "The first time I called an auction was actually the most nervous I've ever been. It's high drama.

"People's homes are their biggest asset and you want to go well.''

Real estate has also become a second career for numerous athletes.

"Real estate is very competitive, like sport,'' said former Manly and Roosters rugby league star Jack Elsegood, now principal of Domain Residential.

"The difference is that there's a lot more honesty in sport.''

Mr Elsegood's sporting profile has proved helpful around the northern Beaches, where his clients have included current footballers Jamie Lyon and Brent Kite.

"Honesty is something I've brought with me and I've found people respect that.''

"Agents can be hard people to trust,'' he said.

"If people see a face they recognise, they're far more receptive.''

It's the same for 1998 Commonwealth Games cycling bronze medallist Josh Kersten, now at Raine and Horne Wollongong.

"It's hard to establish a name in real estate, but the sporting back

Families driving a new housing boom

Housing Boom

Housing Boom

Melissa and Andrew Mileto with their kids Marcus, Charlie, Sebastian and Nadia at home at The Ponds. Picture: Craig Greenhill Source: The Sunday Telegraph

FAMILIES are driving a construction boom across Sydney, with nearly 80 per cent more new homes and units built in the first quarter of this year than last year.

Faster approvals by councils, new land releases and low interest rates are behind the trend, with urban areas topping the list of new developments.

A NSW Planning and Infrastructure report shows there were more homes built in the nine months to March, with 16,526 completed, than the entire previous financial year when 15,591 new homes were built. In the March quarter, there were 5420 new homes, up 76 per cent on last year.

Planning and Infrastructure Minister Brad Hazzard said the Metropolitan Development Program monthly monitor report figures were a sign of growing confidence in the Sydney housing market.

He put it down to state government policies such as accelerating the delivery of new council-wide local environmental plans, which set aside new areas for housing.

"While more work needs to be done to improve housing affordability, it is pleasing that new home completions are increasing at a greater rate than approvals,'' Mr Hazzard said.

The construction boom is set to continue, with home approvals reaching a new high, rising 19 per cent from last year to 20,980, the highest since 2004-05.

The City of Sydney topped the list with 2233 approvals, followed by Blacktown City Council with 1696 and Parramatta City Council with 1287.

October last year had the biggest number of new homes approved, with 3111 given the greenlight by councils - almost 1000 more than the same month in the previous year.

The biggest construction activity occurred in the lead-up to March this year, when 3238 new homes were completed.

Across Sydney, Mosman has been almost development-free with just three new dwellings completed this year.

Housing Industry Association chief economist Harley Dale said Sydney still had a long way to go.

"Sydney has been underperforming for about a decade, but it has started moving in the right direction,'' he said.

"We've had low interest rates, some policy measures such as a faster approval process and some movement on land releases that had helped accelerate construction, but we still have a long way to go.

"NSW completes less than 30,000 homes a year, an ideal setting would be for the state to complete 44,000 to 45,000 a year,'' he said.

The construction boom in Sydney is at odds with an overall decline in new home building activity nationally.

Australian Bureau of Statistics figures released last week also showed a significant decline in renovation activity.

Not all renovations add value

Melissa and Andrew Mileto, a self-employed carpenter, chose to build their own home in The Ponds estate, in Sydney's northwest, after being unable to find an existing property that met their needs.

They wanted four bedrooms to accommodate their four children and a double garage.

Mrs Mileto, a registered nurse, said she saved around $80,000 in building their home compared with buying a similar existing property.

"I was surprised actually, but it turned out to be cheaper to build,'' Mrs Mileto said. "We also chose to build and move into a new estate to be in a family-oriented area.''

ground helps get the foot in the door,'' he said.

Now in real estate for eight years, he has made the transition from "the cyclist who became an agent'' to a successful agent in his own right.

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