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What’s better: Fixed rate or variable rate home loan?

By ACTResident 22 July 2015 65

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I am going to borrow home loan from the bank and have three options: fixed rate, variable rate and half and half.

Would you please advise here what option I should take. You are welcome to comment on ‘owner occupier’ or ‘investment’, and three different options because your comment may benefit others even if it does not directly apply to my situation.

My idea is to fix the rate as I see the interest is very low now, but who knows it might go further down. I do believe we have economists out there.

Thank you for your comments and sharing ideas.


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What’s better: Fixed rate or variable rate home loan?
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arescarti42 12:49 pm 17 Aug 15

Ezy said :

Sleeping in? Nah, it was after midday.

I had another agent with me at the auction who we have crossed paths many times before, we had a chat before hand and I told him I think it would go for around 520-525k. He agreed – it looked like it wasn’t actually going to even get over the 520 at one stage.

Yep, another very strong result with prices in Weston Creek rising rapidly in recent weeks due to the Mr Fluffy saga.

In a few months time this block will be rezoned, the house knocked down, and a block of apartments erected and sold to rich Chinese investors. The apartments will cause the surrounding houses to go up in value, which will make the apartments go up even more in value.

Yep, if you want to live in this area, you should get in quick because prices are on the up!

Ezy 9:01 am 17 Aug 15

Sleeping in? Nah, it was after midday.

I had another agent with me at the auction who we have crossed paths many times before, we had a chat before hand and I told him I think it would go for around 520-525k. He agreed – it looked like it wasn’t actually going to even get over the 520 at one stage.

blandone 8:17 am 17 Aug 15

Ezy said :

vintage123 said :

Ezy said :

vintage123 said :

Ezy said :

vintage123 said :

Ezy said :

Yup – exactly what I thought. Thats a very generous price.

Unfortunatley it will go between 625k and 650k. They would probably accept a pre auction offer of 650k.

The reason the prices have risen quickly in weston creek is due to the fluffy saga.

To be blunt, there has been considerable lobbying occurring behind the scenes regarding the rezoning of the fluffy blocks, and the precedence this sets for the unaffected blocks in the same streets and suburbs.

Developers have basically lobbied to say, we won’t touch them unless you allow unrestricted rezoning of the whole suburb, and green light seperate title subdivisions on 700m2 blocks.

So more than likely, once the governments works out that they will cash in considerably under a comple rezoning arrangement, the decision will be made to allow anyone to subdivide as long as the block is over 700m2, and they will be able to apply seperate title.

Therefore, anywhere near a cluster or in the general suburb currently on the market over 700m2 is considered desirable for those wishing to land bank or develop in the future.

Like I have said before, if you want to live in the area, grab something sooner rather than later, as prices are on the up.

Interesting, and thank you for the explanation – but given the information you are getting, the only people that would see this as a 650k block are those developer types. General Joe Public (me) look at this as and compare it to a similar house that sold in this street a few months back for 505k. To be honest, I haven’t seen many houses jump in value significantly over the last few weeks. If anything, they are the same as a few months ago.

The problem for me at this stage is lack of homes that offers good bang for buck renovation/extension potential. This particular home for me isn’t one I am interested in due to the way the house is skewed on the block. I have already sketched out a few extension ideas and what I had in mind wouldn’t be achievable due the building encroaching 1.5 metres from the boundary.

http://www.realestate.com.au/property-house-act-weston-120042137

Thats a different kettle of fish all together though – That house sold for 599k two years ago. The reason it fetched that 625k is because it was in an elevated position in Weston and on a nicer street. These houses always fetch a higher price than those down a few streets like the one we are discussing.

More recently, two houses sold on Sturges street. One for 440k! It was back in May and before some more information was released RE: Mr Fluffy, but I am seeing this from someone who is not too privy to what developers are doing behind the scenes.
http://www.realestate.com.au/property-house-act-weston-119620311
http://www.ozpropertyview.com/property-view/ACT/1386663844/9-Sturgess-Place-ACT/

My opinion – this house will go for around the 530 mark. Happy to eat my words, and have an ‘I told you so’ written to me, but I am just going on what I have learned in the 8 months of looking for property in this area. If it goes for the price you are saying, kudos to you – and ‘holy shit I better get my ass into gear’ to me.

Ezy, mate if you can get it for 530k then grab it. Dont overthink extensions or renovations, at the end of the day the land size in Weston will ultimately determine the value of homes. The other thing is if you buy one and overcapitalise through extensions or renos, your just throwing money away.

The only way i have seen people make money on renos, is if they are tradies, or they have family that are, or they convert a garage to a room etc. If you have to apply to council and get the tradies in, the cost are likely to be so high, that you may have well spent more initially purchasing a bigger house.

I would grab it at 530k if possible, do nothing to it, just live in it and set your loan up as i pointed out at point one, build some equity, noting your equity will come from the loan structure plus capital growth.

Just letting you know that I attended the auction for this home today. It went for 522k. Pretty much around what I was thinking.

Keen to hear from Vintage 123 on this one, the developers must have slept in on Saturday

trudi 6:01 pm 15 Aug 15

Only go for a fixed rate if you are concerned that interest rates will rise in the near future, otherwise, go variable. At the most, if you are nervous, lock in about 1/2 of the loan.

The drawback with fixed interest loans is that you are limited to how much you can reduce the loan amount by. So by going 50/50, you have the opportunity to pay the minimum amount on your fixed rate portion and extra in your variable portion.

Better still, attach an Offset account to your variable loan, provided the savings amount is fully offset against the loan, ie the virtual interest rate on your offset account matches the real interest rate of your loan.

Ezy 3:22 pm 15 Aug 15

vintage123 said :

Ezy said :

vintage123 said :

Ezy said :

vintage123 said :

Ezy said :

Yup – exactly what I thought. Thats a very generous price.

Unfortunatley it will go between 625k and 650k. They would probably accept a pre auction offer of 650k.

The reason the prices have risen quickly in weston creek is due to the fluffy saga.

To be blunt, there has been considerable lobbying occurring behind the scenes regarding the rezoning of the fluffy blocks, and the precedence this sets for the unaffected blocks in the same streets and suburbs.

Developers have basically lobbied to say, we won’t touch them unless you allow unrestricted rezoning of the whole suburb, and green light seperate title subdivisions on 700m2 blocks.

So more than likely, once the governments works out that they will cash in considerably under a comple rezoning arrangement, the decision will be made to allow anyone to subdivide as long as the block is over 700m2, and they will be able to apply seperate title.

Therefore, anywhere near a cluster or in the general suburb currently on the market over 700m2 is considered desirable for those wishing to land bank or develop in the future.

Like I have said before, if you want to live in the area, grab something sooner rather than later, as prices are on the up.

Interesting, and thank you for the explanation – but given the information you are getting, the only people that would see this as a 650k block are those developer types. General Joe Public (me) look at this as and compare it to a similar house that sold in this street a few months back for 505k. To be honest, I haven’t seen many houses jump in value significantly over the last few weeks. If anything, they are the same as a few months ago.

The problem for me at this stage is lack of homes that offers good bang for buck renovation/extension potential. This particular home for me isn’t one I am interested in due to the way the house is skewed on the block. I have already sketched out a few extension ideas and what I had in mind wouldn’t be achievable due the building encroaching 1.5 metres from the boundary.

http://www.realestate.com.au/property-house-act-weston-120042137

Thats a different kettle of fish all together though – That house sold for 599k two years ago. The reason it fetched that 625k is because it was in an elevated position in Weston and on a nicer street. These houses always fetch a higher price than those down a few streets like the one we are discussing.

More recently, two houses sold on Sturges street. One for 440k! It was back in May and before some more information was released RE: Mr Fluffy, but I am seeing this from someone who is not too privy to what developers are doing behind the scenes.
http://www.realestate.com.au/property-house-act-weston-119620311
http://www.ozpropertyview.com/property-view/ACT/1386663844/9-Sturgess-Place-ACT/

My opinion – this house will go for around the 530 mark. Happy to eat my words, and have an ‘I told you so’ written to me, but I am just going on what I have learned in the 8 months of looking for property in this area. If it goes for the price you are saying, kudos to you – and ‘holy shit I better get my ass into gear’ to me.

Ezy, mate if you can get it for 530k then grab it. Dont overthink extensions or renovations, at the end of the day the land size in Weston will ultimately determine the value of homes. The other thing is if you buy one and overcapitalise through extensions or renos, your just throwing money away.

The only way i have seen people make money on renos, is if they are tradies, or they have family that are, or they convert a garage to a room etc. If you have to apply to council and get the tradies in, the cost are likely to be so high, that you may have well spent more initially purchasing a bigger house.

I would grab it at 530k if possible, do nothing to it, just live in it and set your loan up as i pointed out at point one, build some equity, noting your equity will come from the loan structure plus capital growth.

Just letting you know that I attended the auction for this home today. It went for 522k. Pretty much around what I was thinking.

vintage123 9:55 pm 27 Jul 15

chewy14 said :

vintage123 said :

arescarti42 said :

chewy14 said :

Really?

I think your suggestion doesn’t have a snowball in hell’s chance of getting through.

If they allow subdivision of all blocks down to 700m2, they might as well throw away the territory plan altogether. How could they possibly meet their other planning requirements in these older areas if they make such a wholesale change?

There’s absolutely no chance of this happening.

The Government has been very clear that allowing the Mr Fluffy affected blocks to be subdivided was a one-off to help them fund the buy back scheme.

There’s been plenty of community opposition around the negative impact subdividing just the few Mr. Fluffy blocks would have. No way is the ACT Government going to set itself up for massive community backlash just because a few developers want them to change the rules.

Many of these old suburban areas don’t have the infrastructure capability (e.g. sewers, power networks, roads, telecoms etc.) to support a another house on every second block without massive expenditure on upgrades anyway.

Happy to wager.

Here’s the public info
http://www.canberratimes.com.au/act-news/inquiry-gives-canberrans-another-chance-to-debate-the-return-of-fluffy-dual-occupancy-20150723-giefph.html

Maybe read through it in slow time.

For me, you’re basically betting on the Liberals winning the next election for this to have any chance of getting through and even then it would still be slim.

If Labor wins, the chances are zero for the forseeable future due to their infill policy being aimed around the main transport corridors (and the tram). These types of sub-divisions and dual occupancies would be eating at the demand for their infill and that wouldn’t be politically or financially beneficial for them or the territory.

Look at the other thread on here talking about the redevelopments around Dickson and the resident’s reaction to those sorts of developments that aren’t even in the suburban residential areas and streets.

You talk about 150 developers wanting this? Well think of all the residents and thousands of votes that would be angrily and vocally against. The default position for politicians will always be to protect their own jobs.

Anyway, only time will tell what happens.

But if the rezoning results in their blocks Tripling in value, why would they be angry at the government.

vintage123 9:51 pm 27 Jul 15

dungfungus said :

vintage123 said :

dungfungus said :

Cracks now appearing in Chinese economy and our dollar is rapidly falling.
Two Australian banks have now increased mortgage investment rates .27% to address overweighting of their exposure in that ledger.
Prices for all commodities (including gold) are falling at a time when production inventories are not being cleared.
I wonder how many Australian mortgages will be under water by this Christmas.
Ah well, all is good on planet Canberra; lots of new cafes to review and the real estate industry confirms house prices here are rising again so nothing to worry about.

Dunga, china just recorded an annual growth of 7%. So with all things considered 7% growth during tough times is excellent. Cant see anything bad happening in the china market. Infact they have a target of 17 trillion to invest this year in overseas markets. Yeah their sharemarket recently fell 30%, but it did rise by 150% in the six months prior, so they are still 120% up on the deal. China is doing quite well if you ask me. 560 million middle class chinese millionaires have a considerable buying power. Its only up and up for china. Indias middle class is doing pretty good too, so i wouldnt be surprised to see some competition between the two countries for international investments.

China reported a recorded 7% growth – a lot of commentators are saying it is impossible to verify these figures.
The recent share market correction was stopped by the government there buying into the market and “nationalising” it for a short period. How sustainable is a 120% annual rise in a share market, anywhere?
The 17 trillion that China is reported to be investing globally may have trouble finding a home too.
Any thoughts on how Australia is going to repay the half a trillion dollars we owe them already?

Small Caps up 17% this week.
http://www.smh.com.au/business/markets/new-visa-rules-would-push-wealthy-chinese-migrants-into-smallcap-stocks-20150616-ghpr5n.html

chewy14 10:06 am 27 Jul 15

vintage123 said :

arescarti42 said :

chewy14 said :

Really?

I think your suggestion doesn’t have a snowball in hell’s chance of getting through.

If they allow subdivision of all blocks down to 700m2, they might as well throw away the territory plan altogether. How could they possibly meet their other planning requirements in these older areas if they make such a wholesale change?

There’s absolutely no chance of this happening.

The Government has been very clear that allowing the Mr Fluffy affected blocks to be subdivided was a one-off to help them fund the buy back scheme.

There’s been plenty of community opposition around the negative impact subdividing just the few Mr. Fluffy blocks would have. No way is the ACT Government going to set itself up for massive community backlash just because a few developers want them to change the rules.

Many of these old suburban areas don’t have the infrastructure capability (e.g. sewers, power networks, roads, telecoms etc.) to support a another house on every second block without massive expenditure on upgrades anyway.

Happy to wager.

Here’s the public info
http://www.canberratimes.com.au/act-news/inquiry-gives-canberrans-another-chance-to-debate-the-return-of-fluffy-dual-occupancy-20150723-giefph.html

Maybe read through it in slow time.

For me, you’re basically betting on the Liberals winning the next election for this to have any chance of getting through and even then it would still be slim.

If Labor wins, the chances are zero for the forseeable future due to their infill policy being aimed around the main transport corridors (and the tram). These types of sub-divisions and dual occupancies would be eating at the demand for their infill and that wouldn’t be politically or financially beneficial for them or the territory.

Look at the other thread on here talking about the redevelopments around Dickson and the resident’s reaction to those sorts of developments that aren’t even in the suburban residential areas and streets.

You talk about 150 developers wanting this? Well think of all the residents and thousands of votes that would be angrily and vocally against. The default position for politicians will always be to protect their own jobs.

Anyway, only time will tell what happens.

dungfungus 10:03 am 27 Jul 15

dungfungus said :

vintage123 said :

dungfungus said :

Cracks now appearing in Chinese economy and our dollar is rapidly falling.
Two Australian banks have now increased mortgage investment rates .27% to address overweighting of their exposure in that ledger.
Prices for all commodities (including gold) are falling at a time when production inventories are not being cleared.
I wonder how many Australian mortgages will be under water by this Christmas.
Ah well, all is good on planet Canberra; lots of new cafes to review and the real estate industry confirms house prices here are rising again so nothing to worry about.

Dunga, china just recorded an annual growth of 7%. So with all things considered 7% growth during tough times is excellent. Cant see anything bad happening in the china market. Infact they have a target of 17 trillion to invest this year in overseas markets. Yeah their sharemarket recently fell 30%, but it did rise by 150% in the six months prior, so they are still 120% up on the deal. China is doing quite well if you ask me. 560 million middle class chinese millionaires have a considerable buying power. Its only up and up for china. Indias middle class is doing pretty good too, so i wouldnt be surprised to see some competition between the two countries for international investments.

China reported a recorded 7% growth – a lot of commentators are saying it is impossible to verify these figures.
The recent share market correction was stopped by the government there buying into the market and “nationalising” it for a short period. How sustainable is a 120% annual rise in a share market, anywhere?
The 17 trillion that China is reported to be investing globally may have trouble finding a home too.
Any thoughts on how Australia is going to repay the half a trillion dollars we owe them already?

https://au.finance.yahoo.com/news/softer-commodities-fall-212722702.html

vintage123 10:02 am 27 Jul 15

Finally had a return message from CFCU, the deal they offered was in Dec 2014, they reduced the i year fixed rate of 4.84% to 3.75% however the comparitive rate was 5.15%.

Big four can match it with a premium pack bonus of .9% which takes the variable rate comparitive rate from 5.5% to 4.6%, as well as providing all the bells and whistles of the platform package, online and shopfronts and 24/7 access to assistance and advice including free brokerage and zero time transfers. The big four also allow you to access + LVR capital for investment purposes, which is handy as you can transfer your +LVR capital into bank shares to not only offset interest repayments but to gain interest as non taxable income. This also qualifies as a deposit for margin lending so therefore you can trade on the ASX through a mechanism like ComSec whilst your a portion of your funds are provided at 4.6% versus the margin rate of 7.6%. This is great for the positively geared portion of the portfolio and allows an extra beefed capital program for a negative geared investment portfolio.

Ezy 9:03 am 27 Jul 15

vintage123 said :

Ezy said :

vintage123 said :

Ezy said :

vintage123 said :

Ezy said :

Yup – exactly what I thought. Thats a very generous price.

Unfortunatley it will go between 625k and 650k. They would probably accept a pre auction offer of 650k.

The reason the prices have risen quickly in weston creek is due to the fluffy saga.

To be blunt, there has been considerable lobbying occurring behind the scenes regarding the rezoning of the fluffy blocks, and the precedence this sets for the unaffected blocks in the same streets and suburbs.

Developers have basically lobbied to say, we won’t touch them unless you allow unrestricted rezoning of the whole suburb, and green light seperate title subdivisions on 700m2 blocks.

So more than likely, once the governments works out that they will cash in considerably under a comple rezoning arrangement, the decision will be made to allow anyone to subdivide as long as the block is over 700m2, and they will be able to apply seperate title.

Therefore, anywhere near a cluster or in the general suburb currently on the market over 700m2 is considered desirable for those wishing to land bank or develop in the future.

Like I have said before, if you want to live in the area, grab something sooner rather than later, as prices are on the up.

Interesting, and thank you for the explanation – but given the information you are getting, the only people that would see this as a 650k block are those developer types. General Joe Public (me) look at this as and compare it to a similar house that sold in this street a few months back for 505k. To be honest, I haven’t seen many houses jump in value significantly over the last few weeks. If anything, they are the same as a few months ago.

The problem for me at this stage is lack of homes that offers good bang for buck renovation/extension potential. This particular home for me isn’t one I am interested in due to the way the house is skewed on the block. I have already sketched out a few extension ideas and what I had in mind wouldn’t be achievable due the building encroaching 1.5 metres from the boundary.

http://www.realestate.com.au/property-house-act-weston-120042137

Thats a different kettle of fish all together though – That house sold for 599k two years ago. The reason it fetched that 625k is because it was in an elevated position in Weston and on a nicer street. These houses always fetch a higher price than those down a few streets like the one we are discussing.

More recently, two houses sold on Sturges street. One for 440k! It was back in May and before some more information was released RE: Mr Fluffy, but I am seeing this from someone who is not too privy to what developers are doing behind the scenes.
http://www.realestate.com.au/property-house-act-weston-119620311
http://www.ozpropertyview.com/property-view/ACT/1386663844/9-Sturgess-Place-ACT/

My opinion – this house will go for around the 530 mark. Happy to eat my words, and have an ‘I told you so’ written to me, but I am just going on what I have learned in the 8 months of looking for property in this area. If it goes for the price you are saying, kudos to you – and ‘holy shit I better get my ass into gear’ to me.

Ezy, mate if you can get it for 530k then grab it. Dont overthink extensions or renovations, at the end of the day the land size in Weston will ultimately determine the value of homes. The other thing is if you buy one and overcapitalise through extensions or renos, your just throwing money away.

The only way i have seen people make money on renos, is if they are tradies, or they have family that are, or they convert a garage to a room etc. If you have to apply to council and get the tradies in, the cost are likely to be so high, that you may have well spent more initially purchasing a bigger house.

I would grab it at 530k if possible, do nothing to it, just live in it and set your loan up as i pointed out at point one, build some equity, noting your equity will come from the loan structure plus capital growth.

Then grab an investment property in 18mths time NG to minimise any tax you pay, as well as a share portfolio to maximise returns on the exploding small caps market and chinas deregulation.

If you use CBA, you can configure your banking in a one stop shop, especially the comsec account. Always check a loans comparitive rate before commiting.

Thanks again for your input – we had a look at the home in person which confirmed it is not for us. As for having a builder in the family, spot on. We have the opportunity to make renovations and extensions at an extremely good rate which is why we are looking for homes with that sort of potential. For us – it is no use getting caught up in land grabbing hype for something that is not going to suit the lifestyle we are trying to set up for ourselves.

I don’t want to sound like I am completely dismissing your opinion though. You obviously have a lot of knowledge and are closer to what is happening behind the scenes than many of us here.

vintage123 6:11 pm 26 Jul 15

arescarti42 said :

chewy14 said :

Really?

I think your suggestion doesn’t have a snowball in hell’s chance of getting through.

If they allow subdivision of all blocks down to 700m2, they might as well throw away the territory plan altogether. How could they possibly meet their other planning requirements in these older areas if they make such a wholesale change?

There’s absolutely no chance of this happening.

The Government has been very clear that allowing the Mr Fluffy affected blocks to be subdivided was a one-off to help them fund the buy back scheme.

There’s been plenty of community opposition around the negative impact subdividing just the few Mr. Fluffy blocks would have. No way is the ACT Government going to set itself up for massive community backlash just because a few developers want them to change the rules.

Many of these old suburban areas don’t have the infrastructure capability (e.g. sewers, power networks, roads, telecoms etc.) to support a another house on every second block without massive expenditure on upgrades anyway.

Happy to wager.

Here’s the public info
http://www.canberratimes.com.au/act-news/inquiry-gives-canberrans-another-chance-to-debate-the-return-of-fluffy-dual-occupancy-20150723-giefph.html

Maybe read through it in slow time.

vintage123 5:34 pm 26 Jul 15

Hosinator said :

vintage123 said :

Hosinator said :

vintage123 said :

Hosinator said :

We fixed for 12 months at 3.75% on our primary residence home loan. We went through a credit union and won’t be going back to the big banks anytime soon. The best our current lender at the time could do was a 0.01% drop to 4.2 on a variable loan.

Seek out credit unions or second tier banks, don’t bother with the big 4.

Which building society?
What was the fixed term?
What is the comparative rate?
Was there an application fee?
Did you pay for a valuation?

Community First Credit Union or rather their “online only division” Easystreet.
12 months and then it reverts to a variable, or if they have another special we can apply for it then.
Can’t recall the comparative, yes there was an application and valuation fee.

However, we will still save approximately $6000 in one year by switching.

Without the comparitive rate to compare, it is very difficult to examine if you have a better deal. I dont think I beleive your claim of saving 6k a year.

The $6k saving was between our Big 4 variable rate and account and the CFCU rate and account. We did the maths,a few times and came up with a one year saving of $6k. Hence why we moved.

I’ll add that there are no monthly or yearly fees and we get a 100% offset account.

I think you’re just jealous. 😛

Still not convinced. What is the comparitive rate?

Anyway, noting your dislike of the big four, the top three home lenders of the year were,
Newcastle permanent
Suncorp bank
Heritage bank

Furthermore the top 10 credit unions for the year were,
CUA
BCU
QCU
QCU Qantas
Catalyst money
QPCU
ICU
Uni credit
PCCU
GCU

What was your again, I am thinking you sold your self short as the above 13 would have bettered any deal.

As a CBA platinum, the words jealous are not in my vocabulary.

vintage123 5:24 pm 26 Jul 15

arescarti42 said :

chewy14 said :

Really?

I think your suggestion doesn’t have a snowball in hell’s chance of getting through.

If they allow subdivision of all blocks down to 700m2, they might as well throw away the territory plan altogether. How could they possibly meet their other planning requirements in these older areas if they make such a wholesale change?

There’s absolutely no chance of this happening.

The Government has been very clear that allowing the Mr Fluffy affected blocks to be subdivided was a one-off to help them fund the buy back scheme.

There’s been plenty of community opposition around the negative impact subdividing just the few Mr. Fluffy blocks would have. No way is the ACT Government going to set itself up for massive community backlash just because a few developers want them to change the rules.

Many of these old suburban areas don’t have the infrastructure capability (e.g. sewers, power networks, roads, telecoms etc.) to support a another house on every second block without massive expenditure on upgrades anyway.

Not just a few developers, it’s ALL the developers. The 150 companies.

Why do you think they are having the enquiry. It’s got nothing to do with the community. Instead of just ticking the approval, they have listened to developers and are now considering widening the scope of the rezoning.

Infill is a real issue in the ACT. The fluffy is an opportunity to explore the options and developer interest in moving forward with areas of rezoning.

I don’t think the conclusion will result in wholesale complete suburb rezoned, but it will be broader than just affected fluffy homes. You will see clusters and streets rezoned. If for example there are 6 of 10 homes on one street and say 5 of 10 on the backing street, then it would make sense to redone those two streets with dual occupancy seperate title conditions.

Very similiar to what is occuring in castle hill sydney, where two streets back to back have consolidated to sell as one entity, specifically to international developers, who can redevelop the 20 homes on the 1.5 hectare site and in return pay considerably more to the sellers for the consolidation.

The real winners will be those in unaffected homes within the cluster who will see the values of their blocks considerably,skyrocket upon rezoning.

dungfungus 1:53 pm 26 Jul 15

vintage123 said :

dungfungus said :

Cracks now appearing in Chinese economy and our dollar is rapidly falling.
Two Australian banks have now increased mortgage investment rates .27% to address overweighting of their exposure in that ledger.
Prices for all commodities (including gold) are falling at a time when production inventories are not being cleared.
I wonder how many Australian mortgages will be under water by this Christmas.
Ah well, all is good on planet Canberra; lots of new cafes to review and the real estate industry confirms house prices here are rising again so nothing to worry about.

Dunga, china just recorded an annual growth of 7%. So with all things considered 7% growth during tough times is excellent. Cant see anything bad happening in the china market. Infact they have a target of 17 trillion to invest this year in overseas markets. Yeah their sharemarket recently fell 30%, but it did rise by 150% in the six months prior, so they are still 120% up on the deal. China is doing quite well if you ask me. 560 million middle class chinese millionaires have a considerable buying power. Its only up and up for china. Indias middle class is doing pretty good too, so i wouldnt be surprised to see some competition between the two countries for international investments.

China reported a recorded 7% growth – a lot of commentators are saying it is impossible to verify these figures.
The recent share market correction was stopped by the government there buying into the market and “nationalising” it for a short period. How sustainable is a 120% annual rise in a share market, anywhere?
The 17 trillion that China is reported to be investing globally may have trouble finding a home too.
Any thoughts on how Australia is going to repay the half a trillion dollars we owe them already?

Hosinator 10:40 pm 25 Jul 15

vintage123 said :

Hosinator said :

vintage123 said :

Hosinator said :

We fixed for 12 months at 3.75% on our primary residence home loan. We went through a credit union and won’t be going back to the big banks anytime soon. The best our current lender at the time could do was a 0.01% drop to 4.2 on a variable loan.

Seek out credit unions or second tier banks, don’t bother with the big 4.

Which building society?
What was the fixed term?
What is the comparative rate?
Was there an application fee?
Did you pay for a valuation?

Community First Credit Union or rather their “online only division” Easystreet.
12 months and then it reverts to a variable, or if they have another special we can apply for it then.
Can’t recall the comparative, yes there was an application and valuation fee.

However, we will still save approximately $6000 in one year by switching.

Without the comparitive rate to compare, it is very difficult to examine if you have a better deal. I dont think I beleive your claim of saving 6k a year.

The $6k saving was between our Big 4 variable rate and account and the CFCU rate and account. We did the maths,a few times and came up with a one year saving of $6k. Hence why we moved.

I’ll add that there are no monthly or yearly fees and we get a 100% offset account.

I think you’re just jealous. 😛

arescarti42 4:44 pm 25 Jul 15

chewy14 said :

Really?

I think your suggestion doesn’t have a snowball in hell’s chance of getting through.

If they allow subdivision of all blocks down to 700m2, they might as well throw away the territory plan altogether. How could they possibly meet their other planning requirements in these older areas if they make such a wholesale change?

There’s absolutely no chance of this happening.

The Government has been very clear that allowing the Mr Fluffy affected blocks to be subdivided was a one-off to help them fund the buy back scheme.

There’s been plenty of community opposition around the negative impact subdividing just the few Mr. Fluffy blocks would have. No way is the ACT Government going to set itself up for massive community backlash just because a few developers want them to change the rules.

Many of these old suburban areas don’t have the infrastructure capability (e.g. sewers, power networks, roads, telecoms etc.) to support a another house on every second block without massive expenditure on upgrades anyway.

chewy14 3:18 pm 25 Jul 15

vintage123 said :

chewy14 said :

vintage123 said :

Ezy said :

Yup – exactly what I thought. Thats a very generous price.

Unfortunatley it will go between 625k and 650k. They would probably accept a pre auction offer of 650k.

The reason the prices have risen quickly in weston creek is due to the fluffy saga.

To be blunt, there has been considerable lobbying occurring behind the scenes regarding the rezoning of the fluffy blocks, and the precedence this sets for the unaffected blocks in the same streets and suburbs.

Developers have basically lobbied to say, we won’t touch them unless you allow unrestricted rezoning of the whole suburb, and green light seperate title subdivisions on 700m2 blocks.

So more than likely, once the governments works out that they will cash in considerably under a comple rezoning arrangement, the decision will be made to allow anyone to subdivide as long as the block is over 700m2, and they will be able to apply seperate title.

Therefore, anywhere near a cluster or in the general suburb currently on the market over 700m2 is considered desirable for those wishing to land bank or develop in the future.

Like I have said before, if you want to live in the area, grab something sooner rather than later, as prices are on the up.

Really?

I think your suggestion doesn’t have a snowball in hell’s chance of getting through.

If they allow subdivision of all blocks down to 700m2, they might as well throw away the territory plan altogether. How could they possibly meet their other planning requirements in these older areas if they make such a wholesale change?

I am happy to have a bet on it. Let me know the wager.

I have had 40 developers through the office in the last two weeks.
http://www.news.com.au/finance/real-estate/uks-shared-ownership-scheme-could-it-work-in-australia/story-fndban6l-1227453412448

Apparently you are already having a water on it by looking at these type of properties for those prices. I simply can’t see it happening on such a scale.

vintage123 3:00 pm 25 Jul 15

dungfungus said :

Cracks now appearing in Chinese economy and our dollar is rapidly falling.
Two Australian banks have now increased mortgage investment rates .27% to address overweighting of their exposure in that ledger.
Prices for all commodities (including gold) are falling at a time when production inventories are not being cleared.
I wonder how many Australian mortgages will be under water by this Christmas.
Ah well, all is good on planet Canberra; lots of new cafes to review and the real estate industry confirms house prices here are rising again so nothing to worry about.

Dunga, china just recorded an annual growth of 7%. So with all things considered 7% growth during tough times is excellent. Cant see anything bad happening in the china market. Infact they have a target of 17 trillion to invest this year in overseas markets. Yeah their sharemarket recently fell 30%, but it did rise by 150% in the six months prior, so they are still 120% up on the deal. China is doing quite well if you ask me. 560 million middle class chinese millionaires have a considerable buying power. Its only up and up for china. Indias middle class is doing pretty good too, so i wouldnt be surprised to see some competition between the two countries for international investments.

vintage123 2:30 pm 25 Jul 15

Ezy said :

vintage123 said :

Ezy said :

vintage123 said :

Ezy said :

Yup – exactly what I thought. Thats a very generous price.

Unfortunatley it will go between 625k and 650k. They would probably accept a pre auction offer of 650k.

The reason the prices have risen quickly in weston creek is due to the fluffy saga.

To be blunt, there has been considerable lobbying occurring behind the scenes regarding the rezoning of the fluffy blocks, and the precedence this sets for the unaffected blocks in the same streets and suburbs.

Developers have basically lobbied to say, we won’t touch them unless you allow unrestricted rezoning of the whole suburb, and green light seperate title subdivisions on 700m2 blocks.

So more than likely, once the governments works out that they will cash in considerably under a comple rezoning arrangement, the decision will be made to allow anyone to subdivide as long as the block is over 700m2, and they will be able to apply seperate title.

Therefore, anywhere near a cluster or in the general suburb currently on the market over 700m2 is considered desirable for those wishing to land bank or develop in the future.

Like I have said before, if you want to live in the area, grab something sooner rather than later, as prices are on the up.

Interesting, and thank you for the explanation – but given the information you are getting, the only people that would see this as a 650k block are those developer types. General Joe Public (me) look at this as and compare it to a similar house that sold in this street a few months back for 505k. To be honest, I haven’t seen many houses jump in value significantly over the last few weeks. If anything, they are the same as a few months ago.

The problem for me at this stage is lack of homes that offers good bang for buck renovation/extension potential. This particular home for me isn’t one I am interested in due to the way the house is skewed on the block. I have already sketched out a few extension ideas and what I had in mind wouldn’t be achievable due the building encroaching 1.5 metres from the boundary.

http://www.realestate.com.au/property-house-act-weston-120042137

Thats a different kettle of fish all together though – That house sold for 599k two years ago. The reason it fetched that 625k is because it was in an elevated position in Weston and on a nicer street. These houses always fetch a higher price than those down a few streets like the one we are discussing.

More recently, two houses sold on Sturges street. One for 440k! It was back in May and before some more information was released RE: Mr Fluffy, but I am seeing this from someone who is not too privy to what developers are doing behind the scenes.
http://www.realestate.com.au/property-house-act-weston-119620311
http://www.ozpropertyview.com/property-view/ACT/1386663844/9-Sturgess-Place-ACT/

My opinion – this house will go for around the 530 mark. Happy to eat my words, and have an ‘I told you so’ written to me, but I am just going on what I have learned in the 8 months of looking for property in this area. If it goes for the price you are saying, kudos to you – and ‘holy shit I better get my ass into gear’ to me.

Ezy, mate if you can get it for 530k then grab it. Dont overthink extensions or renovations, at the end of the day the land size in Weston will ultimately determine the value of homes. The other thing is if you buy one and overcapitalise through extensions or renos, your just throwing money away.

The only way i have seen people make money on renos, is if they are tradies, or they have family that are, or they convert a garage to a room etc. If you have to apply to council and get the tradies in, the cost are likely to be so high, that you may have well spent more initially purchasing a bigger house.

I would grab it at 530k if possible, do nothing to it, just live in it and set your loan up as i pointed out at point one, build some equity, noting your equity will come from the loan structure plus capital growth.

Then grab an investment property in 18mths time NG to minimise any tax you pay, as well as a share portfolio to maximise returns on the exploding small caps market and chinas deregulation.

If you use CBA, you can configure your banking in a one stop shop, especially the comsec account. Always check a loans comparitive rate before commiting.

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