Deposit gap scheme opens the door to home ownership: UDIA’s Connie Kirk

 The introduction of legislation giving effect to the Commonwealth Government’s deposit gap scheme is the first step in easing the pathway to home ownership. The scheme – promised on the eve of the federal election – helps reduce barriers to home ownership by closing deposit savings requirement and effectively reducing mortgage insurance costs.

We welcome introduction of the legislation and the next critical step is getting design features right.

UDIA has been actively engaging with the National Housing Finance and Investment Corporation (NHFIC), which has carriage of the scheme’s design, implementation and ongoing management. The scheme rightly recognises that saving for a deposit is arguably the biggest hurdle most homebuyers face in trying to enter the market.

The rapid escalation in house prices in the past decade has widened the deposit gap, so the Commonwealth’s decision to effectively go guarantor on a portion of the loan makes sense. It sits well alongside other initiatives to improve housing affordability – like retention of negative gearing and capital gains tax arrangements, and improved loan serviceability assessment rules.

The next challenge is to ensure the design principles of the scheme reflect the reality of house prices in different markets.

The draft legislation proposes variable price caps for different capital cities and regions, which is a perfectly logical step.

UDIA would also urge however that the same flexibility apply to income thresholds, particularly in the most expensive capital cities like Sydney and Melbourne. Our research shows that singles in particular on the proposed income threshold of $125,000 would not be able to access housing in large tracts of Sydney and Melbourne.

The other recommendation is to limit access to the scheme to newly-constructed properties, which has the benefit of spurring construction activity at a time the economy needs a boost.

We also welcome provisions in the legislation to expand the mandate of NHFIC to examine housing supply, demand and affordability. The renewed research capacity will give the Government deeper insights into the policy barriers to improved housing production and better affordability.

UDIA National looks forward to working further with Government on the precise design of the new mandate for NHFIC.

CONNIE KIRK is the UDIA National Executive Director.

Editor’s note: Yeramba Estates is a longstanding and active member of UDIA.   


Financing your new home build

Trying to get into any property area is difficult for First Home Owners, but the Central Coast has always proved to be an affordable option, especially when building in a new estate like Yeramba’s Hamlyn Grove. Adding the attraction of brand new home with personal choices, it makes an enticing option.

However, finance for new builds is different to those for existing homes. It’s a “two step” process.

Normally when buying an existing home the bank gives the buyer a lump sum of loan amount at settlement. but when buying then building, it works differently. In this case the bank gives the customers one loan to buy the land, and a second loan – a construction loan – to build the home. This second loan is drawn down as the building work progresses, and interest is only charged on that drawn down amount.

It makes sense to simplify this process by ensuring your land is well located amongst other quality homes. Yeramba’s reputation for over 50 years ensures a solid investment for the future. Talk to us now for any advice on this process we understand so well.

Right now is the Good Old Days

In our Yeramba posts we look for insight to help in the quest for the perfect home, the best location for land, or tips to navigate the journey to purchase in the lovely Central Coast, Lake Macquarie or the Hunter regions.

But today I found a great story from Michael Yardney, so worth sharing as it focused on how to achieve our financial and real estate goals in what seems to be a difficult time.

Thank you Michael, wise words.

If we were to judge whether 2019 is a good time in the history of the world, many people would probably think not, wouldn’t they?

We’re fed a steady stream of “bad news” via our 24/7 news cycle as well as the ubiquity of economic data which is often portrayed gloomily.

In fact, the instantaneous review of monthly data-sets can often have us seesawing from “the property slump is over” one week to “the economy is heading into a recession” the next.

Then there are the stories about faltering property prices, the high cost of living, the ever-increasing pressure we’re putting on the environment and the fact that property is unaffordable for many.

These are enough to get anyone down.

It’s just too easy to buy into the doom and gloom hype that seems so prevalent in the mainstream media these days. So it’s no wonder many of us are pining for the “good old days”.

But what if I told you that you’ve won the lottery and right now, we are living in the best country in the world and at the best time in human history – if only we could stop complaining long enough to realise it? Thanks to the invention of the internet, we have access to a whole world of possibilities our parents and grandparents would never have dreamed possible. We can video chat with friends and family on the other side of the world, work from home and even gain qualifications through prestigious overseas universities, all without leaving the couch.

Not to mention the seemingly limitless news and entertainment that we have right at our fingertips.

International travel has never been cheaper, and platforms such as Airbnb enable us not only to jetset on a budget, but also to make some cash on the side when our home is empty. While once upon a time dining out was a rare treat, reserved for birthdays and anniversaries, most of us can afford to eat at restaurants and buy takeaway on a regular basis, even if we don’t have a huge income. And if we can’t be bothered going out, we can have the finest cuisine brought to our home using Ubereats.

So what is wrong with this picture?

Unfortunately, human nature is such that with all these advances and improvements, we can’t help but want more, more, more. The house, the cars, the holidays and the daily double-shot macchiato, and dare I mention the controversial smashed avo on sourdough toast. We want everything, and we want it yesterday, and this mentality leaves us wide open to the relentless pursuit known as “keeping up with the Joneses”.

But none of it is real

Real happiness, and real financial security, can’t be found at the bottom of an award-winning bottle of wine in a fancy restaurant.

It’s gained through hard work, discipline and maintaining your priorities – spend a little here, save a little there, until you reach a point where you’re no longer dependent on your weekly wage to make ends meet.

Until that time, you’re never truly free, because you’re always at the mercy of your creditors, your employer, or the economy.

We’re hardwired to be negative

One of the reasons we tend to focus on the bad things and pay less attention to all the good that is happening around us is that human beings are biologically predisposed toward negative thinking. The negativity bias is a well-studied and heavily documented phenomenon with implications for nearly every aspect of our lives. Our tendency to pay more attention to bad things and overlook good things is likely a result of evolution.

Earlier in human history, paying attention to bad, dangerous, and negative threats in the world was literally a matter of life and death. Those who were more attuned to danger and who paid more attention to the bad things around them were more likely to survive.

This meant they were also more likely to hand down the genes that made them more attentive to danger. While we may no longer need to be on constant high-alert as our early ancestors needed to be in order to survive, the negativity bias still has a starring role in how our brains operate.

Research has shown that negative bias can have a wide variety of effects on how people think, respond, and feel. Some of the everyday areas where you might feel the results of this bias include in your relationships, decision-making, and the way you perceive people.

Of course, the natural next question is: How can we overcome this tendency toward negativity?

Because we are hardwired to respond with fear to any potential negative outcome, we often feel inundated with anxiety, especially in the age of the internet and information overload. Understanding your biases is the first step in overcoming them. Then an attitude of gratitude goes a long way to appreciating how good your life really is.

Mindset is everything

A look at some of the most successful people on the planet quickly reveals that mindset is everything.

Mark Zuckerberg’s wardrobe is made up almost entirely of jeans, hoodies and t-shirts, while Warren Buffet still lives in the house he bought in 1958 for $31,000. Becoming financially free isn’t about having the best of everything – it’s about making sacrifices in some areas so that you’re able to splurge on the things that really matter to you.

So, instead of buying the latest and greatest car, clothing or gadget to fit into our consumer society, why not try running your own race?

Take coffee from home and funnel that $5 or $10 a day into your mortgage, so you can be debt-free sooner.

Postpone upgrading your car so you can afford to take days off to volunteer at your kids’ school, making priceless memories. Make do and mend your wardrobe, freeing up valuable cash for an investment property or share portfolio.

Doing these things once or twice won’t seem to make a dent, but adopt them as lifelong habits and you’ll be amazed at the different they can make.

It’s called delayed gratification

Then follow these three simple steps to financial freedom:

  1. Spend less than you earn (otherwise you’ll always owe money.)
  2. Save and invest wisely in income producing growth assets like residential real estate.
  3. Reinvest your money and use compounding and leverage to grow your asset base until you have a cash machine.

Now don’t underestimate the importance of this simple message.

Keep your eye on the prize, the big picture, long-term goals you want to achieve. It could be private school for the kids, early retirement, or a sea-change for a life less complicated. Every little step you take towards that dream is progress, even if it doesn’t seem that way at the time.

But one day, you’ll wake up and realise you’ve made it… and it will all be totally worth it.

LatestMichael Yardney blogMichael Yardney’s Commentary



Talking about our local Central Coast Property Market recovery

You can really only purchase what is available for sale!

One of the major reasons why transaction volumes remain so low in our area is because there is very little actually available for sale. What becomes quite clear from the data is that when values are declining, sales volumes typically fall and increasing values typically leads to higher volumes.

What is also evident is that the market doesn’t respond immediately, when values start rising (initially at least) and it isn’t necessarily occurring in concert with a rise in sales volumes.

The number of new listings nationally (new listings are anything not previously advertised for sale over the past 6 months) are the lowest they’ve been at this time of year for many years and are lower than they were last year. As housing market conditions have softened, vendors have become much more selective about which properties are appropriate to be taken to auction versus sale.

This sentiment is echoed by local  Central Coast agents for both homes and vacant land, although all are optimistic for a busy Spring market and are already seeing a rise in enquiry. Ultimately, you can only transact that which is actually available for sale and at this point there is not a lot of quality, varied stock on offer.

Here at Yeramba Estates we see the improving trend to be quite real as earthworks begin on another subdivision at Hamlyn Terrace. Talk to us now to receive a preview of our new land  release becoming available soon.

Non Bank Lenders emerging to help new home owners

Tighter lending standards introduced after the Royal Commission have put banks under the spotlight. This, as well as efforts by the Australian Prudential Regulation Authority (APRA) to slow growth to investment lending, have made it difficult for borrowers to get a home loan.

This crackdown is in place to reduce the likelihood of customers defaulting on their loans, but it’s also made it harder for people to secure a loan with the major banks. This has pushed many towards a smaller or a non-bank lender.

These boutique (or non-major) lenders have rushed to fill the value-gap left by the big banks, and they’ve now grown to hold a 41% of the mortgage market share1. So, why are so many Aussie borrowers jumping ship for smaller lenders?

In the aftermath of the Royal Commission, the big four banks have tightened up their lending standards and are especially conservative when determining loan serviceability at the moment. It is estimated that one in two loans fail to proceed to settlement, which is the lowest conversion rate seen in over a decade.

In the past, the big banks have enjoyed rising property prices and relied on estimates for calculating a borrowers serviceability, including HEM living expenses, income and high interest rate buffers. However, the recent Royal Commission has caused regulators and risk professionals to question their practices.

Banks are making a rapid switch to actual living expenses shown in applicants banks statements, while maintaining income and high interest rate buffers. Actual living expenses are usually a lot higher than the minimum HEM living expenses provision, and don’t take into consideration that borrowers are likely to change their spending habits once they have purchased a property.

However, as the market diversifies, more borrowers are realising that they have a wide range of choice when it comes to their lender. Even if you find yourself rejected from a major bank, the right loan terms for you might just be a new lender away.

Boutique lenders also aren’t experiencing the same backlash as the major banks, and therefore haven’t tightened their standards in the same aggressive manner. This is why they may be able to offer higher loan amounts and even non-traditional loans like low-documentation or low-deposit loans.


Yeramba – supporting our locals at Hamlyn Terrace

Over the years Lisa, from Hamlyn Terrace had achieved all in the corporate world, and after accomplishing her career goals, she simply had enough of being stuck in the office working crazy hours. And we all know this usually means missing out on spending quality time with family and friends.

So after leaving Sydney to embark on a sea change to the wonderful Central Coast – Lisa hasn’t looked back!

Lisa told us: “With all this time on my hands, I quickly rediscovered my love for art and appreciation of all things beautiful. I was happier again, finally getting my groove back and enjoying getting my hands dirty with being creative.”

“I’ve always loved wearing statement jewellery pieces and I suppose it was my way of sneaking in a splash of colour, showing off my creative side even when dressed in those stuffy office suits! So when I came across Indigo Isla, with their unique and handmade designs, I knew I had to come on board and bring these beautiful pieces of jewellery to my friends and family.

LEONE Projects & Designs was born. LEONE is so special to me as created with the initials of my gorgeous family, reminding me everyday that without them, I wouldn’t be the strong woman I am today.

I look forward to sharing these beautiful pieces of jewellery with all of you.”

See @leoneprojectanddesigns on facebook

Time to buy a new block of land

Do you want to have greater input into the design of your home? Then building a new home – one that will suit the needs of you and your family – is the way to go! However, before you start drafting up plans, you’ll need some dirt to put it on. It’s time to buy a block of land.

Blocks of land literally come in all sizes. Today we are discussing house blocks in new residential subdivisions like Hamlyn Grove by Yeramba, that have all the services ready to be connected, from water and electricity to fibre-to-the-home Internet.

Blocks of land come in all shapes. There are square and rectangular blocks, corner blocks, battle-axe blocks and blocks with no street frontage and a long driveway for access. There are flat blocks, steep blocks, sloped blocks, blocks with cliffs, blocks set down from the road and blocks set above the road. There are low-lying blocks and blocks with waterways nearby. There are blocks that face north-south or east-west, blocks that are in the lee of a hill and ones which fully face the weather.

Each shape and size will present challenges for the design of your home. If the block you are looking at is rectangular, flat, with full street frontage, in a flood-free area away from bushland and without trees, with access to all services in a new or existing residential sub-division, and with stable soil without rocks then congratulations. It sounds like a Yeramba lot.

If the block you are looking at has some of the other features mentioned above then you’ll need to carefully evaluate how they will impact the design and cost of construction.

Some factors worth noting are:

  • Soil: You should consider having a soil test performed by a qualified engineer before you buy land. The cost of building your house’s foundations can ultimately depend on the type of soil that it’s built on. The type of soil that your property is situated on can incur extra costs for earthworks and land retention, so have the soil classified according to the Australian Standard 2870ii,iii.
  • Steepness: The steepness of the land must also be considered since steeper land is likely to be more costly to build upon.
  • Utilities: Contact utility companies to check the cost of connecting your block of land to water, gas and electricity if the service connections are not included.
  • Orientation: Land with a north-facing alignment and a backyard can reduce your energy bills. This is because north-facing rooms are able to maximise the amount of sunlight received during winter and minimise sunlight exposure during the warmer monthsv. This will mean your future house is naturally warmer in the winter and cooler in the summer, saving you money on heating and cooling costs.
  • Trees: There may be restrictions on removing trees that could prove expensive.

Don’t forget location

Choosing land close to services such as shops, parks and schools can save you travel time, but be aware of issues like noise pollution. A better location might not offer your ideal piece of land or desired price, but can be worth it if you are able to walk or cycle to shops, schools and public transport, making life easier and healthier.

As important as proximity to services are, there are some location issues it is important to be very aware of as they may impact your ability to obtain finance and insurance,  restrict the type and design of house you can build, and increase construction costs.

If your land is situated near a heavily timbered area or one with a history of previous bushfires, the blocks may have a BAL (Bushfire Attack Level) rating. To find out if your land is in a bushfire prone area, contact your local council and ask to view your local bushfire-prone land map. In bushfire prone areas bushfire construction codes may have to be complied with, adding to cost.

Land use will also be limited by council or state government planning controls. Things to look for include required setback from boundaries, shadow rules, height restrictions, floor space ratios (FSR), open space requirements, and minimum block size.

Yeramba Estates, developers of quality land for over 50 years, have a reputation for excellence. We are here to help, and can assist as you travel through the process.


Housing affordability is the best it’s been in 20 years according to the HIA

House prices may be high, but the combination of lower home prices, improvements in wage growth and lower interest rates have contributed to the ongoing improvement in the HIA Affordability Index for the June 2019 quarter.

HIA’s Affordability Index is calculated for each of the eight capital cities and regional areas on a quarterly basis and takes into account the latest dwelling prices, mortgage interest rates and wage developments.

For a home buyer with an average income purchasing a median priced dwelling (assuming a 10 per cent deposit), mortgage repayments will consume the smallest proportion of their earnings since 1999.

The main reason the HIA Affordability Index today is comparable with the level in 1999, despite house prices rising significantly faster than incomes, is that interest rates are 4.6 per cent today compared with 6.7 per cent in 1999.

Average earnings have increased by 113 per cent over the 20 years to 2019, while the median home price has increased by 228 per cent but the lower interest rates have kept the cost of servicing a loan the same.

There are also a number of initiatives that do not feed into this Affordability Index that will assist with first home buyers entering the market.

The reduction in income tax, the easing of APRA restrictions on mortgage lending and the Australian government’s First Home Loan Deposit Scheme are likely to be important considerations for households.

With thanks to Michael Yardney from Metropole Property Strategists

Yeramba customers can take advantage of the current market

When prices are low first home buyers, and even second home buyers, will find they get better value and their money will go a lot further than it would have 12 months ago.

It’s clear that now is a good the time for home buyers to secure their future home; however it won’t last long.

The transient nature of the property market will see house prices stabilise later this year, and likely start to increase in early 2020. 

Yeramba Estates will soon release another prized stage of Hamlyn Grove, with settlement planned for June 2020. For a 10% deposit, our clients can secure a lot with the comfort of knowing their new home project is within a quality estate, and can plan accordingly for a settlement in mid 2020.

Contact us now to join our database – you will receive early notice of Hamlyn Grove Stage 5 release and be among the first to choose from these new lots.

Lots will start from $335,000 *, with sizes from 469sqm and 488sqm up to 963sqm.

*Pricing to be confirmed at time of release

Water bills will fall for most Coasties

Central Coast water bills will fall by up to 33 per cent for some residents – a saving of up to $355 – after the pricing regulator released its final report.

The Independent Pricing and Regulatory Tribunal (IPART) released its report on the maximum prices Central Coast Council can charge for water, sewerage and stormwater services, with the final figures slightly lower than those proposed in the draft report in April.

IPART’s decision means typical household bills will fall by 14 per cent to 33 per cent from July 1 and then only increase with inflation the following two years.

It also includes a slightly lower $103 cap, in real terms, for residential and farm stormwater prices.

The annual water, sewerage and stormwater bill for a typical household in the former Wyong council area will fall by $169, according to IPART Chair, Dr Paul Paterson.

Excerpt from Central Coast Express Advocate story by Richard Noone on 30 May 2019