I'm starting to see caution in the market starting to tip towards silliness. Remember, the only thing you have to worry about losing in this game is your head. Someone tell the AFR: "Deposits Have Tripled A typical deposit on a $1 million residential property has nearly tripled from about $50,000 to $150,000 as borrowers commit to tougher standards demanded by regulators, increasing pressure on the Bank of Mum and Dad or unsecured loans to make up shortfalls, lending analysis shows. Deposits required for nearly eight-out-of-10 loans have increased from a minimum of about 5 per cent of the property price to about 15 per cent of the price for investors and 12 per cent for owner-occupiers, it shows. ....Sally Tindell from RateCity said: "Home buyers no longer need one or t
Back in 2009 Rolling Stone describe mega investment bank Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." And what does the Vampire Squid think about Australian property? They're pretty calm actually. In fact, they reckon the surplus that opened up in Sydney and Melbourne on the back of massive apartment construction has unwound, and we're now moving back towards shortage. This is what they said recently in one of their exclusive notes to clients: Overall, we find that Australia's housing market is now close to balanced after being somewhat 'over supplied' in recent years. Regionally, this oversupply was entirely driven by conditions in the mining-exposed st
Finding it tougher to get credit? You’re not alone. This is a very tricky credit environment right now. The Royal Commission has got banks running scared. They’re a little freaked right now. What’s come to light is that banks have been playing a little fast and loose with the rules. One of them is around HEM – Household Expenditure Measures. This is a bench mark figure to determine what a household needs to survive. Banks have been using this to assess serviceability. How much can you afford? Let’s look at how much you need to survive. But APRA is saying that this isn’t good enough. Banks shouldn’t be using benchmarks. They should be looking at actual spending figures. (To be fair, these rules have been in place for a while, so the banks should have known better.)
Last month there was some big news, in case you missed it. The NSW government is forcing Ryde local government in Sydney to allow more medium density development. "The NSW government is facing a suburban revolt over its new medium-density housing code, with one mayor predicting bulldozers in every street if the rules are implemented. The code will permit homeowners and developers to carve up blocks into terraces and dual occupancy dwellings, or create "manor houses" in which a single building houses three or four dwellings, using a complying development process that is faster and cheaper than existing approval processes. The new housing code begins in July but real estate agents selling properties in Ryde were already tailoring advertisements to appeal to developers. The
The Chinese buy has been sidelined for the past year or so. It had a huge impact on the market - particularly in higher-end suburbs. Chinese buyers went hard and many paid with cash. But then the Chinese buy got sidelined. In part it was about the Australian government cracking down and making sure all foreign buyers were playing by the rules (especially the rule that foreign residents can't buy existing houses.) It was also about them hiking stamp duties etc for new dwellings. At the same time, the Chinese government started cracking down on capital outflows. They started making it tricky for Chinese people to get their money out of the country. And so the Chinese buy dried up. Prices in premium suburbs plateaued. But now, maybe, the Chinese buy is back. For the first t
This property expert believes that a crash is unlikely thanks to strong population growth. A few people are worried that the current downturn might fall into a full-blown crash. Shane Oliver at AMP reckons it's unlikely. He says that maybe property is a fraction overvalued at the moment, but since population growth remains so strong, serious price falls remain very unlikely. He had an interesting pack of charts. The first compares current property values against their long run trend. On that measure, property does seem a tad overvalued right now, but nothing extreme in the scheme of things. Definitely nothing that points to a huge correction. But Oliver also notes that the game has changed. Right now, population growth is booming thanks to strong immigration. Constru
Legal Disclaimer: The information we provide ("the information") is presented for illustrative and educational purposes only. It is not presented nor should it be treated as real estate advice, legal advice, financial advice, investment advice, or tax advice. All investments involve risk and potential loss of money. If you require advice in any of these fields we urge you to contact a suitably qualified professional to assist and advise you. Your personal individual financial circumstances must be taken into account before you make any investment decision. We urge you to do this in conjunction with a suitably qualified professional. Cashflow Capital Pty Ltd and all of their associated companies, researchers, authorised distributors and licensees, employees and speakers do not guarantee your past, present or future investment results whether based on this information or otherwise and disclaim all liability for your purchase decisions. You should do your own independent due diligence and seek the advice of qualified advisors before making any investment decision.