October 09 BPS
Hi Everybody,
I don't need to bore you with all the positive data that has come across my desk in the last month. I can tell just from the increase in traffic I am getting - both for finance and property search. If anything, it is too much good news and will cause an interest rate hike sooner instead of later.
One piece of data that is interesting is this one. The accompanying chart is one reason why many pundits are maintaining we will see sustained growth in property prices in this country. Our population is set to increase faster than India's and just about every other country in the G20.
CALLING FOR A RENTAL REVOLUTION
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I am calling for a revolution over the lack of rental accommodation in this shire. I remember in the 80s and 90s we had so many more colourful, crazy people living here. The kind of characters that made this place what it is! Many were forced out due to lack of affordable rental accommodation. It is going to happen again with another tier of people unable to find, or afford, anywhere to rent. Inner city Melbourne and Sydney have vacancy rates of less than 0.7% when 3% is bad. Here I think it is worse.
But there is something you can do. Join the revolution with me! It's a win/win option that can put more income in your pocket and help with the intense rental shortage - BUILD A GRANNY FLAT OR STUDIO! House someone who will otherwise have to leave to shire and go and live in Casino or Ballina. Save them from a fate worse than ..... exile!
I don't care if its legal or illegal - just do it. The council will be diddling around for decades with an Affordable Housing Policy that will never work. We need to do it ourselves. I am willing to help anyone who wants to consider it. Over the years I have helped many buyers convert garages, master bedrooms or under house areas into great spaces for people to live in. Give it a try. I am calling for civil disobedience on this issue as I think its important and the best way to save our diverse culture!
If you want to do it legally there are simple ways as well. The NSW Government sees this as a good way to quickly boost housing stock, as the shortage is criical. Here is a fact sheet that gives you good information on how to quickly get a legal granny flat:
Granny Flat Info
HOW CAN I HELP?
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I am offering an obligation free consultation on how you can convert and/or finance an extension or conversion. I can help explain the pros and cons and it may even be worthwhile for you to burrow to do it. For example, if you spend $70,000 on an extension and pay 6% interest you will be paying out about $90 a week to finance it... but you may be able to get up to $200 a week from a grateful tenant happy to have somewhere to live. That is a 15% yield, so you are making 9% a year passive income.
My first visit and discussion is free. You may not need any new finance to get you going or have an easy inexpensive conversion. Then all the best, good luck. If you do need to refinance, then my service to help get the job done - ideas, tradesmen, advice with council etc - is part of the deal. If your present loan structure is in place and there is no need to refinance, but you still want my advice, then I will charge you a small consultation fee. I do not want to put you through a refinance unless you really need to.
So - join the revolution and give me a call.
Changes to rates and FHOG grant
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At the time of writing this it looks like the RB is going to lift rates by at least .25%. If not this month, then definitely next.
Just so we are clear, as of the 1st of October, the First Home Owner Grant "Booster" of $7,000 has been halved and from 1st of January 2010 it will be cut out and we will be left with the original $7,000 for an existing dwelling and $14,000 for a new home. From now till the end of the year the full FHOG is $10,500 for existing dwellings.
It has been surprising by the lack of take up of the offer of the FHOG in this area. It seems the entry level; $400K plus is a bit high for first home buyers around here.
Ups and Downs
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The highs and lows of share trading compared to the stability of property investing are highlighted in this chart. ASX is the blue line, Housing prices the red line from Aug 06 to Aug 09:
I wish to apologise for last months misuse of the word "bludgeoned" when writing about the death of young Jai at Mullum High. I offended some people and I regret that. I was misinformed and over sensationalised a very sensitive situation. I am sorry.
That's it for another month. I look forward to helping you in person if I can.
Michael Murray
0428 555 501