There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.
Each Saturday morning I like to share some of the ones I’ve read during the week.
The weekend will be over before you know it, so enjoy some weekend reading…and please forward to your friends by clicking the social link buttons.
Investors feel pinch amid lending crackdown
It was reported recently that some of the big banks have adjusted their lending policies, and investors are feeling the outcomes.
This article from Money Magazine reports on the aftermath and what investors can expect next.
Investors set to feel sting as APRA crackdown gains momentum, writes Kirsty Lamont, director at comparison site Mozo.com.au
The recent uplift in investor activity has prompted banks to again pull the reins in on their investor lending after concerns that banks are infringing on the 10% investor growth speed limit imposed by the Australian Prudential Regulation Authority (APRA).
Last week the Commonwealth Bank (CommBank) and its subsidiary, Bankwest cited regulatory commitments behind their recent move to suspend new lending for investors looking to refinance.
CommBank is Australia’s largest lender so it is entirely possible that other lenders will follow its lead and further clamp down on investor lending by hiking rates.
In fact, we’ve already seen a flurry of lenders target property investors with higher interest rates in recent months.
Of the 84 lenders in Mozo’s database, 39 have upped their variable investor loan rates since the start of December 2016.
The outlook for property investors is bleak, with nearly 90% of lenders now charging investors higher interest rates than their owner-occupier customers.
The average price of an investor loan now stands at 29 basis points above an owner-occupier loan.
With some lenders offering much more competitive rates and requirements for investors than others, it’s more important than ever for investors to diligently research what interest rates they can get elsewhere.
Currently, there are nine lenders in the market that don’t slap investors with higher interest rates, which means there are good rates out there for those willing to shop around.
Furthermore, a Mozo mystery shop revealed major lenders are still prepared to offer substantial discounts under the table to investors who ask them for a more competitive deal.
As long as the growth in the Sydney and Melbourne markets shows little sign of subsiding, the pressure for lenders to stay within APRA’s investor loan growth limit or face increased capital requirements will endure.
Read the full article here
9 important money tips + How to improve the income of your rental + What’s best – new or established?
Another great Real Estate Talk show produced by Kevin Turner.
Michael Yardney gives us 9 lessons about money that we should be teaching our kids.
Brad Beer answers a listeners question about depreciation schedules not being a good indication of a unit’s value.
Damian Collins gives his opinion on the risk of relying on rental guarantees.
Margaret Lomas chats about buying new and/or established property, and reveals which does she prefers.
Miriam Sandkuhler is the founder of Property Mavens, a property advisory firm helping investors buy the right property, and they also help with vendor advocacy.
If you don’t already subscribe to this excellent weekly internet based radio show do so now by clicking here.
New home sales soften
With the year well and truly in full swing – it would seem that new home sales haven’t quite caught up to the pace.
Weaker start to 2017
New home sales declined by a seasonally adjusted 2.2 per cent in January according to the Housing Industry Association (HIA).
This cycle has now been the longest new home building cycle in Australia’s history, noted the HIA.
Detached house sales declined by 1.5 per cent.
Across the January 2017 quarter, however, sales of multi-units strengthened by 4.8 per cent to be 9 per cent higher than for the comparable prior year period.
At least for the short term, the HIA forecasts a reasonably solid outlook for residential construction.
Read the full article here
3 tricks for working with agents
We’re often easily inclined to put our faith in the hands of a professional – especially if we are not familiar with the process.
Real estate is no different – but whilst a real estate agent is there to assist, there’s certain tricks that are good to know in order to achieve a positive experience.
An article on Smart Property Investment has unlocked the vault on some of those tricks.
One of the country’s foremost real estate agents has explained that there is more than meets the eye to buying and selling property.
Gavin Rubinstein recently told The Smart Property Investment Show that there are a number of contributing factors behind the success of a sale, but equally as many inhibitors.
He shared three things investors should consider when working with an agent.
Time is money
Mr Rubinstein said one of the most important commodities for real estate agents is time and he often refuses verbal offers from potential buyers because “talk is cheap”.
“Time is money, so why are you going to waste it?” he said.
“I constantly harp on about how important time management is and I find when you fluff or when you muck around, you just waste time. So just call it how it is.”
Mr Rubenstein said he likes to move quickly.
“My team and I want a really sort of fast-paced machine, and the procrastination and the back and [forth] can be a little bit tedious.”
Honesty is the best policy
Mr Rubenstein said honesty is the best policy to ensure a smooth campaign and a quick transaction.
He encourages clients to be forthcoming about their motivations and to “put effort and time into building a rapport with agents” as this will aid the buying or selling process.
“Vendor motivation is key,” Mr Rubinstein said.
“I’m not scared to ask any questions to a seller, to a buyer, to an agent – doesn’t matter.
I always want to ascertain … are these guys dipping their toe in the water? Are these guys going to waste our time [and] send us down an emotional roller-coaster?”
Read the full article here
Australia is now the No.1 destination for the world’s millionaire migrants
Ask any Australian and they will tell you that we’re the lucky country and why wouldn’t they; we have the most beautiful beaches, friendly people, amazing culture and overall fantastic living conditions.
Now it would seem the world’s elite are inclined to agree.
According to an article on Business Insider , Australia is now the number one destination for the world’s millionaire migrants.
The world’s millionaires are on the move, and the place they most want to settle is Australia.
New World Wealth, a research company based in South Australia, has just released its annual report on global wealth and wealth migration trends for 2016.
The fourth annual global wealth migration study was compiled using investor visa program statistics, property registers and sales statistics in each country, plus interviews with 800 high net worth individuals or those with assets of $US1 million or more.
It finds global wealth migration is accelerating with 82,000 millionaires, or high net worth individuals, migrating in 2016 compared to 64,000 the year before.
And for the second year in a row Australia is the top country for millionaire inflows, beating traditional destinations such as the US and the UK.
An estimated 11,000 millionaires moved to Australia in 2016 compared to 10,000 to the US and 3,000 to the UK.
The top five destinations for millionaire migrants in 2016 were:
- Australia: 11,000
- US: 10,000
- Canada: 8,000
- UAE: 5,000
- New Zealand: 4,000
New World Wealth says the reasons for Australia’s popularity are varied.
- Australia has one of the best healthcare systems. In the UK, the NHS is deteriorating, while in the US the mandated healthcare insurance has not turned out well for wealthy and middle class patients.
- Australia’s location makes it a good base for doing business in emerging Asian countries such as China, Hong Kong, Korea, Singapore, Vietnam and India.
- Australia is relatively immune to the turmoil in the Middle East and the related refugee crisis in Europe.
- Australia was recently rated as the safest country in the world by New World Wealth. Australia is a particularly safe country to raise children.
- Australia is a good base for wealthy retired yacht owners who wish to sail the South Pacific Islands.
- Australia has lower inheritance taxes than the US and much lower inheritance taxes than the UK.
- Lifestyle: wildlife, beaches, scenery.
Click here for the full article
Weekend Video: Science Of Persuasion
Subscribe & don’t miss a single episode of michael yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to michael yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.