Last month we detailed all the positive news for property, including the great Federal Election result - with no detrimental changes to negative gearing and capital gains tax, the news that APRA are reviewing its guidance on serviceability assessments to lower borrowing restrictions, and the resulting likelihood that activity would now pick up. So what’s happened since then?
Well I can report that post the election, activity has definitely picked up. CBA reportedly had more first home buyer loan applications in one week than what they had over the previous 6 months! That’s a sign that the sub-$750,000 market is about to become a lot more active. Stock supplies are lower than at the same time last year, with sellers still taking a wait and see approach, but home buyers and investors are starting to become active again, making competition for restricted stock stronger. Clearance rates are improving, recently reaching the highest point in over a year. We are seeing heated competition at auctions for investment-grade properties and the ‘bank of mum and dad’ is showing up again. These are all signs the market is picking up and that it could bottom out soon, which means now is the time to buy, before prices start to grow again. The old real estate adage that you make your money when you buy rings true, and those that do purchase investment-grade properties now will almost certainly see growth in the short to medium term.
Over the past month we’ve also seen the RBA make a move on interest rates, with the cash rate falling for the first time in nearly three years to reach 1.25%. Many lenders passed on at least some, if not all, of the drop, providing even more of an incentive for purchasers to act by borrowing and buying. With predictions the cash rate will fall lower – with some even expecting it to drop to 0.5% by the middle of next year - there could be more stimulus provided to the market.
I am proud to announce that in the midst of all these exciting changes to the property market, I was selected from over 300 entrants as a Winner of the Top 10 Australian Women Entrepreneurs 2019 by The Entrepreneur Magazine. The awards we receive highlight that our leadership and innovation hold us in high regard amongst those in the market, which speaks to our expertise.
If you want help identifying opportunities in the Melbourne market or regional parts of Victoria from a qualified buyers’ agent, contact us for some advice today.
Will the Federal Government’s First Home Loan Deposit Scheme work?
The Coalition went to the Federal Election with a policy to introduce a First Home Loan Deposit Scheme from January 2020. It will provide eligible first home buyers the ability to borrow 95% of the value of a loan but avoid paying mortgage insurance (which is currently payable with a loan-to-value ratio of less
than 80%), as the other 15% of the loan amount will be guaranteed. Singles earning under $125,000 and couples under $200,000 will be eligible.
So is this a good scheme? The reality is that very few buyers will qualify, and if they only have a 5% deposit, they will still have to service 95% plus costs, so they may be very limited in terms of what they can borrow in total. A smaller deposit also means higher interest repayments over the term of the loan, so ultimately these first home buyers will end up paying much more.
It’s important to note that the banking sector hasn’t been involved in this concept and may not take on any perceived risk with these type of loan applicants. The success or failure of the scheme may well come down the banks, who are already in damage control and are risk averse.
As I’ve said before, we’re very fortunate that the ALP didn’t win the election, with the raft of changes they were proposing for property. The Coalition’s only major housing policy was the First Home Loan Deposit Scheme, so by and large their re-election means there is continuity for property going forward.
For more information on our property advocacy services, contact us today for an obligation-free discussion.
Fresh Start ™
It’s one of the most distressing times you can experience - separating from your partner.
Not only does it involve a lot of personal pain, a separation also has big implications for your finances, particularly your property holdings.
That’s why we introduced our Fresh Start service. Property Mavens takes charge of selling your family home or investment with.
An independent assessment of what the property is worth
Selection and management of real estate agents and intermediaries
Advice on maintenance, styling and landscaping to secure a better price
Best tactics to secure a successful sale
If you want a confidential discussion about making the right property decisions to secure your life after separation, feel free to call us on 03 9988 2266 (or have your legal counsel get in touch).
Why do you need a buyer's advocate ?
Referred by their financial advisor, our clients Chris and Emma engaged Property Mavens to find them a high-performing capital growth investment property to grow their equity into the future.
Following the brief, we purchased a low-maintenance, high-performing property on our clients’ behalf. We were able to successfully purchase a high-tenant appeal property delivering a strong yield in a highly sought after pocket of Thornbury. The 3-bedroom, 1-bathroom house was purchased at the market value prior to auction.
According to Chris and Emma’s testimonial, they were happy with our services due to our “knowledge levels, the support we provided and our great engagement and communication”.
If you want help to identify an investment-grade property like this one, whether it’s a family home or an investment property, click here to book a time with us to discuss your requirements. It’s 100% obligation free.
Why do you need a vendor's advocate ?
Our clients, Gary and Loretta were time poor and wanted a stress free experience selling their investment property, a 2-bedroom, 1bathroom apartment in the suburb of Braybrook, so they engaged Property Mavens’ vendor advocacy service.
The role of a vendor advocate is to act as a liaison between the property seller and the selling agent. We consult with you to support and guide you during the sales process, from recommending the best method of sale for your circumstances, to selling property agent selection and campaign support. We’ll help you to set realistic price expectations and be your sounding board throughout the marketing campaign, so you can make good decisions.
After we helped them to determine which of 3 selling agents best suited their needs, Gary and Loretta selected their chosen agent and the sales and marketing process began with gusto! This resulted in 2 offers coming in at the very beginning of the marketing campaign, with the property selling prior to auction.
In Gary and Loretta’s words, “ Property Mavenstook away the pain of interviewing and deciding on which agent to list and sell their investment property. A short list of suitable agents and their marketing terms and conditions were communicated, and the process of selection was made easy given the negotiations were already handled on our behalf.”
The negotiated price for Gary and Loretta’s investment property was in excess of the quote range and significantly more than the most recent sale in the block.
If you would like help to secure a fantastic outcome like this one, whether it’s selling a family home or an investment property, and you’re ready to get started, click here to book a time to discuss your requirements. It’s 100% obligation free.
Our other clients Emma and Chris engaged Property Mavens to find them a high-performing capital growth investment property, with the ability to add value through renovation.
We were able to successfully purchase a property that fit their brief in a highly sought-after pocket of Coburg with the potential to add significant value through future works.
The renovator we purchased – a 3 bedroom, 1-bathroom house - was secured for a huge $26,000 below LAND value and below the vendor's quote range. As a builder, Chris has the skills and staff to update the property once it settles. It will be relet and revalued at that time and we look forward to sharing the end result with our readers.
If you want similar results, click here to book a time with us to discuss your requirements. It’s 100% obligation free.
Love to talk real estate?
If you want to invest or buy the right home for your budget, or sell your property click here to book a time, or call us for a chat about securing your financial independence.
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At Property Mavens we choose to give back to help create social change within our business model. If you use our buyers or vendor advocacy services, you will be helping to make a positive impact within the local and wider community.