Sep 08

Do you want a Big Australia?

By Hugh Frame | best investment, Economy, Investment, News, Properties, Real Estate, Research | No Comments

Do you want a Big Australia?

Both of our major political parties are in favour of a big Australia. Of course a big Australia means many more people, at present we are seeing an additional one million people being added to Australia’s population around every three years. The city of Sydney now has a population of over five million with another 1.5 million to be added to Sydney alone within the next 16 years.

The many arguments for a big Australia state that more population means more economic growth; another argument is that new migrants are of working age which helps off-sets the problem of the very large number of Australians reaching retirement age. Our future as an aging nation is not nearly as bleak as some of our Asian and European friends.

There are many dissenters to the Big Australia policy and their arguments are discussed in today’s news article (see http://www.smh.com.au/comment/is-there-room-for-big-australia-20160901-gr6atz ).

Wilton Junction. The newest of our New Towns – 70Km from the CBD

The implications of this massive growth in population should make the property investor stop and think. In Sydney, for example, using an average of 3 persons per household, we actually need an additional 500,000 homes over the next 16 years. It is only these numbers that can make some sense of the massive new developments happening in our North West and South West in particular. No longer are we seeing massive new ‘commuter suburbs’ being built on our city fringes but instead whole new towns with their own job-creating infrastructure.

The priority new town development area has been announced and will commence next year at Wilton Junction – (http://talkwiltonjunction.com.au/) – a new community to cater initially for 12,000 new homes and 35,000 new residents. Wilton Junction is just over 70Km from the CBD. If you have a trip to this new town, at around the 50km mark from the CBD just off the M5 bordering Narellan is the new town of Oran Park – (http://www.oranparktown.com.au/) – and its surrounding suburbs. Oran Park has transformed from the old Oran Park race track and surrounding paddocks to a hub of hundreds of homes surrounded by new commercial development with an eventual target of hosting a population of 25,000 people and maybe the same again in the surrounding area. It all looks very grand and we may wonder where all these ‘new’ people may come from?

We have two massive new developments here, one well-underway and another due to start shortly and between them they will offer a home in a new town to around no more than 90,000 people! Where will we house the remaining 1.4 million? Are we really building too many units in Sydney?

There is still great opportunity here for the astute property investment.

Sep 06

4

Great reasons to consider Brisbane for your next property investment

By Hugh Frame | best investment, Investment, News, Property Research, Research, Uncategorized | No Comments

Great reasons to consider Brisbane for your next property investment

There are a few YouTube links to this blog which highlight at least six Great reasons to consider Brisbane for your next property investment. Before you read any more, consider the position Sydney (and NSW generally) was in around 2008? The country was doing exceptionally well, unemployment was low, GDP was high, we just had a new Prime Minister, the country had no debt at all but our State Government and our state was being described as a ‘basket case’! Our health system was in a mess because hospitals didn’t have enough to pay for food (Liverpool) or laundry (Camden) and unemployment in NSW was around the 7.8% mark. We were under the guidance of politicians like Mr Obeid, Mr Trapodi, Mr Robertson, et al! Happy Days.

By early 2010, things had improved considerably in NSW, unemployment was way down below 5% and the State seemed to be out of its ‘technical recession”. By 2011, our government had changed and we entered an era of massive employment and construction with jobs for all who wanted to work! The huge spend on infrastructure has been paralleled by a massive growth in house prices, exactly following the old PIE formula for house price growth – Population growth, Infrastructure growth with Economic growth.

For those who identify more with Melbourne think of the position the city and State was in before the Crown Casino development and all that has transpired since! Like it or hate it, the huge international Casino was seen as a ‘game changer’ for the city’s economy.

How will you even recognise the skyline of Brisbane in 6 years time? Massive growth in Brisbane’s CBD, brought on by major developments across the city, is set to almost completely transform the Queensland capital by 2022.

Major projects alone will amount to a multi-billion dollar expenditure which has just started, tens of thousands of jobs will be created in the infrastructure build and even more jobs will be the completed legacy. The only real surprise about all of this is the lack of knowledge about these projects outside of Brisbane itself!

So what I am talking about? The largest of these are as follows – real game-changer projects that are set to transform our ne “Brisvagas”!

Queens Wharf – Casino and Entertainment precinct ($3 Billion)

https://www.youtube.com/watch?v=SRyBK9Y3WnA

The Queens Wharf project is set to be a world – class integrated resort development.

– 5 new hotels

– 50 bars and restaurants

– 1500 seat theatre

– Conventions uses

– 3 residential towers

– Major casino

– Estimated to create 10,000 jobs while under construction

The Howard Smith Wharves ($800 Million)

https://www.youtube.com/watch?v=fPAIQOCotMY

Howard Smith Wharves redeveloped as a vibrant waterside destination under Brisbane’s Storey Bridge

– Boutique five-star hotel

– Exhibition space

– Premier restaurants

– Retail

– Community facilities

– Parklands

Brisbane Live Precinct – Roma Street Parklands ($2 billion ‘Brisbane Live’ ultra-entertainment precinct) https://www.youtube.com/watch?v=5gxSLTdLatY

Similar to Madison Square Gardenin New York City, or Melbourne’s Federation Square
The ability to transport thousands of spectators in and out of the precinct within just minutes
the centrepiece of the Brisbane Live plan is a new 17,000 seat world class arena which will showcase international superstar concerts and performances as well as world sporting events
4000-capacity rock club
surrounded by multiplex cinemas
restaurants and bars
Giant screen and amphitheatre catering for around 15,000 people

Other notable upcoming projects:

– The $800 million Brisbane Quarter to the west. The Brisbane Quarter will consist of an 82-storey residential tower, a 39-storey office building and the 32-storey W Brisbane Hotel.

– Brisbane Airport’s new $1.3 billion parallel runway

– The $1.54 billion Brisbane Metro rapid transit system

– A new $100 million cruise ship facility at Luggage Point.

The above is a snippet of the exciting infrastructure developments in the Brisbane CBD and Brisbane Airport and surrounds. These will see a massive growth in employment over the next 6 years during the construction phase followed by a legacy of massive employment when these projects are fully operational. All great reasons to consider Brisbane for your next property investment.

Read more: http://goo.gl/cXnPky

Aug 31

0

Investment property ‘hotspots’ moving further out

By Hugh Frame | best investment, Economy, Investment, Market, News, Real Estate | No Comments

Investment property ‘hotspots’ moving further out

As the growth in the last two years in areas Like Oran Park and Schofields have shown, investment property ‘hotspots’ are moving further out from the CBD.

The commuter hubs around our major cities were usually within a 20-50km radius from the centre of the city but as our major cities sprawl, we now have commuters who are regularly travelling up to 150km each day just to get to work.

Even The Gold Coast is prooving popular for Brisbane commuters

House prices and high rentals are forcing Sydney city workers to live as far away as Wollongong or Newcastle. In Melbourne, commuters are travelling into the city from Geelong, Ballarat and Bendigo and in Brisbane; the regular commute is common from the Sunshine Coast and the Gold Coast.

Demographer Bernard Salt says the burgeoning and established commuter hubs are growing, attracting “substantial populations”.

The principle reasons stated by Salt for commuter hubs extending out are improved train travel times and upgrades to road links. These certainly make the daily commute more manageable, but there are other reasons why we are seeing demand and price growth in some of these commuter hub areas.

Many of our new areas are being built as integrated towns or small cities in their own right. They are not just expanding commuter suburbs, but places with their own town centres and industrial estates and office blocks as well as other necessary infrastructure like schools and hospitals. They are becoming employment hubs in their own right, offering new local jobs to the increasing population.

Another factor is the rise of technology. Since the early part of this century, executives and business owners have been taking advantage of electronic communication to base families in life-style areas such as the Gold Coast where businesses can be run with a phone and computer with an occasional commute to Sydney or Brisbane. The idea of living away from the hustle and bustle of city life is very appealing to those seeking a beach or country lifestyle for a growing family.

So it’s not all about commuting and convenience to the jobs in the city. It’s often about lifestyle and affordability that contribute to investment property ‘hotspots’ moving further out. Read more: http://goo.gl/rd5QZs

Aug 11

0

Olympic seven’s gold medal and buying an investment property

By Hugh Frame | best investment, Investment, News, Properties, Property Research | No Comments

Olympic rugby seven’s gold medal as a victory for women’s sport

Team play will make Buying Investment Property so much easier! Olympic seven’s gold medal and buying an investment property

“Australia made history by winning the first gold awarded in women’s rugby sevens at the Olympics with a tight 24-17 triumph over trans-Tasman rivals New Zealand at the Deodoro Stadium.

The Australians had been pre-Olympic favourites, courtesy of winning the 2015-16 World Series, but were forced to weather an early attacking storm from New Zealand before prevailing with a four tries to three win.

Rugby sevens is among the fastest growing sports in the world and the number of women participating in the sport is enjoying a boom.”

These Australian women are certainly a supreme example of how a good group of individuals can become world beaters in an integrated team. Excellent team work will always provide a much better outcome than the sole individual. It’s obvious in any Olympic team sport but maybe not so obvious in the Men’s 400m freestyle with Gold to Australia’s Mack Horton. Even in these supreme individual performances there is a huge engaged team of parents, coaches, physiotherapists, sports psychologists and team mates behind the individual performance.

As in sport, your financial investment success can be improved by forming a strong team of professionals around you. This is part of the standard service Lime property Solutions provides to our clients.

Olympic seven’s gold medal and buying an investment property. Investment in the best locations with investment properties

Here at Lime Property Solutions, we are an industry leading comprehensive investment company with ample experience and expertise. If you are considering buying investment property, we can assist you in fulfilling your needs and goals. We strive for excellence and our team of professionals continually aim to meet and exceed your expectations. We prioritise your needs and requirements to ensure your satisfaction. We offer exceptional buying investment property services that will lead to the right path.

Our mission is to partner our clients in building a substantial diversified property portfolio with minimal risk and maximum growth. As part of our buying investment property services, we provide you with a unique property investment strategy in line with your personal situation. We source the excellent properties that meet your buying investment property criteria. In addition, we manage and organise all your support services for now and your future.

We have been in this industry for many years now and with over 30 years of combined experience, we carry an impressive portfolio of past success stories. When you are interested in buying investment property, we have got you covered. Our team will help you through every single step of the process and ensure you are equipped with the information, tools and resources to achieve your goals.

If you would like to read more about our hugely successful rugby sevens Gold Winning team, try here: http://www.abc.net.au/news/2016-08-09/womens-rugby-sevens-rio-2016-victory-for-womens-sport/7704298

Jul 26

1

By Hugh Frame | banking, best investment, finance, Home Loans, Mortgage, News | No Comments

The best investment loan is not the cheapest

As interest rates continue to fall and the prediction being they may fall even further next month, many borrowers and investors are considering changing lenders to take advantage of even cheaper rates; the issue that must be considered, particularly for active property investors is that the best investment loan is not the cheapest!

The lowest investment loan is not usually the best for your investment property

There are now over 1000 different home loan/investment loan products in the Australian property market and trying to work through them is even trickier than trying to find the best mobile phone plan to suit you.

The three areas we believe a property investor should be concentrating on are:-

Flexibility – a loan that will allow you ‘movement’. If you decide to move house, or borrow some money for renovations or another investment property, or need to reduce your repayments while the kids are at high school a no-frill loan generally won’t have the redraw facility and you need. In particular you will need sub-accounts, some which will be fully tax deductible, and some that will have no tax deductibility.

Interest rate – we are not suggesting that this is not important, it obviously is. However, a good broker nearly always negotiates a very favourable discount from the advertised rates so working through the advertised rates only can be unhelpful.

Off-set accounts – These can be a great feature. Funds deposited in a standard interest bearing account you will probably earn less than 1.5 per cent a year and interest is normally taxable! However, when you deposit money in an offset account the interest credited should be the same as that charged on the investment or housing loan.

Your Lime property investment consultant will explain how an investment loan would potentially impact your financial circumstances. Working with a highly experienced property investment Mortgage broker can help you to explore the implications and perhaps structure your loans in a way that your home mortgage may end up being paid off much faster than you ever thought possible. This type of structure is not possible on a very low interest ‘no frills’ loan so The best investment loan is not the cheapest! Read more : http://goo.gl/f08Ha1

Jul 11

0

Property prices still continue to rise

By Hugh Frame | best investment, Economy, Investment, Negative Gearing, News | No Comments

Property prices still continue to rise

If you have been keeping an eye on the value of your property investment portfolio over the last quarter then you’d be quite happy to note that unlike the first quarter of this year, property prices still continue to rise!

It appears that a very long general election, cold and wet weather and the effects of ‘brexit’ were not enough to stop property prices continue to rise over most of our capital cities.

CoreLogic’s monthly house price index indicates that most of the loss that we witnessed in Sydney over the first quarter has been gained again with house price growth of 6.8% in Sydney and about half that in Melbourne.

The further interest in what are already unaffordable markets is being attributed to the interest rate cut in May which gave owner occupiers and property investors a little more encouragement to spend more again on property. Another factor that supposedly increased property investment activity was the pre-election fear of losing out on negative gearing if Mr Shorten had ended up forming our new Government.

Domain Group chief economist Andrew Wilson said the Sydney and Melbourne results were not surprising, particularly after a month of strong auction clearance rates,

“Auction clearance rates increased in every capital city [in June] except for Melbourne, which was flat,” Wilson said.

“We would expect to see house price growth following these results.”

Sydney’s auction clearance rate increased to 71.7 per cent over June, compared with 69.2 per cent in May, Domain Group data shows. One year ago, the auction clearance rate was above 80 per cent.

It is probably worth considering if auction clearance rates in the high 60’s and low 70’s are particularly good, especially when we are looking at a hugely reduced number of auctions in the first place, so maybe these results are a little more surprising than we expected?

Are you ready for your next property investment?

By Hugh Frame | banking, finance, Financial, Home Loans, News | No Comments

Are you ready for your next property investment?

It’s a new financial year, you really need some tax relief, you want to start accumulating wealth for your future and you have decided to buy another investment property, but are you ready for your next property investment?

The first thing you should probably do is test out your borrowing capacity and ensure you have the funds to go ahead to make sure you are ready for your next property investment.

It’s a good idea to check your credit rating before applying for your next property investment loan

It is surprising that only 29% of Australians have ever checked their credit rating and yet it is possible to do this free of charge once every year.

It is also surprising, as we have seen with a couple of clients in the last year, that your credit rating may be a lot worse than you imagined, simply because you have been managing your finances too well! Your credit rating can be affected simply by considering a change to loans, looking for new loans and switching loan providers. It would seem that the credit rating system views people who are often changing loan providers or credit cards as ‘high risk’ as they may be constantly changing because they are under financial presure to pay their bills. Very often people are changing just to manage their financial position better and have had no problems or late payments at all and yet their credit score is being lowered.

It is also surprising for some to find out that a small problem they had a few years ago and which has been forgotten about after it was cleared up, still have this period reflected in their credit rating.

Sylvia Pennington of the SMH gives us five tips to ensure we use this new financial year to clear up any problems we may have with credit rating agencies. It’s always possible that something may be on your credit record that should not be there and you can appeal. So follow the tips below and ensure that you are ready to buy that next investment property.

Tips for a glowing report

Credit reporting agencies, including Veda, Dun and Bradstreet and Experian, offer consumers a free copy of their credit report every year. Here are some tips to keep yours healthy.

Check your record for defaults and pay any outstanding debts.
If personal data or debts are incorrectly listed, contact the credit agency and the creditor to have them amended or removed.
Establish direct debits to ensure your bills and loan repayments are on time.
Don’t make unnecessary applications for credit – too many inquiries in a short period can indicate you’re in financial distress and send your credit score south.
Prevent debts becoming defaults by alerting creditors early if you’re having trouble making payments.

Investment property –how much can I borrow

By Hugh Frame | banking, best investment, Economy, Financial, Investment, Negative Gearing, News | No Comments

Investment property –how much can I borrow?

Investment property –how much can I borrow? The answer to the question, “ Investment property –how much can I borrow“, seems to change month by month and sometimes week by week but currently, in a nutshell, the answer is an awful lot!

The critical changes in the mortgage market over 2015 with the introduction of tougher bank lending rules for property investors now seem to be being reversed. Most of the big banks decided they would not lend for property investment at all if mortgage insurance was necessary, so in most cases, the property investor had to be in a position to borrow only 80% of the value of the new investment property. At the same time, the amount they were prepared to lend as a ratio of income was also decreased quite substantially making it much more difficult for buyers to fund an investment property.

Investment property –how much can I borrow. Investment property borrowing capacity seems to vary weekly

Now, we are told, some lenders will write loans that were 9.4 times a property investor’s income and we are also seeing banks like Westpac now prepared to lend up to 90% of the value for property investment. In a few cases, some lenders have not dropped their Loan to Value ratio for property investment below their ‘normal’ 95% LVR.

So for a new Investment property –how much can I borrow today? Australian banks have always allowed property investors to borrow a significantly larger multiple of their income than owner-occupiers, despite a crackdown on lending to landlords. This has just been confirmed by some new research by Macquarie. This outcome should not come as a surprise to anyone although the tone of today’s media article suggesting that more tightening in mortgage lending is likely suggests otherwise.

Why would any sane lender offer more to an owner/occupier than a property investor? The lender is obviously going to include some, if not all of the property investment income in assessing a loan as well as, in most cases, some of the tax advantages the property investor will be entitled to through negative gearing. This obviously means that the property investor can afford to borrow substantially more on than an owner/occupier who will have to find the funds to pay the entire due mortgage with their after-tax income!

The research also points out that banks were offering deeper discounts of up to 1.4 percentage points off their standard variable mortgage rates, a trend that is likely to squeeze bank profit margins; something that will probably not give many of us sleepless nights!

Lose your credit rating without even knowing

By Hugh Frame | banking, finance, Financial, Home Loans, Mortgage, News, Research | No Comments

Lose your credit rating without even knowing

How can you lose your credit rating without even knowing that you had done anything wrong?

Cartoon by Michael Mucci
Banks seem to have us where they want us

Just a couple of weeks ago we had a new client with a very stable well-paid government job, excellent equity in an investment property, owing nothing substantial to anyone apart from his very manageable investment loan and looking to buy another property but to our astonishment was actually rejected by the first lender approached on his behalf. Another lender was approached and the client had no problem in getting the loan after “the problem” was fully explained.

….. So what was ‘the problem?’ Quite simply, he had approached a couple of lenders by himself over the last year to see how much he could possibly borrow. In his search, he had found very good lower rate deal and switched his loan – no problem. While he was doing this, he took advantage of a couple of really good interest free deals on a couple of credit cards, something that is encouraged by our government and some financial planners, “If you’re not happy with your lender, shop around and move” and why not take advantage of interest free periods on your credit card?

This all seems sensible and very reasonable, until he applied for a new investment loan only to discover that his credit rating had been lowered considerably to the point of him being a bad risk! Like the author of today’s SMH story our client had never defaulted or been declared a bankrupt and had been in well-paid secure employment for over 10 years. His rating was below 700. The ratings are done on a scale from 0-1000, excellent is 800-1000; very good is 700-799; good 625-699; OK 550-624 and below average was zero-549.

The problem? … every time he applied to a credit-card provider for a new loan or a new card, an inquiry was made to the credit data base and each inquiry, while not raising any concerns, stays on your credit rating and affects your credit rating!

The marks you get because you have changed your loan provider or applied for a new credit card stay on your credit rating for five years until they are rolled over.

Michael Evans conclusion to the article he has written about his own credit rating is,

“In a system where the major financial institutions have significant pricing power, credit score cards can feel like they’re stacked against customers trying to encourage competitive behaviour.

Trying to get one back against the banks comes with a cost, and it’s not always in the fine print.”

I agree, and it’s well worth your time to have a look at the full article on this link: http://goo.gl/Uv6eUz

May 20

0

Investors surge back into property market as election looms

By Hugh Frame | Auction, domain, News, Property Research, Research | No Comments

Investors surge back into property market as election looms

Interesting headline from Domain “Investors surge back into property market as election looms.”

I read this story initially with the thought that this really makes sense for a couple of reasons, however the large spike in purchases and signs of a booming market yet again, just don’t seem to be here!

For any would be property investor the time for procrastination is certainly gone. While we still don’t think that we will see a change in the law for negative gearing, in the unlikely chance that this does occur, Mr Shorten and his team is assuring the Australian public that all current rules will be ‘grandfathered” which basically means that there will be no changes what so ever to anyone who owns an investment property before any new rules are introduced.

With this knowledge, it would be quite understandable to see “Investors surge back into property market as election looms” but the on the ground reality for Lime Property Solutions at least is that there has been no major increase in enquiry over the last few weeks and as far as we can see from number of auctions and clearance rates, there are no signs of a rival in house price growth in Sydney and in fact we are still seeing a market in correction with prices still sliding … not something you would expect with a surge of investors heading back to the market.

The recent article states:

“NSW remained the favoured state for investors, with investor activity up 30 per cent over the month to March, an analysis of Australian Bureau of Statistics data by Domain Group chief economist Andrew Wilson shows.”

“Residential investors have stormed back into Australian housing markets with lower interest rates and the prospect of changes to property taxes set to continue to fuel growth in this market segment over coming months,” Dr Wilson said.

While this statement may or may not be true, I’m not quite sure why figures for March are the signal that investors are coming back into the market because of an election called two months later?

I do think Dr Wilson doers a great job of presenting himself as The Expert while constantly supporting and spruiking up the real estate market, particularly in Sydney. I totally agree with the concept of investors surging back into property market as the election looms as it makes such perfect sense for them to do so. We’re just not sure if the headline is a wish for the near future rather than the reality of the day.

Full story: http://goo.gl/I7nGPu

News

Do you want a Big Australia?

Great reasons to consider Brisbane for your next property investment

Investment property ‘hotspots’ moving further out

Olympic seven’s gold medal and buying an investment property

Olympic rugby seven’s gold medal as a victory for women’s sport

Property prices still continue to rise

Are you ready for your next property investment?

Investment property –how much can I borrow

Lose your credit rating without even knowing

Lose your credit rating without even knowing

Investors surge back into property market as election looms

Investors surge back into property market as election looms

Interesting headline from Domain “Investors surge back into property market as election looms.”

I read this story initially with the thought that this really makes sense for a couple of reasons, however the large spike in purchases and signs of a booming market yet again, just don’t seem to be here!

The recent article states:

“NSW remained the favoured state for investors, with investor activity up 30 per cent over the month to March, an analysis of Australian Bureau of Statistics data by Domain Group chief economist Andrew Wilson shows.”

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