The scene is now set for the rest of 2019.
I give credit to the Reserve Bank and the Government for pre-empting.
The Reserve Bank cut rates by 0.5% (0.4% of which was passed through) and the Government passed tax cuts through to everyone.
What was the background? The two big ticket items – Brexit and the US China Trade War.
Read more
Anyone can read in the media that The Reserve Bank cut the cash rate yesterday.
I always endeavour to let you know what this means – so that you can plan ahead.
In July 2016 – almost 10 years after the GFC, interest rates had been low for a decade, there was a growing sentiment that they would inevitably rise – which always makes people worry.
I like to take notice of the people who have the RED (rates) button on their desk so back in 2016 I read an article from Janet Yelland (the outgoing chair of the US Federal Reserve) who had just told Congress that rates would stay low for ANOTHER decade – yes until 2025.
Read more
The current market mood was caused by negative Government intervention to suppress buyer demand and also the election itself.
Sentiment has changed post-election and now positive Government intervention brings good news again for buyers.
There are 4 key areas that signal this.
We had an election where one of the choices we had to make, in relation to housing, allowed one generation in the population to benefit only at the expense of others.
What we chose instead though is to the benefit of every generation – yes that is possible.
First Home Buyers are the BIGGEST winners.
The cash deposit required has been the largest hurdle for them to overcome. Until now First Home Buyers have needed to find 5% of purchase price PLUS costs to get those keys to the front door. Mortgage Insurance (of around 3.5%) was the biggest cost. On a $500k purchase – this meant they had to find $42,500.
This is an area of lending that is about to change markedly, and it impacts on how much money you need to buy your first home. (in a good way!!)
This is where we are right now – 95% loans are all about the treatment of Mortgage Insurance. (A one-off premium to protect the lender’s position, approximately 3.5%)
1. Lenders require YOU to pay all of the mortgage insurance (MI) from your money – so their loans are still 95%.
Costs vary from state to state – but let’s look at a $500k purchase in Qld where a first home buyer pays no stamp duty; Costs will then be approx. $2,500 and are inclusive of things like Solicitor, settlement and government fees. (I can explain these all in more detail, for your particular circumstance, if you “Ask Alan”).
Read more
Here are three truths;
1. If you own a house, then you hope prices go up.
2. If you are in the market to buy a house, then you want prices to come down.
3. 5 minutes after you buy that house, you hope prices go up.
Hence – everyone who owns or hopes to own a house hopes that prices go up.
Before I start – let’s make sure we acknowledge the needs of the five main age groups in Australia;
Read more
According to Macquarie Bank chief economist two rate cuts are fully priced into the current market. (The Australian p 17 Apr 30th)
Fixed interest rates typically indicate where Variable interest rates are headed – they are the “canary in the coal mine”.
Read more
In the upcoming election there is a policy divide between the parties over “negative gearing” which if one side wins, will only be able to be applied to brand new property.
To help you make sense of this let’s look at the whole issue – what Negative Gearing is and why it matters.
Read more
Property is still the Pot of Gold at the end of the Rainbow.
With all the current negative talk about property, buyers have left the market. Listings are at all-time highs. This is what makes a Buyers’ Market.
Better still, Markets are now pricing in a rate cut in the next 12 months. In fact, Bill Evans (Westpac Chief Economist) goes further, and anticipates two rate cuts this year in August and November (Bill Evans, AFR Tuesday 04 March 2019). Watch Bill Evans’ comments in the video below.
Read more
For the second blog in my Construction series, I look at the simple home renovation.
I have helped many of my clients turn the simple renovation into two things;
These are their real renovation stories (used with permission, thank you to all who have let me share your inspiring stories!)
Read more