Investing in Property: What this property boom really teaches us…

March 8, 2021

Not long ago, regulators’ forced banks to cut back on investment loans. That period has passed, and this presents a new opportunity for investors.

If you are 30 and buying for the first time, if you are 40 and shifting house, if you are 50 and know you need to invest – there are two typical responses in these times that I shall call a “property boom”.

  • “I need to buy now, or I’ll miss out” – FOMO
  • “The market is crazy; I’ll wait until it crashes” – It never does.

Hidden in current headlines is “Feb 2021 – largest rise in house price in 20 years.”

In other words, this has happened before and will happen again.

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Rates in 2021

February 3, 2021

Banks and Commentators alike are saying this week; “The next move on rates is UP – You must lock in now!”

What complete twaddle! (Commentators are back at work after the holidays and feel the need to say something to start the year, banks however, are saying things out of complete self-interest).

I only listen to the person with the RED Rate Button on their desk.

That person is the Chair of The Reserve Bank.

In Yesterday’s Minutes – where rates were left on hold, he SAID…

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Property Bloodbath…Journalists do love a headline…

February 3, 2021

Last year when Covid hit there were predictions of gloom and doom for property – and they were well founded to an extent… BUT… Two things altered the course of events.

  • The Government intervened with Jobkeeper to cushion the blow of Covid Lockdowns.
  • The Reserve Bank intervened by dramatically cutting Interest Rates and stating that they will stay low until at least 2023.

I have heard so many predictions of property falling into the abyss over the years.

Just to name a few:

House price collapse: 25 Jan 2014

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Best Interest Duty

December 10, 2020

On January 1st new legislation for brokers comes into play – it is called Best Interest Duty.

So, how do you actually find a broker who will act in your best interests?

It is a sad comment on an industry of which I have been a part for 23 years, with multiple awards in that time, that a Royal Commission highlighted the need for legislation to compel brokers to do what should be integral to their ethos.

In general, people act out of self-interest and there is nothing wrong with that.

If I did not get paid, I would not be a broker.

The problem is not self-interest, but that when conflict arises between a client’s best interests and the broker’s, that a broker may act by putting their own needs above the clients.

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Rates – Where to?

November 5, 2020

As of Tuesday, the Reserve Bank Cash Rate is at 0.1%, The Reserve Bank also announced it will buy Australian Govt 3, 5 and 10 year bonds to keep them at their desired target of 0.1%.

So, if banks can be profitable with an interest rate margin of 1.8%-2.2% – then your home loan rate should be 1.9% to 2.3%.

However, with Covid loan losses that banks are having to provision for, it means that we aren’t at these low levels yet – but this is where they are going.

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House Price Leads the Way to Recovery

November 4, 2020

Yes – you heard that correctly.

Since January this year only Melbourne and Perth house price trends are negative.

Sydney – up 1.8%

Brisbane – up 2.1%

Adelaide – up 3%

Melbourne and Perth have their own temporary Covid issues.

The interest rate on your home loan should now be well into the 2’s – and will head lower in coming months.

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Further Rate Reductions on the Way

August 20, 2020

As I suggested back in June, rate reductions are starting to flow through to new borrower deals.

This is good news for my own existing clients because I review;

  • Every loan
  • Every Client
  • Every 6 months
  • And where a reduction is possible seek that on your behalf

You will start to see these reductions flowing through to your loan in your next review.

As you know, I seek written agreements with any bank that wants my new business. Namely that they agree to price my existing business in keeping with new offers whenever I make a request.

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So Where Are Rates Headed?

June 9, 2020

This morning as I was sitting down to write on the (immediate and medium) future of interest rates, knowing that they are poised to head down again – two clients of long standing emailed me.

One wrote to me – tongue in cheek;

I know (how much) you “adore” fixed interest rates, not, but now, locking part or all of a home loan in at these ever so low interest rates needs to be considered?

I still remember the painful 14% home loan interest rates.

Looking forward to your opinion in regard to this matter.”

Surely with rates now under 3%, surely with banks offering fixed rates in the mid 2%’s – SURELY it must now be time to fix … Surely!!

The best time to fix is still never.

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10 Financial Tips to survive Covid-19

April 28, 2020
  • Consolidate your finances. We often keep lots of accounts, with small amounts of money in them – if you have repayments for loans, and are concerned that you may be short of funds, round up those small accounts and put them all into the account that repayments are debited from.
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It’s Raining

March 31, 2020

If you’ve saved for a rainy day… It’s raining.

These are the guidelines you should follow for your home loan or your investment loan – if you find yourself in difficulty.

Depending on the level of difficulty you face, these are the steps you should follow… in order;

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