Regards

Ben

So to drill down then. If you live in south east Queensland, Adelaide or Perth the news isn’t good. Brisbane house prices fell most, with the median property value down 6.7 per cent in the period, followed by Perth, down 5.7 per cent and Adelaide, down 5.1 per cent.

In real terms what does this mean. So here’s an example.

In September last year the average Brisbane house cost around $460,000. At the time a borrower with a 5 per cent deposit ($23,000) may have taken on a loan of $437,000. That borrower might now find that their home is valued at just $429,000.

After one year, this borrower has only repaid around $6,000 of principal (assuming a 7 per cent interest rate and a 25-year loan term) – so their mortgage is over $430,000 and therefore more than 100 per cent of the value of their home.

Whilst that in and of itself is a worry. It only plays out if you want or need to sell or refinance.

So remember this isn’t the stock market. We don’t track the daily movement of our home prices. If you’re concerned then talk to your broker.

Yesterday, AMP, Suncorp and ING DIRECT all passed on the full 0.25 per cent rate cut to their borrowers.

Speaking about the rate cut, ING DIRECT’s chief executive Don Koch said the Reserve Bank’s announcement had come just at the right time.

“The rate cut is timely and will provide home buyers and households with much needed confidence,” he said.

“We are pleased the RBA has decided to cut the cash rate and that we are in the position to pass on the full 25 basis points to our mortgage customers.”

The lender’s Mortgage Simplifier product now boasts a new rate of 6.87 per cent.

A new survey by the Finance Sector Union found more than half of all bank, insurance and financial services employees steer customers towards certain financial products as they continue to be rewarded for sales rather than service. Of the 3,200 financial service employees surveyed, 88 per cent said a quarter of their take home pay is generated by sales of financial products. “The ‘Do you want fries with that’ mentality is alive and well in the Australian finance sector, despite ballooning levels of personal debt.

This approach is completely at odds with the notion of responsible lending and professional service,” said FSU national secretary Leon Carter. “The problem is not the finance sector workforce but the upper echelons of our big banks and insurers, who hold employees to ransom on the condition that they sell more products. Woe betide any employee that doesn’t sell the required number of credit cards, loans or whatever the product of the month is. They won’t just miss out on the next pay rise; they might also lose their job.”

According to the research, 85 per cent of respondents said they would like the industry to find a better balance between the best interests of customers and corporate profit. “Finance sector base rates of pay are not high. Employees can’t afford to miss out on bonuses and performance pay. They are under unrelenting pressure to sell, sell and sell some more, whether it’s good for the customer or not,” Mr Carter said. “This is a pay model that should have been abandoned during the GFC.

Instead our biggest, wealthiest finance companies, who continue to post multi-billion dollar profits, are intent on wringing as much out of the community as they can, using FSU members as a conduit. That sort of behaviour is not on, and must cease now.”

Source: The Adviser

1. Schools – people are prepared to drive 30-40min to work as long as their kids are close to their school

2. Family / Security – equal second is having family close by and the area being considered a safe area to live

3. Transport – close to public transport is number 3. Check what public transport systems service the area you are considering.

4. Shopping – feeding the family is critical so make sure there are shopping centres close by, no-one wants to drive an hour to do the groceries

5. Jobs – people desire to be within 30-40mins drive to work, so do your research on what employment opportunities there are in the area.

6. Recreation – ensure that there are plenty of leisure facilities nearby – parks, pools, golf courses, sports centres etc

These 6 factors are just part of the overall strategy in making the right decisions about your next investment property.

Contact Russ @ Club Financial Services for more assistance 0407 524 752 or russ@coffs.clubfs.com.au

Research data found market conditions currently favour property investors who are looking to benefit from ongoing seller discounting, healthy rental income growth and longer term capital gains.

“The latest data suggests greater movement from investors taking advantage of subdued market competition and housing price reductions.

“There are many more properties on the market than usual and less buyers to purchase them. Australians who are ready financially and keen to crack the market or build on their portfolio may find that some solid hard work sees them snap up opportune purchases while demand is low.

“Other encouraging factors are our healthy population and wage growth and low rental vacancy rates. Rents are rising at a faster pace this year while property values have steadied or dropped in many areas, so rental yields are on the increase. This all bodes well for people who research the market thoroughly, have a long-term strategy and are informed about their finance options.”

Source: The Adviser

Property Workshop details here

According to RP Data research analyst Cameron Kusher, the current trend of rising rental rates means investors can potential snag themselves a bargain that nets good return.

RP Data’s latest Hedonic Home Value Index found capital city home values fell 2.1 per cent in the March quarter, while weekly rental rates grew 4.6 per cent in six months.

“The market definitely favours investors over upgraders or first time buyers. If you don’t need to sell anything first to get onto the property ladder, you can potentially position yourself for some long term capital growth,” Mr Kusher told The Adviser.

“With rents on the rise, there is also the potential to find a property with good gearing – if not positive gearing.”

Source: The Adviser