DON'T FORGET TO COMMENT ON THIS ARTICLE
by Ulysses
As June approaches in Byron Bay, I am reminded what a brilliant place to be in autumn or spring - perfect climate with bright shiny days with warm ocean water and good surf - who could ask for anything more. It's the place to be!
The Wash Up
Everyone involved in property in Australia thought we were about to enter a boom period in the New Year of 2008. Then, a perfect storm of a financial meltdown and interest rates nudging 10% was enough to take the shine off the market - especially the luxury end that is usually very strong here. Also the new government, elected in November 07, although they have presented nothing concrete yet, is determined to keep property prices under control. Australia has the highest housing affordability ratio in the world after London. It takes 7.5 times the average annual income to buy a median value, residential home. Some of the steps they can take are to release more land at the outskirts of the cities or cut some of the onerous taxes - some say state stamp duty tax is likely to go.
My own "Mea Culpa" is to say sorry to the few people I remember saying don't sell to at the end of last year thinking hold your investment is the best strategy. I am reminded how dumb it is to try to guess the market - in any situation. Especially now when everything is so volatile and unpredictable!
Signs of weakness
Most capital cities experienced a slight fall in median house values over the last quarter. Sydney, Melbourne Perth and Canberra all dropped between 0.3 - 0.5%. Hobart was the worst dropping 3.4% while Adelaide the best going up 3.1%."It's the first widespread fall in four years," says APM general manager Michael McNamara. "It seems to have all stopped on a 10c piece." He also said " there are other signs of weakness, with the number of houses for sale rising 39 per cent from 180,000 in February last year to 247,000 in February this year."
Growth area
One scenario where there is growth in the real estate market is in co-ownership purchasing. This is where one person, on their own, can only afford a dump. But if they team up with a friend or relative they can share something halfway decent. The concept now even has its own website - does anything not have a website? You can go online and find a partner to help with the deposit and the mortgage - or as in most cases where friends or relatives join together - you can access practical and legal advice.
Debt Consolidation
If it is to be a time of constriction it may be best to consolidate debt. Any loss making investment is probably best discarded. Check your present loan to see if you are getting the best deal. If you have been thrashing the plastic and the credit cards are maxed - they often run at an interest rate 0f 18 - 20%, more than double that of the home loan. If it could be some time before you get a chance to clear those debts it may be advisable to consolidate it into the home loan. Please email or phone up for a free consultation to make sure you are in the best deal.
Present Mood
Even real estate agents are admitting it is very slow out there. They are usually so consistently ebullient and up beat it is hard to know the truth. Most of them must do these marketing/manifesting/positive thinking affirmations its hard to get to the real story. There are buyers out there but they are picky and price sensitive and predominately in the owner-occupier market. Some astute investors I know think that this is a market for bargain hunting and as rates stay high and buyers stay away many people will begin to sell for under market value. For the hearty amongst you take note of mythical investor Warren Buffet who advises: "Get greedy when everyone else is fearful and fearful when everyone else is greedy!"
Value your property
Want to find out how much your property is worth Australian Property Monitors are having a special - for $79.95 you can get an online valuation.
Trying to Solve Housing Affordability
Reading through all of the bureau-speak I have finally been able to make sense of the proposed government schemes. The grandly named First Home Saver Account Scheme offers young people trying to enter the market a bonus of up to $850 to encourage them to save for a home. It also offers some tax breaks on these savings that is still unclear to me.
The other initiative to reduce housing costs is the Housing Affordability Fund. This fund provides $500 million over five years to remove red tape and solve other administrative problems with providing new housing. It misses the point as the bottlenecks are at local government level, while state and federal government bureaucrats on junkets and fact-finding missions will probably spend the money. Hopefully they will come up with something worthwhile after five years at the trough.
www.byronpropertysearch.com.au
http://www.podproperty.com.au
Don't forget to download Indocquent's free social bookmark utility at http://www.indocquent.com/social_bookmark/social_bookmark_landingpage.html. |
3 comments:
There are various debt consolidation programs, which gives you a lot of options. You could either select a paid service or go for the many free services available. Thanks for the article!
Thank you for this very time appropriate post! Great in here.
houses for sale
Located in a turnkey rental desirable neighborhood, this property features huge open floor plan, rental properties finished basement, large back deck and wetbar in basement.
Post a Comment