What Changed for Variable Rate Borrowers This Week?
CBA, NAB, Westpac and ANZ lifted variable home loan rates by 0.25 percentage points from 9 October, passing on the RBA’s increase to 4.60% in full, and more than 40 lenders across the market have now done the same Australian Broker. The lowest owner-occupier variable rates at the majors are now 6.24% at Westpac, 6.29% at NAB, 6.34% at CBA and 6.50% at ANZ.
Fixed rates kept climbing too. ANZ lifted fixed rates for the second time in just over three weeks, taking its one-year rate from 6.49% to 6.69%, while CBA and Westpac have raised fixed rates by up to 0.48 and 0.45 percentage points respectively over the same period. Forecasts for the next move are split: ANZ and Westpac expect another rise in November to 4.85%, while CBA and NAB expect 4.60% to be the peak.
Lenders must give notice before repayments change, at least 20 days at CBA and at least 30 days at the other majors, so many borrowers will not see the higher repayment until November. Anyone finding the increase difficult can speak to their lender about hardship options, and the free National Debt Helpline on 1800 007 007 connects people with a financial counsellor.
How Did Households React to the September Rate Rise?
The Westpac-Melbourne Institute Consumer Sentiment Index fell 4.7% to 80.4 in October, with the survey spanning the RBA decision Australian Broker. Responses collected before the decision averaged 86.9, and those collected afterwards averaged 67.2. Westpac’s Matthew Hassan said “Australian consumers remain stuck in a cost-of-living nightmare that seems to have no end in sight.”
Just over 80% of respondents expect mortgage rates to rise over the next year, up from 63% a month earlier, and close to 90% of mortgage holders share that view. The time to buy a dwelling index lifted 3.4% to 88.4, led by outright home owners, retirees and higher-income households, which suggests some buyers with strong finances see opportunity in a softer market. Hassan said a follow-up rate rise at the RBA’s 2 to 3 November meeting is likely.
Why Are Auction Results and Listings Pointing Down?
The preliminary capital city clearance rate fell to 48.2% across 1,223 auctions last weekend, the lowest since late June, and the final figure was revised down to 45.4% Cotality. Brisbane recorded a preliminary clearance rate of just 25.6%, the weakest of the major capitals.
Stock is building as sales slow. SQM Research counted 276,839 homes listed for sale in September, 21.6% more than a year earlier, and distressed listings rose 29.2% to 4,872 Australian Broker. Brisbane listings were up 43.5% on a year ago, the sharpest rise of any capital. Managing director Louis Christopher said “that’s a demand problem, not a supply surge,” and noted distressed numbers remain contained in absolute terms.
Are Rents Still Rising as Vacancies Increase?
The national median advertised rent reached a record $675 a week in the September quarter, up 1.5% over the quarter and 5.5% over the year, according to realestate.com.au’s latest rental report Australian Broker. The national vacancy rate rose to 1.5% from 1.3% in June, the highest in more than four years. Sydney remains the most expensive capital at $800 a week, while Darwin rents rose fastest, up 13.8% to $740.
Quarterly rent growth has slowed from 2.3% in the June quarter, a sign that affordability limits are starting to cap increases in some markets. For investors, the combination of record rents and falling values has lifted gross yields, although higher interest costs mean most properties remain cash flow negative.
Which Lenders Now Offer Help to Buy?
Queensland Country Bank has joined the federal Help to Buy lender panel, offering the shared equity scheme through both its retail and broker channels Australian Broker. It is the second lender added since CBA and Bank Australia formed the original panel, following Teachers Mutual Bank, whose first group of brokers completed training this month.
How does the Help to Buy scheme work?
Help to Buy lets eligible buyers purchase with a deposit of as little as 2%, with the government contributing an equity share of up to 40% for new homes or 30% for existing homes. There are no regular repayments on the government’s share, which can be bought back over time or repaid when the home is sold. Income caps are $103,000 for individuals and $165,000 for joint applicants, price caps vary by location, and up to 10,000 places are available each year. The shared ownership has long-term implications, so it suits some first home buyers more than others.
Key Takeaways
- •All four major banks lifted variable rates by 0.25 percentage points from 9 October, and more than 40 lenders have passed on the full rise.
- •ANZ and Westpac expect another rise to 4.85% in November, while CBA and NAB expect 4.60% to be the peak.
- •Consumer sentiment fell to 80.4, and responses after the RBA decision averaged 67.2.
- •The preliminary clearance rate fell to 48.2%, and distressed listings rose 29.2% on a year earlier.
- •The national median advertised rent hit a record $675 a week, although quarterly rent growth slowed to 1.5%.
- •Queensland Country Bank has joined the Help to Buy panel, offering the 2% deposit scheme through brokers.