Sunday, May 15, 2022
Housing Affordability Crashes!
The latest report on Housing Affordability from ANZ and Corelogic underscores the pressures on Households, and mirrors findings from our own Stress Surveys.
On every metric, affordability has crashed, but then what do you expect from 20+ years of bad policy, ultra low rates and Government incentives? And, no, the answer to all this is not just of offer more incentives to drag people into the market at these high multiples!
Today's post is brought to you by Ribbon Property Consultants.
If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.
Buying property, is both challenging and adversarial. The vendor has a professional on their side.
Emotions run high - price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.
Wednesday, May 11, 2022
Monday, May 9, 2022
Interest rate rises and the property market, my two cents.
The RBA has increased rates for the first time in more than 11 years. That’s significant because as the RBA says itself, many households have never experienced rising interest rates. They’re also going to go up further, likely in the next few months. Before we panic though, let’s get some context.
As a guide, if you have a $500,000 principal and interest home loan at a rate of 2.29% p.a. on a 30-year loan term, your repayments were $1,922 a month.
When the bank passes on this 0.25% increase, you’ll pay $1,987 a month. If we tweak it all the way to a 0.75% rate increase, it’s $2,119 a month. To put it another way, the homeowner will need to find another $197 a month or say $46 bucks a week.
I say context, because for most people it’s a manageable increase that’s well within their ability to negotiate with tweaks to discretional spending.
The RBA are beginning “the process of normalising monetary conditions.” That should be a reminder that interest rates are currently not normal, they’re historically low.
I don’t doubt that this new trajectory for rates will spook property buyers and cool some of the demand, but for those with capacity willing to ignore the herd, I believe there will be plenty of opportunities to buy well in the next 12 months and see capital growth.
Rates are going up because the economy is doing well. That’s a positive thing. Sticking with the positive narrative, many mortgage holders will have continued to pay the same interest rate as rates were dropping over the last few years. On top of this, and according to the AFR in late April, residential property borrowers have squirrelled away a record $232 billion in offset accounts – an increase of nearly 15 per cent, or $30 billion – in the past 12 months to reduce their interest payments and shorten loan terms.
The main driver of higher inflation has been global interruptions to supply chains and Russia’s invasion of Ukraine has resulted in sharp increases in the prices of oil and gas, base metals and many agricultural commodities. The outcome of this conflict and the economic impacts are hard to predict.
Nationally, strong demand is putting pressure on capacity and firms are struggling to hire and retain workers. These increases in costs are resulting in price increases being passed onto consumers.
Interest rate rises will likely be slow and measured over the next 12-24 months in my view. There’s no desperate desire to be back within the 2-3 per cent target band within the next few months. The RBA expects inflation to start moderating as some of the supply disruptions are resolved and/or as prices settle at a higher level. They state that for inflation to stay high, prices need to keep increasing at a fast rate, not only settle at a high level.
I feel for the households that will struggle with another kick to their cost-of-living pressures, but most people are not over-extended, and their serviceability has been tested well over and above where we’re likely to land. Despite what may be presented in the media, there’s not going to be a property price crash and the 4 horsemen of the apocalypse will have another gap year.
Tuesday, May 3, 2022
Northlakes Landlord and Vendor Five Star Review
#five #star #landlord 爱你的#vendor #热播的An Excellent Family Business
As a landlord I have had Linda and Carlos manage my investment properties since 2003. The fact that I have stayed with them so long is testimony to the great service they have provided me over this 19 year period. During the recent sale of my property at North Lakes the service and support both Linda and Carlos provided me was typical of the high standard I was use to - achieving an excellent sales result in the process. I have found both Linda and Carlos to be honest, straight talking with a high degree of integrity which are traits very rarely found with realestate agents I have dealt with in the past. Due to my long association with Linda and Carlos I have found that I am treated more like an extended family member than a client and I feel privileged to be associated with them. https://www.ratemyagent.com.au/real-estate-agent/linda-debello/reviews/7-samson-street-north-lakes-ab1y75
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