The supply chain shortages that have affected so many industries have hit property as well, with residential construction costs rising at the fastest annual rate since 2005.
Home building costs rose 7.3% in the 2021 calendar year, according to CoreLogic’s Cordell Construction Cost Index (CCCI).
That said, the pace of growth might be trending down, with costs rising 3.8% in the September quarter but only 1.1% in the December quarter.
Part of the reason costs are rising is because builders are struggling to get their hands on materials such as timber and metal products.
Property developers and home builders are likely to be passing on at least some of these increased costs to people buying homes.
First home buyers can now save their deposit even faster, after the First Home Super Saver Scheme savings threshold was increased from $30,000 to $50,000.
The scheme lets first home buyers salary-sacrifice pre-tax income into a dedicated account within their superannuation fund – up to $15,000 per year and now up to $50,000 in total.
There are two ways in which the First Home Super Saver Scheme benefits first home buyers.
First, the money they deposit into the scheme is taxed at 15% rather than the income tax rate, which is 19% for someone earning up to $45,000 and 32.5% for up to $120,000.
Second, when first home buyers eventually withdraw their money, they’re allowed to withdraw their original deposit plus about 4.7% interest, which is a higher rate of interest than they’d earn through a regular savings account. Withdrawals are generally taxed at the marginal tax rate minus 30 percentage points.
Home loan activity reached a record high in December, according to the latest data from the Australian Bureau of Statistics, in a sign the property market remains strong.
Australians committed to $32.8 billion of mortgages in December, which was 4.4% higher than the month before and 26.5% higher than the year before. The breakdown was:
One reason so many Australians are entering the market is because it's been booming over the past year.
Another is that despite speculation that interest rates might increase later this year, rates are at ultra-low levels and would still be very low even with a rate rise.
Today, celebrating International Women’s Day, with these wonderful, inspiring, supportive women, and a perfect opportunity to celebrate all that we do as not only mortgage brokers, but as friends, sisters, and mothers. 🧡
As a woman, running a business, leading from the front, today made me realise that I need more days like today.
What I think many might be surprised to know, is that of the many mortgage brokers I know, is that we are not in competition, there are many clients who value what we do, and in fact, we are often support and collaborate to ensure that not only we continue to grow and evolve as brokers, but also to ensure that we are all focussed on the success of our clients and support each other in our endeavours.
We are a community, and a fiercely proud, brave, and driven community of strong women at that.
Proud to be one of every day, but especially today on International Women’s Day. 🧡
Rachael Bland – Founder & CEO