Hello Everyone
First up - housekeeping!
I have moved home and office and now have joined the SoHo trend (Small Office Home Office).
My email and mobile (0428 555501) remain the same but my office/home/fax number landline is now 02 6684 1744.
Downsizing anyone?
I have also joined the downsizing trend. The present economic climate has made almost everyone think of eliminating unnecessary expenses and reverting back to core business. Some of the things to consider:
- ARE YOU PAYING TOO MUCH INTEREST?
Have a free consult with us and see if we can get you a better deal. As I mail this today they have just dropped interest rates again by .75% bringing the official rate to 5.25%. If your bank is not passing this on then you should talk to us.
- IS YOUR HOUSE TOO BIG AND PREFER SOMETHING SMALLER?
I can give you information with a rough valuation of your present home and an estimate of something smaller including all your finance costs and moving expenses.
- CAN YOU MAKE EXTRA RENTAL INCOME FROM YOUR PRESENT HOME?
- I have done this a number of times in various properties and can advise on converting a downstairs area or a garage into a separate rental unit or putting a studio in a back yard. A friend of mine is also a builder and has done this often and he can do it cheaply and aesthetically. I also think this is a good thing in providing affordable housing for the community which is something the council is not capable of doing either now - or ever.
Will Property Prices Drop?
As I move around the shire this is the most common question. Normally I would offer an opinion but these are not normal times. I could sound informed and knowledgeable saying that Australia is not like America by not overdeveloping houses and condos in a property bubble so we do not have an oversupply. So the inherent demand and high rental yield will provide a floor on our house prices here. But I just don't know or even can hazard a guess. We are no longer in the realm of pundits or economic certainties and anything goes. House prices are now in the control of emotion where fear, greed and herd mentality run the show.
Take a quick glance through the real estate sections of newspapers and see the number of "Reduced to Sell" or "Owner committed Elsewhere", signs to see there is a lot of downward pressure. My only guess is that now is not the best time to list unless you really have to. Although there are many pundits out there saying that house prices are set to come down by another 20-40% - I am not one of them. House prices around here (except for Suffolk Park and a few other areas) pulled back from their 2004 highs by about 5% and looks like that is happening again now but I have my doubts that will be maintained or increased. The big question is are they going to drop by more than that - as I said, its anybodies guess.
However .... my experience in the last couple of weeks is that the market is firming very quickly. I am fielding an increase in enquiries and many of the agents I speak with are seeing the same thing. Anecdotal evidence from old timers in the shire have said that after every economic downturn is that enough people from the southern cities sell up and move here to keep the prices solid. Also all of the talk of bank interest rates going as low as 4% is enough to keep sale on the boil. But again, please take your own counsel on this and I am not recommending anything. See the disclaimer below.
The Mortgage Watchdog
I have come across this interesting piece of software that I am presently investigating. www.mortgagewatchdogpro.com.au/bbps/
This is a program that will search through your loan statements and see if your fund provider has been making a mistake in estimating the amount of interest you pay. It seems that on average this software finds a mistake 54% of the time. Enough of a statistic so that the retailer of this program will refund the cost as well as a $50 bonus if you do not find a fault. It is usually $198 but they are offering a 20% discount. I will be doing it soon and will let you know how it goes. If you do not want to read it all just go to the streaming clip from a Current Affair,that explains the idea fairly succinctly. The only draw back that I can see is that you have to find the time to enter the data into the program. But many people have found discrepancies of many thousands of dollars.
First Home Owner Anyone?
The government is offering a stimulation package to try to keep house prices buoyant by doubling the First Home Owners Grant from $7K to $14k for existing homes and to $21K for new homes. This is a great deal if you have never been on a property title before. It also includes no government stamp duty for properties under $500K that is an amazing saving on your conveyancing costs. This brings the entry level for purchasing a first home down to very accessible point. Around Byron we do not have a lot of entry-level priced property (starting here around $450K) but there are plenty of places within earshot that are worth a look. So if you have no previous title to your name and only a small deposit, talk to me and I will suggest a strategy to get you settled.
Club Dread
I first knew something funny was happening around the Becton Development at the Beach resort when I saw a stock report saying it had the lowest PE (Price Earnings ratio) in Australia. I then saw that their stock price has gone from over $5 to around 15 cents. It may be another victim of the financial meltdown but I hope not for all those that have paid their $5000 for a chance to reserve one of the units off the plan. Something tells me it may be worse for us if we have to start again as a new developer coming out of a Mortgagee sale could be a lot more maximum yield than Becton.
How to stop worrying and love the recession.
I read an interesting article saying that people are generally happier in times of economic downturn. We apparently take more time to stop and smell the roses, spend time in the garden and with family, start a vegetable garden and play musical instruments. Simple pleasures that don't cost a lot of money. We don't spend so much time working overtime, being competitive, going out to expensive restaurants indulging in rich food and alcohol. So stop going over that share portfolio or superannuation statement regretting decisions from the past - go to the Pass and watch the sunset over Chincogan and forget about it!!!
Non legalese Disclaimer
Please be aware that financial services is a very regulated and litigious area. Everything I write in my newsletters is only a personal opinion and not to be construed as personal financial advice. I am not licensed as a financial planner.
As a qualified property buyer's agent and certificate level 4 mortgage broker I can walk you through various options of selling and buying, loans and refinancing. However I am not a listing agent and since I am not looking for your listing business but happy to make suggestions and help with a selling strategy.
See you next time.
Michael