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February 27, 2013

Hitting the hipster market


I was chatting to a buyers’ agent recently about new trends in different buyer groups and he made an interesting prediction. When it comes to sniffing out the next big urban market, he reckons the key is to follow the hipsters.

BY SHANNON MOLLOY

You might find them lazing in an organic teahouse, bashing out their memoirs on a 60-year-old typewriter they found in an op shop. Or they might be attending some uber cool but very off-the-grid art or music festival in a disused warehouse in the middle of the day. Failing that, they’ll be riding around on a repurposed pushbike with a basket but no gears.

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February 22, 2013

The final piece of the puzzle has fallen into place


For much of last year, Australian housing markets were a ‘tug-of-war’ with low interest rates pulling hard on one end of the rope and poor consumer confidence at the other.

BY MICHAEL YARDNEY

Despite many of the fundamentals being sound, consumers were sitting on the sidelines waiting to see how the economy played out or perhaps for someone to ring the bell indicating that markets had bottomed.

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February 20, 2013

Metropolitan is back in favour with investors


For the past few years, property investors have been obsessed with mining towns. It’s understandable – the dizzying profits and yields on offer in resource-rich regional backwaters were pretty incredible. The accelerated development of major projects and ballooning workforces meant the going was pretty good.

BY SHANNON MOLLOY

Sure, fortunes have shifted in some industry-driven parts since those post-GFC glory days – Moranbah in the Bowen Basin region in central Queensland is a good example. However, for a long time it was those mining towns that presented one of the few success stories in properties.

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API Podcast – February 2013


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Podcast Transcript

Intro: Welcome to the monthly podcast of Australian Property Investor, Australia’s most trusted and widely-read property investment magazine. For information on how to subscribe to either our print or online magazine, as well as other great property investing information, please visit our website, www.apimagazine.com.au

Shannon Molloy (SM): Hello, I’m Shannon Molloy – deputy editor of Australian Property Investor magazine – and in this episode we’re talking all things home loans.

There’s no doubt it’s been a while since the going was this good for borrowers. For one, banks are sharing a smaller pool of potential customers, thanks to the GFC. So, needless to say, they’re increasingly keen to be competitive. Plus, the Reserve Bank has slashed interest rates several times in the past year or so. It looks like there’ll be a few more reductions across 2013.

But are you taking advantage of these ideal conditions? Could you be saving even more on your home loan? To find out, I’m joined by Loan Market mortgage broker Josh Bartlett. Josh, thanks for your time.

Josh Bartlet (JB): No problem at all.

SM: Tell me, how competitive is the mortgage market at the moment?

 JB: As far as a broker’s concerned, there are a lot of people out there looking at the moment. I’d suggest as far as brokers and bankers competing, we’re all starting to up our game as far as professionalism is concerned. We’re now realising we’re not back in 2009 or 2010 anymore. Our service levels need to jump to the next level to give customers what they need.

SM: What’s the best way a borrower can nab the lowest possible rate with a lender? Is it simply a case of asking for a better deal?

 JB: It’s a very interesting question. I often speak to a lot of clients who say they’re going to a CBA, Westpac of NAB. If they walk into a bank, I think they’re doing themselves an injustice. A lot of clients probably don’t realise what a broker does enough, to an extent.

As soon as I sit down and go through what we have on our panel – 30 to 40 different lenders, a whole lot of different packages and finding the best structure and rate for them – they start realising how beneficial we really are.

We can start looking at whether they want an offset account, a no-frills kind of product, interest only, principal and interest… that’s when we can start playing the banks off against each other.

It’s important to look at what banks are doing with discounts at the time. A lot of customers wouldn’t realise that at any one time some banks are discounting heavily because they’re trying to build their book.

Sitting down with a broker, it’s a great opportunity to find out which banks are discounting the highest.

 SM: There’s plenty to consider when it comes to loan features. What are some of the frills and are they worth it?

 JB: It depends on each client’s situation. If you’ve got a high disposable income, sometimes I like to sit down and talk about possibly having a package. A lot of banks charge an annual fee to have a package but sometimes it can benefit the client, depending on their income.

When you get a package you might get an offset account, credit cards available to you and different little niches available. A lot of the time, people don’t use it. If you’re not an investor or have a few different loans, sometimes it’s not worth it at all.

 SM: Opting to pay interest-only is popular with some investors. What are the risks and is it for everyone?

 JB: Look, definitely not. It sometimes comes down to chatting to your accountant to see if it’s beneficial. It comes down to each individual’s circumstances to see if there’s a negative gearing benefit there.

Other times, it comes down to generational preferences. Everyone has an opinion about what you should do. Old school investors, the older generation, they probably like to make sure their loan is being paid down all the time.

If you’re looking for a taxable advantage, I believe it might be better off to go down the interest-only path. Every single person’s situation is totally different. I like to go through options for customers…

 SM: And finally, it’s a hot topic at the moment – fixed or variable. Which would you suggest?

JB: It’s one of those things. As a broker or a banker, anywhere you are, you should never tell people what to do. It’s a hot topic with clients, they always want to know what I’d do.

I always talk about where rates are now, what variables are, the fixed rates and what repayments would be with adjustments. It comes down to options.

At the moment, I’d suggest a 4.9 (per cent) fixed rate is pretty cheap; that’s cheap money. There are a lot of people in the market at least splitting their loans and fixing part of it. It’s kind of hedging your bets.

I mean, 4.99 (per cent) is quite cheap. A lot of people are liking the idea of a fixed rate.

SM: Sounds very tempting. Thanks for joining me, Josh.

JB: Not a problem at all.

SM: Check out the March issue of Australian Property Investor for a special look at fixed versus variable interest rates. Plus, in our cover story, we find out how three young gun investors have amassed more than $1 million in equity.

We also reveal 60 property hotspots where prices are set to shoot up. And, in a special API exclusive, property bear Steve Keen and property bull Christopher Joye face off over the future of house prices.

All of that and more in the new issue of API magazine, on sale now. For subscriptions and more information, visit our website – www.apimagazine.com.au. I’m Shannon Molloy, thanks for listening.

February 18, 2013

The forecast for house prices and interest rates


There still seems to be a bit of doom and gloom about so I thought it was time I looked at the statistics to see whether the future looks bright or if it’ll be more of the same.

BY PETER KOULIZOS

Firstly, let’s look at property prices. According to RP Data, home values fell 0.4 per cent across the combined capital cities in 2012. Some cities like Darwin, Sydney and Perth increased in value but the rest dropped in value. Read more →

February 15, 2013

Why so glum, Australia?


Last week I wrote about how Australians are now the wealthiest they’ve been in five years. I bet if you asked the average person how they feel, they wouldn’t be too optimistic about their financial position. Why?

BY MICHAEL YARDNEY

The continual barrage of negative media is still spooking many Australians. With all the overseas worries as well as local concerns – things like the mining boom slowing and pessimism about the state of our economy – folks have been saving rather than spending since the GFC.

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February 13, 2013

Handling real estate heartbreak


Sometimes love doesn’t last. What once seemed like such a sure thing in the grips of passion occasionally frosts over without warning, leaving you alone with a heavy heart. Other times, you just don’t feel that way anymore and make a dash for it. And from time to time, no one’s to blame.

BY SHANNON MOLLOY

Like in life, nothing is black and white when it comes to property. The best conditions aren’t always conducive to success and sometimes, against all the odds, you’re left heartbroken.
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February 8, 2013

Australians finished 2012 wealthier


While 2012 was difficult year for most of us – particularly those interested in property – it finished off with some good news. Household wealth climbed 18.4 per cent last year to $69,422 per person, making us the wealthiest we’ve been in five years.

BY MICHAEL YARDNEY

One of the interesting aspects of the rise in wealth is that it wasn’t driven by rising asset prices, but by people saving more. Rather than spending, Australians have been stashing their cash. Many have reduced their credit card debts, while others have taken advantage of low interest rates to pay off more of their mortgage.

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February 6, 2013

As a landlord, it’s best to dumb yourself down


They say assumptions are the mother of all stuff ups and as a landlord you shouldn’t take for granted that your expectations need to be clearly communicated. Take the tenant who figured her Great Dane would be suitable for an inner city flat that had strict size and weight restrictions on pets.

BY SHANNON MOLLOY

If you’re not familiar with Great Danes, picture a canine version of a larger, dumber and slower pony. What they lack in grace they make up for in slobber production and a largess unsurpassed by any other hound.

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February 4, 2013

Make this the year you take the plunge


If you’ve come to the conclusion that property investing is the best vehicle to deliver you long-term wealth and financial freedom, then do it. Just do it. Now is the time to stop procrastinating, stop making excuses and start investing.

BY JAMIE MOORE

Time and time again we hear from people who’ve spent so much time, energy and often money on educating themselves about the intricacies of property investing. That’s fantastic, but many folks then fail to act upon it.

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