Some good news this week with the unemployment rate unexpectedly falling to 6.8 per cent in Australia from 7.5 per cent the previous month. The number of people in employment increased 111,000 as restrictions were unwinding across the country. In Victoria, unemployment rose to 7.1% from 6.8% which is below the highest point in June at 7.5%.
With COVID-19 cases declining rapidly in Melbourne, it may be possible that the hard lockdown may be eased earlier than the October 26 expected date. Feedback from many selling agents that many vendors are still being non-committal about selling, however, I suspect as the case numbers keep declining in Melbourne, that vendors will start to gain some confidence to list their property for sale. There is no doubt buyers keen to buy and opportunistic investors are circling. I am predicting it will be a very active Spring/Summer season.
I have requested Chris Devlin from Quora Financial provide some interesting statistics in relation to mortgages.
Have a great week.
Australian lenders are open for business and doing as much as they can to attract new business through low interest rates and onboarding incentives.
Despite the obvious headwind, the Victorian market remains remarkably buoyant with Leading Aggregator, Connective, reporting $3.3 billion in Purchase Approvals and $3.7 billion refinance approvals so far in 2020 from their 20% market share. Further, in the 6 months ending August 2020, Victoria accounted for almost half of Westpac’s 3000 national credit approvals. Almost 70% of all borrowers nationally are taking advantage of the record low fixed rates on offer.
Unfortunately, industries such as hospitality, travel and tourism understandably find it difficult to convince lenders that credit is a good idea right now. Lenders are also assessing credit applications more closely than they were pre-COVID 19. For example, before COVID-19, lenders would generally assume novated lease payments paid through salary deductions were paid on time and correctly. Now, they will ask for a statement. They won’t make assumptions. Application turnaround times are taking a few days longer as a result.
So, is the extra information and time taken to obtain credit worth the effort? The low cost of finance makes it an attractive time to buy. For those looking to review their finance, the difference between the interest rates offered today and even recent legacy interest rates are significant. Customers are saving thousands per year, so I’d say that is a resounding yes!
Chris Devlin – Quora Financial www.quorafinancial.com.au
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