SPONSORED: Provide general practitioners with easier, faster and more profitable access to the residential real estate market.

The value of residential properties has increased 20.3% in the past 12 months.

To provide GPs with easier, faster and more cost effective access to the residential real estate market, CommBank recently introduced a new loan package for healthcare professionals.

“The vital role GPs play in Australian communities has become evident over the past 18 months,” said Albert Naffah, CEO of CommBank Health.

“We want to actively support practitioners in every way possible, whether it’s personally when they buy a home, access funding to establish or grow their practice, or improve the patient experience through payments and claims processing.” digital.

“When it comes to home loans, we understand that doctors are part of a growing industry and they have a job for life. As such, we have developed a specific offer allowing eligible general practitioners to access real estate or investment property loans up to an LVR of 95% [loan-to-value ratio] and without mortgage insurance from lenders.

“GPs are also some of the busiest professionals in Australia right now, so our offering is designed to simplify the process and save them a lot of time to allow them to focus on what they really love to do. “

In the short to medium term, CommBank will be the first bank to take advantage of open banking to, after receiving consent, collect and analyze information from other financial institutions required when taking out a loan.

“We intend to use technology to reduce approval times and remove friction and administration from the application process, allowing GPs to focus on what really matters – well-being. of their patients, ”Mr. Naffah said.

Inordinate growth of premium properties
Growth in Australian residential property values ​​shows little sign of slowing down after experiencing disproportionate growth over the past 12 months. During this period, data from the September CoreLogic report shows that residential property values ​​rose 20.3%, the highest level of capital appreciation since 1989.

While most properties have benefited from a rising market, upscale Australian homes are leading the growth. Data shows that in the three months leading up to September, the top 25 percent of homes in value appreciated faster than the bottom 25 percent in all capital cities.

The increase in home values ​​nationwide is largely a consequence of demand exceeding supply.

“There are far fewer properties coming onto the market than there are enthusiastic buyers. It’s even more pronounced for high-end properties, ”said Chris Moldrich, Commonwealth Bank Managing Director, Business Home Lending.

“We have seen the weather in the market continue to decline as properties are trading quickly and the number of advertisements is down significantly from last year.

“However, with a significant easing of restrictions in Australia’s two most populous states, there is a good chance that the comfort level for sellers will increase and sellers will return.”

A close examination of market fundamentals reveals a range of factors, which can help buyers navigate current and emerging conditions. Whether you are looking to buy a family home or an investment property, understanding this dynamic is crucial.

The great regional migration
One of the mega trends that the pandemic has accelerated is the movement of people from capital cities to regional areas. This has an impact on capital growth and rental yields for locations in demand.

The latest Regional Movers Index from CommBank and the Regional Australia Institute (RAI) tracks these migratory flows, showing that in the June 2021 quarter, the number of people moving from capitals to regions increased by 11% compared to the same. quarter in 2020.

In turn, high demand is exerting upward pressure on housing prices in regional locations. And with limited supply in the market, conditions should remain favorable for short-term sellers. This movement is also driving a wave of development to support demand and a growing population.

“As demand for housing strengthens in some regional destinations, we expect residential and industrial development to increase,” Moldrich said.

Capital growth squeezes returns
The strong appreciation in asset values ​​attracts the attention of real estate investors.

However, it also pushed average yields nationwide to a record low of 3.3%. While residential rents have risen over the past year, rising an average of almost 9%, they have lagged behind the rise in asset values.

With a particularly dynamic demand for housing in regional areas, rental prices have increased in these areas compared to the capital cities. Combining the capitals, rental growth has increased an average of 7.5% over the past 12 months. In contrast, regional areas experienced rental growth of 12.5% ​​during this period.

“Buyers need to consider whether they are focusing on capital growth or return and consider the different conditions depending on location and type of property,” said Moldrich.

“Our healthcare lending team responds to a growing number of requests from general practitioners seeking to better understand the areas in which they are looking to invest and the prospects for return.

“For example, currently units may attract a higher rental yield, but homes experience relatively greater capital growth.

“But while the value of units has not grown as quickly, the opening of borders and the associated increase in the number of buyers and foreign students may change what is important to consider.”

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