Smaller mortgages are the trend with Australians nowadays as house prices soften in Australian capital cities.

Australians have been observed nowadays of borrowing less as homes for sale prices slide.

This trend has further cemented to the Australians the culture of reducing debt which was brought about by the global financial crisis.

According to the data from AFG, Australia’s biggest mortgage broker, people who were pulling out mortgages in June signed up for smaller loans proportional to the value of their property, which are loans representing a lower percentage of their property’s value than at any time during the previous six months.

With prices of design house sliding, Australians are borrowing lesser amounts which are in proportion to their property prices.

Statistics reveal that the average loan to valuation ratio (LVR) was 64.2 per cent nationally and the average LVRs is declining in NSW, Victoria, South Australia and the Northern Territory.

As house land package prices soften, Australians are signing up smaller mortgages. And in June, it was revealed that the average mortgage size across Australia was $384,042, which is about 1.1 per cent lower than the previous month.

All throughout the states, the average mortgage size waned except in NSW and Western Australia, where a growth of 0.5 per cent and 3.3 per cent, respectively, was being observed. However in WA, the average mortgage size increased from $399,000 to $412,000.

Meanwhile, as a positive sign of the gradual recovery of Queensland from last summer’s floods and natural disasters, mortgage sales reached the same level in June as they did in the corresponding month a year earlier for the first time in five months, which indicates confidence in the market is returning.

However, the residential property landscape still remains unresponsive, with the annual housing credit growth showing a slow down to almost 6 per cent, as compared with an average 14 per cent over the past 34 years.

Likewise, a slowdown in household credit and in most values of assets including housing was also noted.

However, the central bank gave borrowers another chance for respite, in which the overnight cash rate was left at 4.75 per cent.

Meanwhile, Jonathan Mott, a UBS analyst, told clients last week that the housing credit growth was expected to slow down with further thanks to the recent pressure on household budgets caused by higher interest rates and utility, food and petrol prices.

UBS predicts that the housing credit growth will slow down to 4 per cent by the years 2013, and the personal lending will fall to 2 per cent.

Good News

People who are intent on borrowing or refinancing are being offered many deals due to the fact that big banks are jostling in to grab another 1.7 per cent share of the mortgage market in June from smaller competitors.

AFG’s general manager of sales and operations, Mark Hewitt, says that big banks now have 82.1 per cent of the market as these major lenders are hungry for business.

Meanwhile, non-major banks took 21.3 per cent of the refinancing deals and 23.8 per cent of first home buyer mortgages in June.

The big four have gained more toeholds since March, due to the fact that 25 per cent of first display homes buyers and borrowers who are seeking to refinance have chosen to borrow from a smaller bank or non-bank lender.

Australia has been known to have the largest dwellings in the world and these houses are noted to be of high quality, with the average Australian house estimated at 214 square meters.

Now, the sizes of Australian houses have shrunk as potential home buyers are being offered new house and land packages that is a quarter the size than what was supposed to be before.

The shrinkage is blamed on the changing household preferences.

As Australian households are now apparently demanding lower maintenance homes, home builders, looking to meet the market, now offer more affordable house-and-land options, with lot sizes being squeezed into a less than 200sq m lot for the first time.

Likewise, backyards which have been reducing in size for decades and in recent times have been swallowed by a pool and deck may shortly disappear.

The downsizing trend in the homes for sale is said to have surged in the US since the global financial crisis and has sprung up in Western Australia, South Australia as well as in Victoria.

Australian house builders are now making certain that they are ready for the arrival of rear-loaded blocks or laneway, which are lots where a garage is built at the back, allowing car access via a laneway.

The era of the McMansions had ended as small lots are now in demand.

However, though changing household preferences could be one of the causes of this shrinkage, the main reason behind this shrinkage unfortunately is attributed to the government’s urban consolidation policies since the early-2000s which includes the implementation of urban growth boundaries around Australia’s cities as well as more restrictive zoning.

These policies have significantly driven up the prices of fringe land, which have both compelled the move to smaller block sizes in order to maintain some appearance of affordability as well as pushing-up the prices of new and pre-existing display homes.

Affordability as well as Livability

With this recent development, potential home buyers are likely to see house-and-land packages being offered at a price around $320,000, which is quite affordable.

Three-bedroom homes with an ensuite, double garage at the back, walk-in robes and a drying court are also likely to be offered.

Plans on introducing a range of affordable housing and smaller block sizes into its communities are also on the works.

Australian developers are aiming for affordability as well as livability in building these new houses. A more efficient block size situated near parks, public transport, places of employment and other amenities will more likely make people less reliant on their cars.

Though home builders admitted that yards would likely disappear and “terrace” block sizes would be as small as 7.5m by 25m (187sq m total), the loss of the yard  have only followed a trend where people are contented to have low-fuss outdoor areas and are happy to pursue social and sporting interests away from home.

The rise of the small block houses is said to be inevitable as smaller house and land packages would open up the market and would be a better use of resources.

Previously, only a deposit and a full-time job are the standard requirement needed to get a home loan, but not with this day and time. Today’s lenders are requiring much more.

What you need to get a home loan? (what lenders want to know)

Today’s financial instability has brought a prospective home-buyer’s complete financial history under the microscope, as home loan lenders try to determine whether they are ever going to get their money back.

A potential display homes buyer’s credit history: credit cards, personal loans, HECS/HELP (Education Contribution Scheme/Higher Education Loan Programme) debts as well as their rental history are being completely and thoroughly checked out before any approval is granted to home buyers.

The number of lenders with home loan requirement needing only a 3 percent deposit has doubled to 5 per cent since January, according to ratecity.com.au, a financial comparison website. Many lenders are still wary and keen to avoid the kind of risky loans that had given rise to the global financial crisis.

Now lenders are more than ready to comply with new responsible lending practices.

Prospective buyers of house plan designs are advised not to take up the banks’ offers of increasing their credit-card limit, under any circumstances, as this would become the basis for refusing them of their home loan.

Banks are now wired to consider the worst-case scenario, as many bad home loans have gone unpaid as, according to a survey done last April, more  than one in five Australians are struggling to repay debt due to the increasing costs of living.

Furthermore, according to a credit-risk manager at one of Australia’s big four banks, one of the biggest determinants of whether a bank will offer a home loan is an applicant’s credit scores, which is acquired through credit agency Veda Advantage.

Likewise, banks also discriminate on postcodes.

Bills payment history, meaning bills that are not paid on time, are also being thoroughly checked and evaluated for any pattern as well as an applicant’s employment history; that is whether applicants have been in steady jobs for longer than six months and their assets and liabilities.

Banks are now being thorough in their credit history check, with stricter and stiffer home loan requirements and guidelines being implemented.

What do potential home-loan borrowers need to do?

With today’s stricter home loan guidelines and requirements, potential home-loan borrowers need to take action now to ensure that there are no hidden obstacles that could prevent the granting of their home loan in the future.

A Smartmove professional mortgage adviser advises:

• if you suspect of any previous misdemeanors on your file, get a copy of your credit report from Veda Advantage. This would allow you to overcome any issues that may arise in the credit-application process.

• take measures to keep your credit file clear by undertaking a My Veda Alert subscription, which would also protect you against identity theft.

• update all your current or potential creditors — company, personal or otherwise—to all changes to your address details to make certain that bills don’t get lost.

• make sure to pay your bills on time and, if possible, set up direct debits for bill payments in order to keep your credit file as clean and tidy as possible.

With the increasing number of first-home buyers snatching up apartments and townhouses that may otherwise have been bought by investors, first-home buyers are now acquiring the benefits brought about by the sluggish Perth housing market.

According to the Real Estate Institute of WA, investors had lost interest in buying house & land packages due to the city’s over-priced properties; thus, decreasing competition and forcing down prices of house plans designs, particularly for multi-residential properties which usually attract investors.

March quarter figures released by REIWA’s this week has showed that the median price for a grouped dwelling that includes apartment, unit, townhouse or villa in Perth has dropped by about $7000 to $402,000, while outside the capital it fell about $2000 to $325,000.

REIWA president Alan Bourke said in his statement that investors often preferred multi-residential properties but they are thin on the ground.

Recent property market conditions appear to be in favor of first-home buyers who have been reasonably active and represented about 23 per cent of buyers during the quarter.

According to the latest state government data, the median purchase price in Perth for first-time buyers was $415,000 and $325,000 for those in regional areas.

The statistics follow Premier Colin Barnett’s controversial comments this week which persuades first-home buyers of home designs to lower their expectations to enter the market.

During the March quarter, healthy first-home buyer activity was in disparity to existing home owners looking to trade-up.
According to Mr. Bourke, many of them were “caught in a bind”, unable to commit to selling before buying, causing the property market to stall.

This week, WAtoday.com.au revealed that the state’s property market had fallen into the worst fall in nearly two decades.
According to the government’s official land information authority, Landgate, in just 12 months, activity in the housing market has declined by 15 per cent while more than one-third since the height of the boom in 2005-06.

Even though during the March quarter sales activity had improved, according to REIWA, the overall turnover continued to remain 25 per cent below average in Perth and 35 per cent below in the country.

It had turned out to be a buyers’ market, with 50 per cent more homes for sale than required to meet demand, Mr. Bourke said.

To get the deal done most home builders are reducing their asking price by around 7.5 per cent while sellers who need a quick sale just simply adjust their expectations and asking price before going to market.

On the other hand, according to Mr. Bourke, the fall in median price from December 1 was expected to be only 1 per cent.

Mr. Bourke additionally stated that preliminary data suggests that for the March quarter, the median house price will be about $485,000 for Perth and $375,000 elsewhere.

The rental vacancy rate has tightened regardless of a flooded market and has led to the first increase in rental prices in 12 months.

During the March quarter, rents rose by $10 to $380 per week in Perth, while the vacancy rate remains just above 3 per cent.

Mr. Bourke explained that typically, when the market is flooded with properties, many investor-sellers decide to withdraw their listings until conditions improve and shift their properties into the rental market which relaxes the vacancy rate. However, this doesn’t seem to be happening at the moment.

Australia’s display home vendors are facing a weakening winter demand if they are not prepared to meet the market with the stock levels slowly increasing over the next few weeks.

With the recorded rise in Australian residential building approvals seen in the last month of the first quarter of 2011, home builders have been quite busy constructing units in support of these increased building approvals.

However, if Australian vendors of house and land package are not prepared to meet the market, they would surely encounter a softening of the house for sale market with the flagging winter demand.

Of the weekend’s 577 reported auctions, the clearance rate was 60 per cent, where it has been hovering since February.

According to Adrian Jones of the Noel Jones Agency, his agency had only sold six of its eight auctions, which includes the current church site at 14-16 St George Crescent, Ashburton.

Jones recalled that seven bidders fought to bid for the block, which is the church site at St George Crescent, Ashburton, that covers 2400 square meters. The church site was on the market around its quoted price of $2.5 million, before it was sold for $3.21 million.

Mr. Jones further commented that ”It sold for well over the expected price and just goes to show that if you have the right property at the right price, the public will come out and bid for it.”

Another property sold by Mr. Jones is at 34 Acacia Street in Box Hill which was sold under the hammer for $1,084,000 but was sold for $900,000 about two years ago.

These comes to show that Australians have become more concerned with the prices of design house and are more vigilant on buying expensively priced house for sale.

”The marketplace is much more price sensitive and people are more cautious about paying record prices, but when you put the right property on the market, people will compete.” Mr. Jones said.

Ruth Roberts of Woodard Carnegie said that her agency had multiple bidders and had sold their two Sunday auctions in Glen Huntly.

Roberts explained that nowadays bidders are being cautious; however, buyers are also focusing their attention to better properties.

Leading Agents of Australia has released its annual sales figures and stated that “buyers are now in a better position to enter the higher end of the market”.

Jock Gilbert, LAA chairman, said that ”After years of consistent growth there has been recent speculation of a housing bubble.”

Gilbert explained that though there is evidence of a slowdown; however, the figures indicate that Australia is now experiencing a more even playing field for vendors and buyers, rather than a slump.

In the meantime, Peter Rogozik, a buyers’ advocate said that the overall auction figures did not essentially mirror accurately what was a segmented property market.

According to Rogozik, the secondary location properties were undergoing price corrections, or reductions, of about 5 per cent.

Rogozik further clarified that ”However, the quality segment, which represents a very small portion of the market, is still holding up well.”

Frank Valentic, Advantage Property Consulting’s, said that for his client at 59 East Boundary Road, Bentleigh East, a realistic reserve contributed to a strong result.

The last month of the first quarter of 2011 has seen a rise in Australian residential building approvals of a seasonally adjusted 9.1 per cent to 13,627 units in March. This positive development is a sure step towards a positive improvement from an upwardly revised 12,492 units in February.

This means that house builders or home builders are now quite busy building display homes and have increased the number of house and land package available in the market.

Australian home builders are busy constructing units for sale in support with the increase in building approvals.

However, according to the Australian Bureau of Statistics (ABS) statement, despite the negative result over the previous year that is in March 2010, building approvals were still down by 18.1 per cent.

A significant or major indicator of where the economy in general is likely to go, the increase of number of building approvals is likely, but not certain, an indicator that the economy is heading towards a period of growth.

Building approvals is said to be a major indicator of where a country’s economy is likely to go but it is not a sure fire sign that a country’s economy is quite stable.

In February, the positive growth in activity came most particularly in non-housing, such as apartment blocks, with 5473 units started in March as compared to the 4233 units built in the month of February.

Though there is an increase in building approval, home starts remain sluggish. This slump in home starts from the previous month and over the year is said to be an indication of the continuing negative impact of last November’s increase of interest rate on potential home owners and the building industry.

In the month of March, home building saw a 8154 home starts which is a fall of 0.8 per cent as compared to 8258 home starts in the month of February and which is still said to be well below the 10,188 home starts in the month of March last year.

Though home builders are busy constructing and increasing the number of display houses for sale showcases; however, house prices are still up indicating the housing market has become soft.

Bed Deda, St George Bank chief economist, said in a statement that though for the month of March, the building approval numbers were strong; however, the housing sector is still experiencing some soft conditions more generally.

Bed deda explained that there is clearly an underlying demand for the construction side of the property market which should support building approvals; however, in general, house prices are coming off as well as in some areas of house finance.

With the increase in building approvals, house builders are now quite busy building house units in support of these increased building approvals.

Potential Australian home plans buyers should expect to see a wide range of house and land package and display homes units in their area for home builders are quite busy in building these units in support of the increased building approvals.

The increased building approvals are really a positive development for house builders and potential home owners alike.

According to the Australian Bureau of Statistics (ABS), the house price index of  eight capital cities have fallen 2.1 per cent in the first quarter of 2011 compared with an upwardly revised 0.8 per cent increase in the house price index for the December quarter.

Brisbane, Perth, and Darwin have suffered the biggest declines.

The fall was said to be the biggest since the financial crisis of September quarter of 2008.

Property analyst RP Data-Rismark’s report has discovered that the March capital city houses for sale prices were relatively flat as compared with the month of February, which has fallen with just 0.2 per cent, though house prices were down 0.6 per cent from a year earlier. The report pointed to a cooling in the housing market.

These grim developments in the property market would surely affect the prices of house and land packages and houses for sale in Australia and the homes builders of display homes in Australia.

The market analysts have also predicted a drop of 0.5 per cent in the March quarter, for a year-on-year climb of 1.6 per cent, according to Bloomberg data.

The quarterly prices as well as the annual price moves were both worse than expected.

As compared to last year, the Australian housing market has cooled significantly in 2011. This may due to the higher interest rates, worries about the economy, banks tightening credit, and affordability problems which had put off would-be buyers.

During its board monthly meeting this week, the Reserve Bank is broadly expected to leave interest rates on hold, keeping its rates at 4.75 per cent.

Except for Perth and Hobart, every capital city has recorded a decline in the March quarter, with the drop in Melbourne’s house prices of 2.5 per cent in the quarter matching flood-hit Brisbane, which has also experienced the same pull back, according to the ABS data.

According to RP Data research director Tim Lawless, the flooding that happened across southeast Queensland has probably increased Brisbane’s weak market conditions that lead to the 4.6 per cent drop in Brisbane house prices.

Meanwhile, ABS said that Sydney prices index has dropped to 1.8 per cent, Adelaide has 1 per cent decline. However, in Perth, prices climbed to 0.5 per cent and in Hobart, it rose to 0.4 per cent in the quarter.

The national median dwelling price in the first quarter was $455,000.

Mr. Lawless said that the drop in house values following the sharp rise in interest rates in 2010 are probably going to revive first-home buyer demand, which is fraught with low affordability.

Furthermore, Mr. Lawless stated that the market would favor buyers with the income growth across the economy at 6 per cent per year and the interest rates close to their cyclical peak.

Currently, property prices are under close scrutiny for some market analysts says that the property prices have been over-inflated for some years and are ready for a correction while others disagreed that a strong income growth will sustain the market.

A rise in rents is also shown in the RP Data figures which is said to offset the effect of property value drop for landlords.

Reserve Bank figures this week showing Australians taking out 6.6 per cent more in loans than a year earlier shows that the growth in home lending has not entirely flat lined.

Almost all are of the same opinion that buyers of house for sale need to sort through all the large volumes on the market to find a quality property as the performance of Melbourne’s residential market is illustrated differently depending on who you ask.

According to Greville Pabst, from valuer WBP Property Group, the market has been observed to be in complete flight in March, with 2925 auctions and an average clearance rate of 63 per cent.

This year alone, there have been 5500 auctions in Melbourne, a nice improvement of 200 over this time last year. The majority of the properties passed in have sold later, while the clearance rate is lower.

Sean Thomson, one of WBP’s senior residential advisers, states that what is happening is like a textbook case of quality properties finding a buyer and compromised ones being left on the block. He also added that now is a good time to be a buyer instead of house builders for most auctions are selling close to their reserve. However, the quality of property of houses for sale being offered is lower than those offered last year.

Thomson commented that any home or house plans or apartment that isn’t correctly priced is not selling on the day.

Buyers need to be selective in this current market. Investors are likely to be sorely disappointed in their belief that they are getting a bargain when they see the performance of their asset.

With just under 3000 auctions scheduled, this April appears to be one of the busiest. Vendors looking for to cash in on what they observe as a plateau in Melbourne real estate are motivating this activity.

According to Thompson, though this reaction is characteristic for this stage in the property cycle, however it is not a sound advice.

He commented that the last time he has seen this type of market was in the period of March to May of 2008 when the stock was high and clearances were in the 60 to 69 per cent range. He further said that astute investors who bought during this period will have seen an average 33 per cent growth in the value over the last 20 months.

The market is treading water, and there is still a lot for sale come Easter, which has been noted to be slowly selling when vendors meets the market, says Buyer agent JPP.

The market is falling to pieces as JPP describes, with the sector over $1.5 million beginning to soften. Several properties are failing to be sold at auction, and there is no shortage of vendors still happy to try their luck. However, overpriced properties are struggling, while the top properties are still selling with multiple bidders.

This trend in the market results to an increased supply than demand and having vendors in bigger difficulty than they have been for the past six months, says JPP in his market overview.

He commented that the $400,000 to $1 million sector is by a long way the strongest as it is the investors’ marketplace of choice. This sector has been the strongest performing segment over the past decade and should hold the least risk for investors going into the next decade.

Meanwhile, valuer Landmark White commented that while the volume of sales held up during much of 2010 in the inner Melbourne apartment market, anecdotal evidence suggests that sales rates have slowed over the first quarter of this year. However, he has noted that low vacancies have significant rental levels increase, with two-bedroom apartments showing the best growth followed by three-bedroom apartments.

Nevertheless, an oversupply and its knock-on effect to prices could be threatening with close to 13,000 apartments in the development pipeline in Melbourne.

Display Houses.com.au is the best site if you are looking for the right home builder for your dream house. They featured some of the best Australian Home Builders. They also offer a wide selection of house & land packages, and display homes for sale made by the leading and emerging new home builders in Australia.  They are the complete resource for new home designs, house plans designs and home builders that fit your budget plan.

Everybody needs a home they can call their own. Thus, every family prioritizes acquiring a home first above everything else. In Australia, a lot of the building industry is aiming at providing the market with houses for sale or house and land package.  New home plans are being shown to lure would-be buyers. Recently, the market has its ups and downs which resulted from different catastrophes and other reasons which affected the buyers and the market. It is a great struggle for both parties to be able to stand back on their feet. It is hoped that buyers will be able to get enough wages to acquire their houses while the building industry is hoping to get enough buyers to break even.

Now, ANZ is optimistic enough in reassuring the global investors about the condition of the Australia’s property market. They have sent a senior executive to speak at a Hongkong conference and assure its audience that the fundamentals are sound.

Property prices and consumer debt levels are expected to be scrutinized as the Reserve Bank recently released its half-yearly glimpse on the condition of the nation’s financial system.

Phil Chornican, ANZ’s Australian operations boss, recently spoke at the Credit Suisse Investment conference and said positively that the fundamentals of the Australian economy were supportive of house prices. It also noted that shortages in housing stock supply supported the pricing levels.

Australian bank executives are under a lot of scrutiny and questioning about the health and condition of the housing market during global investment forums. In recent years, the North America and some parts of Europe suffered a little, that is why most people would believe that the Australian market will experience the same and that it will not be able to sustain itself.

The Economist magazine reportedly said that a survey has been done regarding the estimation of the Australia houses for sale and noted that it has been overpriced by 56 percent. It is the highest.

It is a fact that most local banks are lending its money for housing loans. Changes in value of these houses for sale in Australia would bring big impact on everyone else and will be a great deal for most investors. He then said that there is nothing much to worry about since this household debts are taken by households with higher incomes; thus, they have the capacity to pay their debts.

Though this news maybe good, still we have to be ready for whatever changes there are with the economy. This is because we will never know when a catastrophe will happen like the flood in Queensland which made an effect to the economy and the building and housing industries. These effects might have been positive but most of it was negative since it changed the minds of some potential clients who would’ve wanted to invest in Australia. Yet, these are realities we have got to accept and these happen for us to change and learn more in order to build a better tomorrow. Everything happens for a reason and that reason is for the better.

A bold reddish-pink shade, something in between fuchsia and pink – Honeysuckle is the color for the year 2011. Yes, it’s the in color for houses for 2011. A bold and dynamic color, it encourages and uplifts us. As a color, this bold pink uplifts our mind and gives us confidence, spirit, and courage to meet everyday challenges.

Using this vibrant color of honeysuckle in home designs enlivens the homes and uplifts the spirit of anyone living in these houses. House designs and plans with honeysuckle as their color would really be abundant this year. Home builders have now begun using this color in their display homes.

So why the fuss for this color? As Pantone’s Executive Director Leatrice Eiseman says, honeysuckle will elevate our spirits in times of stress. “Honeysuckle is a captivating and stimulating color that gets the adrenaline going — perfect to ward off the blues.”

In houses, honeysuckle will add elegance into your interior spaces. It will definitely perk up your home. It is a sure way to make your house look upbeat and dynamic.

At first, you might feel uneasy using this bold color. But don’t despair; honeysuckle has the influence on other colors to deepen their intensity.

Last year’s Pantone color of the year matches perfectly with honeysuckle so you can go on using last year’s color but you can update it with a shade of pink. Paint your kitchen, hallway, and living area with honeysuckle to give them vigor and enliven these areas. It is a great way to cover up shabby kitchen cabinets and enliven the room with its bold and energetic shade.

Match up your honeysuckle with basic black, charcoal, or light to mid grey and navy colors. You may also try complimenting it with bronze greens like tapenade to add complexity to the arrangement. Choose a few key pieces like cushions and floor rugs in honeysuckle if you are not sure of where to start. These key items in honeysuckle color will cheer up your room.

But be careful! Decorating your home is a serious matter. One cannot be lax in what to put inside your home for people believe that one’s house is a reflection of one’s personality. So one must be careful in what to put in them and make sure you use this bright color carefully.

You may also use placemats and glassware in honeysuckle in the dining room and a honeysuckle-colored vase in the bedroom or living room.

All you have to remember is to take one small step in decorating at a time. Too much of everything is bad. It would be disastrous to your home. So if you want house design that are in honeysuckle, put in mind that this vibrant shade also mixes well with orange, industrial style.

So, start invigorating your homes now and choose home designs that are in honeysuckle, and cheer up your life!