Ballina and property price developments
April 2007 - Interest rates, Ballina, Casino, non-property option, property prices
May 2007 - New loan option, NSW country and Brisbane prices
June 2007 - Loans, Navra, Property Residex
July 2007 - Hot properties, Sub prime mortgaging, Housing affordability
August 2007 - Property vs Shares, Local market, Citibank offer
September 2007 - Overview, Loans, rates and the whole d... thing!, Properties
October 2007 - Overview, Byron Bay, Ocean Shores, October Property Hot List
November 2007 - Gazumping, The Rate Dance, MO & CT, Navra, Property
December 2007 - Property valuations, Replacement value, Equity finance mortgage
Last newsletter 2007 - Byron Bay market graph, beach front & other properties
January 2008 - Mood of Moment, post crash summary, Gossip
March 2008 - March Musings, New Developments
April1 2008 - War Stories, Property Punting, Interest Rates
May 2008 - Only in Byron, Lo Docs and Tax
June 2008 - Debt Consolodation, signs of weakness
July 2008 - Property Punting, Byron Bay Holiday Rental, Housing Affordability
August 2008 - The Wash Up, Signs of Weakness, Growth area, Debt consolidation
September 2008 - Take stock and share the pain, Property, Elections and Finance
Welcome to BPS Newsletter # 11 - August 2007
PROPERTY Vs SHARES
At times like this I get more enquiries about property as many people see how volatile and ruthless the stock market is. The irony is that this is usually the time that buying shares is most lucrative as buying at a low brings the most rewards. However picking just where the bottom only looks easy in hindsight. I thought we were bouncing back on Monday and moved some money in only to watch the worst one day fall in 6 years of 3.3%. The index could bounce along at this level for months or even fall another 200 - 330 points now. Good luck on picking a good entry point. I understand the extra enquiries as property is steady and fairly predictable.
THE CAUSE
Tomorrow I go to the USA for most of the month. I may not be admitting that I am a mortgage broker as well as a buyers agent. Mortgage brokers I am sure are not the most loved species over there as they are being partly blamed for the recent market turn. As I mentioned last email - the sub prime mortgage loan market is making everyone very skittish. "Sub prime" means below standard and represents the 20% of the US mortgage market who are not qualified borrowers - bad credit risk or unsecured. Here in Australia the sub prime market is only around 2%. Also here the minimum deposit for a lo doc loan is 20% while there it is 13%. They also have been giving away what they call "NINJA loans" - No Income, No Job, No Assets and giving these dodgy borrowers up to 100% of a property that is now rapidly falling in value. Then to cap it all, these sub prime lenders were able to on sell their loan books to any number of managed investment fund managers who are now holding the cake which happens to be full of worms.
THE LOCAL MARKET
Since property in Byron Bay real estate has firmed and has moved from a buyer's market to a seller's market there is a also a change in how people are getting financed. Many seller's are no longer willing to accept a "subject to finance" clause and are asking for finance to be approved prior to contracts exchanging. This can add extra pressure to the buyer - as if there wasn't already enough. This means it is very advisable to use a good reliable broker - or a bank where you have a good relationship (do any of you have that?). We can guarantee a 48 hour turnaround on conditional approval from when the application is lodged. You also make sure that nothing then goes wrong between contract exchange to settlement.
CITIBANK OFFER
Speaking of mortgages - for July and August only, Citibank is offering a very good deal of 7.36% standard variable with NO Mortgage Insurance. AND THERE IS MORE !!!! ....
Yes no application fee or no valuation fee but there is a $350 PA admin fee. I will be away but email me and Jay is back at the desk and ready to help anyone interested.
Take care - and I will be on email while away.
Michael M Murray
Buyers Agent/Mortgage Broker