PCL had an elderly couple as clients who owned a 3rd generation farm.

They had gotten into trouble with a bank and fallen behind due to expansion plans and bad weather ( too much rain ).  For 3 long years they fought attempting to hold on as if the property had been sold at the time the price realised would have left them penniless.

The borrowers during the delays managed to get a development application approved by council to subdivide some of the land holding and had presold 8 of the 9 blocks.  They had paid numerous fees to finance arrangers for no result. The matter was further complicated by the Farm Debt Mediation Act and although the clients had not sought assistance under the provisions any incoming lender needed to be considerate of the review process.

The clients were at the point of eviction when PCL were contacted. PCL arranged funding attended settlement on short notice, assisted in completion of the subdivision. All money lent was repaid and the client further subdivided a residual block.

Now complete the have the family farm unencumbered another 2 blocks yet to sell and plenty of cash to take a well-deserved first ever time world cruise.

Hard deal for some but a sensible safe request outside of traditional lenders and only needing some simple structured loan agreements to secure.

Posted in Uncategorized

Illawarra Retains Title as Top Performing Regional Area

For the June 2017 quarter, New South Wales once again delivered Australia’s top performing regional property market according to the latest CoreLogic regional update. Leading the way, The Illawarra region, (comprising of: Municipality of Kiama, City of Shellharbour, Wingecarribee Shire, City of Wollongong) experienced the best home values growth for the quarter. Newcastle and Lake Macquarie followed.

CoreLogic research analyst Cameron Kusher said, “Some regional areas are enjoying the benefits of buoyant property market conditions due to housing demand rippling outside of the capital city boundaries into regional towns, particularly coastal regions.”

“Unfortunately, regional areas closely linked to the resources sector are still doing it tough; while conditions are generally stabilizing in these areas we expect relatively soft conditions to continue throughout the year.”

“With mortgage rates still low, the attractiveness of housing, particularly in some of the larger coastal regional markets, is likely to continue to show further growth over 2017,’’ he said.

Regional report key highlights (June Quarter):

  • The Illawarra region recorded the largest annual increase in home values, up 15.8 per cent for houses and 14.4 per cent for units.
  • Wide Bay and Townsville were the only regions to see values for both houses and units fall over the year to June 2017.
  • The Townsville region had the biggest fall in transaction activity, with dwelling sales down -9.0 per cent over the year to May 2017.
  • Townsville and Bunbury were the only regions to see rental rates fall over the 12 months to June 2017.

Regional Area Sales & Yields Snapshot:

  • Newcastle/Lake Macquarie: 8,278 homes sold (80% houses, 20% units) & 4.3% rental yield
  • Illawarra: 5600 homes sold (70% houses, 30% units) & 4% rental yield
  • Richmond /Tweed: 6,488 homes sold (67% houses, 33% units) & 4.9% rental yield
  • Gold Coast: 19,242 homes sold (43% houses, 57% units) & 4.9% rental yield
  • Sunshine Coast: 11, 068 homes sold (65% houses, 35% units) & 4.8% rental yield
  • Townsville: 3,164 homes sold (85% houses, 15% units) & 5.2% rental yield
  • Wide Bay: 5643 homes sold (90% houses, 10% units) & 5.7% rental yield
  • Cairns: 5418 homes sold (66% houses, 34% units) & 5.4% rental yield
  • Geelong: 6425 homes sold (84% houses, 16% units) & 4.4% rental yield
  • Latrobe/Gippsland: 6,033 homes sold (89% houses, 11% units) & 5.5% rental yield
  • Bunbury: 2,798 homes sold (90% houses, 10 units) & 5% rental yield

Richmond-Tweed was the only region to see sales volumes rise, with an additional 120 properties transacting over the year to May, representing an increase of 1.9 per cent.

While The llawarra was the top performer for home values across the regional areas analysed, sales activity dropped; the area recorded its biggest fall in sales activity over the same period with transactions down -7.4 per cent, or 447 fewer homes selling when compared to May 2016.

Rental rates increased across all three regions; units in the Illawarra region recorded the largest increase with rates up by 5.1 per cent. Units in the Richmond-Tweed region followed and were up by 4.6 per cent.

In Queensland, dwelling sales fell in three of the five regions over the year to May 2017 with the largest fall in Townsville where sales volumes were down -9.0 per cent. The Gold Coast followed with a drop of -8.2 per cent, then Cairns with a -4.1 per cent drop.

Across the Sunshine Coast and Wide Bay regions, sales remained much the same as they were in June 2016. Wide Bay and Townsville were the only two regions to see home values fall, while the Gold Coast region saw the largest increase in both house (7.5 per cent) and unit (5.9 per cent) values, followed by the Sunshine Coast, where house values increased by 6.0 per cent and unit values increased by 4.4 per cent. Cairns recorded minimal change in home values; unit values in the city were virtually unchanged (0.4 per cent).

Rental rates in the Gold Coast region recorded their largest increase for houses at 5.0 per cent, followed by houses in the Sunshine Coast region at 3.3 per cent.

In Victoria, sales activity dropped by -0.8 per cent in the Geelong area, while the Latrobe-Gippsland region saw a slight increase of 1.3 per cent in the amount of homes transacting over the year to May. Both regions saw home values increase over the 12 months to June, with values increasing by 8.3 per cent for houses and 5.6 per cent for units in Geelong, compared to the Latrobe-Gippsland region, where house and unit values increased by 2.9 per cent and 4.1 per cent respectively.

For Western Australia’s Bunbury region, house values remain unchanged, however unit values fell -2.6 per cent of the year to June 2017. Sales volumes fell -4.7 per cent over the 12 months to May, with current activity -13 per cent below the five year average. Rental rates in the Bunbury region fell -2.9 per cent for houses and -6.1 per cent for units when compared to June 2016.

Posted in Uncategorized

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Posted in Uncategorized

How the budget will affect you as a home owner/property investor.

The top 5 points to take away from the 2017 budget if you’re a home owner or property investor:

  • In what has been an idea floated numerous times (and shot down), it’s the old policy of the “first home saver accounts” introduced by Labor. The federal government has given into public pressure on housing affordability and receive concessional tax treatment on contributions by being able to salary sacrifice, and the earnings will also be taxed at a concessional rate.
  • Importantly there will be here will be caps on the amount that can be contributed annually to the account and also an overall cap on the size of the fund. There won’t be an age limit on who can set up this fund BUT it can only be used for the purchase of a first home.
  • A “ghost tax” has been introduced to foreign investors. From a public perception point of view this is a great idea. It’s in the media a lot that many units/houses, especially in Melbourne, are being left vacant by foreign investors on purpose to allow them to negatively gear them. This will no longer be permitted; a levy of up to $5,000 can be imposed on foreign investors who leave the property vacant.
  • Retirees who downsize by selling the family home will be offered exemptions from new superannuation limits. This means they can contribute up to $300,000 into their super, from the proceeds of their house sale.
  • This last one is so important: Further roll-out of government’s City Deals between all levels of government and the private sector to develop urban areas. City Deals between the Australian Government, a state or territory government, and local governments will make our cities better places to live in and do business. Through City Deals, governments, industry and communities will develop collective plans for growth and commit to the actions, investments, reforms and governance needed to implement them. This is like a “Master Plan” and more importantly The focus is not just on capital cities and major urban areas – Australia’s regional centres are vital to the performance of the wider Australian economy. Improving their productivity and liveability will be addressed in City Deals.
Posted in First Home Buyers

Is it time to review your interest rates?

When finances seem tight in the household budget it’s normal to let go of the luxuries in our lives. From take-outs, to trips to the cinema, we sometimes look at trying to find a better deal on all our insurances.

Mind you this is an excellent idea even if the household finances don’t need your attention. There’s a few hundred a year that can be saved just be switching your home and contents, building and car insurance, even the health insurance industry is becoming more competitive when clients ask for a better deal. So imagine what can be saved if you review your interest rates regularly.

The mortgage industry is going through an incredible phase. People are losing confidence in the Big 4 and are turning to smaller financial institutions and independent mortgage brokers to get them a better deal. So what’s the best advice when you decide it is time to review your interest rates?

  • Affordability is tough ATM, don’t burn your credit file applying to multiple lenders.
  • Make sure you understand the features offered in a mortgage. The ones you don’t use could cost you unnecessarily.
    Lots of second tier competitors want your business and are very competitive (that’s a tick for us) if they suit your goals and needs.
  • Look seriously at whether to fix the lot unless you have good advice from a financial advisor as it can cost you more in the long run.
  • This may seem counter intuitive but start with your current lender armed with info of their competitors to save the costs of refinancing. You have to take into consideration the cost to exit your current mortgage and the cost to establish your new one.
    Pay attention to the comparative rates, this show % rate with all costs considered.
  • Be clear on what you do need & what your plans are for next 3-5 years.

But most importantly don’t be afraid to demand more from your lender, after all, they can’t exist without you so make sure you stand up for yourself, and you do that by being armed with as much information as possible.

Posted in Interest Rates

Are you looking to invest in property? Here’s what you need to know before you get finance.

If you’ve made the decision to invest in property you’ve probably done your due diligence in making sure it’s the right choice for you. If you’ve considered shares, stock market or gold and decided property investment is for you then let’s look at how to get into the right head space and especially what you need to look before you get financed.

Here’s what you need to do/know before you do your finances:

  • Contrary to popular belief less than 6% of Australians, or roughly 1.3 million people, own an investment property, this is important to recognise.
  • List your assets, including you and your partners (if relevant) income. Make sure you include what your current expenses are. This will help you understand how an investment property will affect your own cash flow.
  • Set you goals. Consider what you want? Do you want to positively or negatively gear this property, find out the pros and cons.
  • Do your research in the areas you’re thinking of investing in. Are they saturated? Are there any big plans for infrastructure nearby, this is both a positive and a negative. Building works for 2 years could lessen your property but a new train station would increase its value.
  • Make sure you have reconciled your risk. Understanding your own attitude towards risk will help you when deciding what property to buy.
  • Start budgeting, yes sounds boring BUT budgeting is the only way to balance your incomings and outgoings, and lenders love to see the work you’ve done to present yourself a lower risk than others.
  • Stay focused, it’s easy to get caught up in the emotional roller-coaster of home purchasing but take the emotion out of this, it’s a business transaction so treat it as one.
Posted in Property Investment

Breaking down the budget.

Budget can be a tough time, even if you are financially savvy. Politicians are experts at putting forward a budget that sounds amazing (spin anyone?) but when you break it down it affects you more than you realise.

So how does the 2017 budget affect you?

Let’s take a snapshot shall we:

  • This was the budget of budgets for small business owners: You will now have access to the “instant asset write-off” scheme which means business owners can instantly claim up to $20,000 of necessary business purchases for tax purposes.
  • If you are older than 65, are on a pension or are looking at downgrading your home this is a budget for you. This includes the ability to add $300,000 into your super from the sale of your home, tax free. This is to encourage downsizing to free up housing for younger, bigger families.
  • If you’re a student this is a tough one for you, fees have increased by 7.5 percent as of next year and you’ll have to pay your loan off faster. Under the new budget, the new HECs repayment threshold is now $42,000 a year – down from $55,000 a year.
  • If you’re a first home buyer it was announced that young people can contribute and withdraw up to $30,000 from their super to purchase their first home.
  • If you’re married and currently own your own home there doesn’t seem to be anything in the pot for you but also you won’t have anything taken away. So carry on as usual.
  • If you have a disability or are the carer of someone who does the government has confirmed it will “fully fund” the National Disability Insurance Scheme to be rolled out nationally by 2020. This is amazing news.
  • If you’re a foreign investor there is now an annual levy of $5000 if you do not rent out the property you’ve purchased or have someone living in it. Overseas-based investors will also now only be able to buy 50 percent of new housing developments.

It’s a balanced budget for most, some tough decisions for students but some welcome news regarding foreign investors which may help our affordability issues.

Posted in Misc

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Posted in Uncategorized

Hello world!

Welcome to WordPress. This is your first post. Edit or delete it, then start writing!

Posted in Uncategorized

What the RBA is likely going to do with interest rates in 2017?

What the RBA do to the cash rate and, in turn, to your mortgage interest rate (if passed on by your lender) can be enough to set your blood pressure going. So what does the RBA have in store for 2017? As always it will depend on who you ask but the general consensus is they will rise through-out 2017. It is, however, unlikely to herald the return of sharp, and steep, monetary policy tightening cycle (as in 2008) from the RBA according to David Scutt from Business Insider Australia. Prior to the devastating GFC cash rates were 7.25%, yes 7.25% which sounds unbelievable now.

With household debt at a record level high many house owners religiously tune into the RBA announcement every month to see how the decision will affect their monthly budget. With many families living close to the line, many calling pay day “allocation day” instead, a difference of $150 a month can have a knock on effect for the rest of their budget.

According to Julia Corderoy (news.com.au) 1 in 5 Aussies will experience “housing stress” if interest rates go up by 0.5%. Our own government have agreed that the impact of higher housing costs is most strongly felt by lower-income groups, particularly low-income renters for whom home ownership is increasingly out of reach, thanks Yates & Milligan for confirming this. Many experts note that the only way to manage expected interest rate hikes (mostly towards the end of 2017) is for the government to get involved and offer some great policies to prevent a catastrophe.

So who is in the “know” when it comes to interest rate rises? The big 4 banks would be my bet and what has their faxed rate mortgage % in recent months? It’s gradually gone up, bit by bit, indicating that more variable rises are in the forecast for the year.

Is there a way for home buyers to protect themselves in the year to come? Yes ofcourse, there are a couple of things they can do: Firstly re-mortgage, go find a great rate, with an smaller buyer (Yes I mean us) But seriously re-financing is a great idea. Secondly, have a hard think about a fixed rate but know the risks involved (paying more for peace of mine) and thirdly go onto interest only for 12 months but continue to pay the same as you were paying before, this will give you a buffer should there be a hike rise.

Posted in Interest Rates, Uncategorized