Mortgage 'loyalty tax' rises | Property listings trending up | Twelve Grains Capital

You might not realise that lenders often charge lower interest rates to new borrowers compared to existing customers. Over the past year, as the graph from the Reserve Bank of Australia shows, this gap has widened.

Back in October 2020, owner-occupiers who took out new variable loans were charged, on average, 0.32 percentage points less than existing borrowers. By October 2021, this gap had grown to 0.37 percentage points. If the RBA increases the cash rate next year, as many economists predict, it will be interesting to see if this gap widens or narrows as lenders bid to undercut their rivals and grab more market share. Want a better rate? Get in touch

More property listings are coming onto the market, which should give buyers more choice in 2022. In November, another 96,346 properties were listed for sale, according to SQM Research. This was 2.3% higher than the month before and 20.4% higher than the year before. As the charts show, while there’s been a significant increase in new listings, there’s been a big decrease in old listings. That suggests many of these homes have finally found buyers.

If buyers have more properties to choose from in 2022, it’s likely homes will take longer to sell. Properties listed on during November took an average of 30 days to sell, which is incredibly low by historical standards. The year before, the figure was 44 days. In November, the amount of new listings added to reached their “highest level in a decade" for capital cities and "highest level in five years" for regional locations.

An extra 4,651 first home buyers will be able to access federal government assistance during the 2021-22 financial year. The government had originally pledged to support 20,000 first home buyers this year – 10,000 under the First Home Loan Deposit Scheme and 10,000 under the New Home Guarantee. Now, the government has added an extra 4,651 places, which went unused during the 2020-21 financial year. The First Home Loan Deposit Scheme lets eligible first home buyers purchase a home with just a 5% deposit, without having to pay lender’s mortgage insurance. The New Home Guarantee is almost identical, except it applies to new builds, off-the-plan properties and house-and-land packages. The government hasn’t stipulated where the extra 4,651 places will be allocated, but it seems likely they will be spread over both programs, based on demand. If you or anyone you know is looking to buy their f