22nd May 2017: Auction Snapshot: Saturday 20 May

What's happening in the market…

New Banking Legislation Impacts Interest-Only And Investor Loans

A rise in certain mortgage rates is already underway with recent actions by the bank regulator putting a handbrake on interest-only home loans. Our finance team, Shore Financial, reports that some of the major banks have been told that less than 30% of new mortgages can be interest-only, a significant decrease to the last reported figures and a peak of 45% in 2014.

Theo Chambers of Shore Financial says, "There have been significant regulatory changes in the past 12 to 18 months, mainly around banks lending policies and affordability. Most importantly, there have been substantial changes in the past few months with regard to interest only and investment loans. APRA and ASIC have implemented a new requirement to the major banks to restructure their debt books enforcing a larger proportion of loans to be structured on principal and interest repayments."

In the current climate of policy change and with interest rates starting to nudge upwards, Theo advises that buyers should carefully consider all their options.

Theo continues, "Second tier lenders are not being as heavily scrutinised and may be able to offer borrowers better loan funding terms compared with the major banks. In fact, some banks are now not even funding or refinancing any new investment or interest only loans and the difference between options and lenders can be as great as 1%."

The above information was provided to us by Shore Financial.

Saturday 20 May
Number of auctions in Victoria: 995
Clearance rate: 80%

The same weekend last year
Number of auctions in Victoria: 750
Clearance rate: 73%

Auction highlights…

35 Houghton Road, Warrandyte

This three bedroom, two bathroom home features landscaped gardens, alfresco areas and cathedral ceilings. The lounge room has a relaxing fireplace, with the French provincial kitchen including stone surfaces and stainless steel appliances. Shops, Anderson Creek Primary School, Yarra River and transport are all located within walking distance.

Number of bidders: 4
Sale price: Confidential

39 Indra Road, Blackburn South

Located on a leafy corner block, this home is close to Orchard Grove Reserve, a primary school, transport, shops and eateries. The four bedroom, one bathroom weatherboard residence is an open plan space, featuring a large decking and a garden.

Number of bidders: 6
Sale price: $936,000

37 Allison Road, Mont Albert North

A four bedroom, two bathroom, renovated weatherboard home featuring a Provincial style kitchen, an alfresco space, a rear studio and a huge garden. Close by are a selection of schools, transport and shops. The residence has potential to redevelop (STCA).

Number of bidders: 5
Sale price: Confidential