Working from home can save $280 a month: What you've missed

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One bank dominates the home loan market, 0.99% Green Loan launched, and working from home can save $280 monthly.

Here are five things you may have missed this week.

Small lenders fight for just 9% of home loan market

working from home saves money

Australia's home loan market isn't as competitive as we'd like to think.

Analysis by Savvy shows the Commonwealth Bank dominates the market, accounting for over one in four (26%) of the nation's home loans - that's a mammoth $308 billion worth of owner occupied home loans plus $159 billion of investment property mortgages.

The rest of the Big Four - ANZ, NAB, and Westpac share 51% of the market.

Second tier banks including ING, Macquarie Bank and Bendigo all have more petite market shares of around 2% each, leaving dozens of non-bank or smaller lenders to fight it out for less than 9% of the overall market.

Our preference for big bank home loans could be costing us.

CommBank's lowest home loan rate is 2.19%. However, a number of smaller lenders have variable rates that start with a '1' including Loans.com.au (1.85%), Reduce Home Loans (1.79%) and Nano (1.99%).

It's been more than a decade since banks were banned from charging exit fees on variable rate home loans. "This theoretically encouraged Australians to refinance their home loans with more competitive lenders - but it hasn't really happened," says Savvy CEO Bill Tsouvalas.

Green renos rewarded with lower rate

CommBank has joined a growing line-up of lenders offering low rate loans for renovators and builders aiming to reduce their eco-footprint.

CommBank's new Green Loan has an ultra-low rate of 0.99% fixed for 10 years. It's available to eligible CommBank home loan customers who buy and install clean energy products such as solar panels, battery packs and solar hot water systems.

Other green loan providers include Gateway Bank, Community First Credit Union and Bank Australia.

Building or renovating to achieve eco-efficiency doesn't just support the planet. The Climate Council says making buildings more energy efficient can directly save homeowners an average of $450 annually on heating and cooling costs.

Returning to the office could blow the family budget

Working from home during COVID may have come with a few challenges (like deciding whether trackie dacks were acceptable for Zoom meetings), but it also dished up savings.

Analysis by Compare the Market shows employees who continue to work from home could save hundreds of dollars each month compared to colleagues who travel to the office for work.

Heading into the office can cost around $111 weekly if you commute by public transport - substantially more if you drive to work.

Compare the Market's Chris Ford, says "You could easily fork out $70 a week if you bought takeaway coffee every day and treated yourself to lunch out. Over a month, that's around $280, which could fund a weekend getaway, pay an electricity bill or go towards your savings."

Ford adds, "While working from home does have an impact on household bills, it's usually minimal compared to working from an office."

Climate change could leave 1 in 25 homes uninsurable

The Climate Council of Australia is warning that one in 25 Australian properties will be effectively uninsurable by 2030 due to rising risks of extreme weather and climate change.

Within Australia's top 10 electorates most at-risk of climate impacts, one in seven homes could become insurable.

The three most at-risk electorates across Australia are:

  • Nicholls in Victoria, which includes Shepparton: 27% or 25,801 properties 
  • Richmond, which covers northern NSW including Ballina and Byron Bay: 20% or 22,274 properties 
  • Maranoa in southwest QLD: 15% or 9,551 properties 

The Climate Council has developed a new interactive Climate Risk Map. It lets homeowners plug in their suburb, local government area or electorate to discover the risk of fires, floods and extreme wind, based on various emissions scenarios.

Farmland values jump by up to 36%

Maybe the tree-changers are onto something. If you own a few lazy acres in the bush, chances are you're sitting on a goldmine.

The latest Rural Bank Australian Farmland Values report says growth in farmland values skyrocketed through 2021 with new record prices being set thanks to surging in demand.

Rural Bank's general manager of sales partnerships and marketing, Simon Dundon says demand from family farmers, life-stylers, tree-changers and even corporate buyers has fuelled competition for rural acreage.

As a guide to the strength of demand for farming properties, last year saw 10.8 million hectares of farmland change hands - an area larger than a country the size of Portugal.

This pushed up the median price per hectare by 20% to $7,087 per hectare - the largest year-on-year increase in dollar terms in the last 27 years.

Western Australia topped the leaderboard for 2021, recording a 36.3% increase in the price per hectare of farmland.

The report notes that farmland values have outperformed the Aussie shares over the last 20 years, achieving a compound annual growth rate of 8.4% compared to 4.0% for the ASX 200.

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A former Chartered Accountant, Nicola Field has been a regular contributor to Money for 20 years, and writes on personal finance issues for some of Australia's largest financial institutions. She is the author of Investing in Your Child's Future and Baby or Bust, and has collaborated with Paul Clitheroe on a variety of projects including radio scripts, newspaper columns, and several books.
Comments
C Wilson
May 7, 2022 8.17am

I can attest to the savings from working from home. I contributed significantly to a home deposit and bought an apartment because I wasn't wasting money on transport. And I was making better use of the food in my fridge.

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