Getting Down under » mortgage

Investment Property In Sydney Heats Up

Mark — Thu, 04 Feb 2010 09:36:20 +0000

It has been a busy start to the new year in the Sydney investment property market as good quality properties are being sold quickly to eager buyers – sometimes at their full asking price.

I’m not yet sure whether this strong buyer demand will be maintained throughout the year – or whether the strong results from sales early in the year will induce others to list their properties for sale – providing some increased supply to keep prices more in balance.

As I have previously reported, the Australian residential property market has fared better than several other markets internationally over the last 20 months. Several local market watchers (professional and amateur) saw this as being in part due to the government’s housing stimulus for first home buyers – and predicted that the winding back of these subsidies would have a slowing effect on property markets – particularly the first home buyer belt, which in Sydney is the A$500,000 to A$650,000 segment.

Contrary to these predictions, I have observed a lot of strength in this sector in early 2010.

I have clients I am currently helping to buy an investment property in the Sydney inner-ring suburbs (within 5km of Sydney CBD). This is a market with a lot of attraction in terms of amenity, rental demand and potential capital growth.

When I’m searching in particular areas, I spend time there, getting to know the suburb – and meeting the local selling agents – as well as inspecting loads of properties. Agents are consistently reporting high attendance at open house inspections this year – at even the most modest properties. And most of the interest is from mum and dad investors, including those looking for a ‘safe home’ (pun intended) for their retirement savings.

Anecdotally, many properties on my clients’ watch lists are selling before their scheduled auction date, sometimes within the first week of being offered for sale. Last week I attended a private inspection of a property not yet marketed – and within two business days there was offer and acceptance at the full asking price.

I don’t want to generalise and say that all Sydney property markets are on the boil – as thats not the case – but it is definitely the case in some specific areas. And in times like this it is even more important to be objective – and to ensure that the proper amount of due diligence has been done – before you sign the contract. This way you stand a better chance of avoiding over-paying and avoiding buying a lemon.

So – what should you always do?

Firstly – research your target markets. Understand the supply and demand factors for the type of property you are focused on. Know what has sold recently – and how much for. Understand the historic capital growth rates for the area – and the median and average prices and gross rental yields.

Be objective when assessing each property. Have a set of criteria – and measure each property against your wish list.

Have the contract properly reviewed by a qualified conveyancer or solicitor – preferably someone you already know and trust.

Engage a qualified building inspector to conduct a building / pest inspection. Obtain a strata inspection for any strata-titled apartment or townhouse.

It can be tempting to jump at an opportunity in a hot market – and neglect some of these prudent steps – particularly when a property looks too good to be true.

As a licenced buyers agent – a large part of the benefit I provide to my clients is my objectivity. Sure, there is often money to be saved in a well-negotiated purchase, but having someone you trust providing their expert / objective viewpoint and ensuring all the necessary legwork is done is what stands out in most buyers’ minds.

Ian Macintosh, L.R.E.A.
Searchlight Property

$42 Billion stimulus package announced

Mark — Tue, 03 Feb 2009 07:02:54 +0000

We’re well past Christmas however Kevin Rudds Government continues with the handouts, announcing today that Low and middle-income earners will receive a $950 bonus as part of an extra $42 billion of spending in its latest bid to defy the economic gravity that is dragging down economies around the world.

The spending package, over the next four years, includes $28.8 billion for infrastructure, schools and housing, as well as $12.7 billion cash payments. The payments include one-off bonus payments of $950 each for low- and middle-income households and individuals through five bonuses, to be paid in March, 2009

The extra spending was contained in a package of measures announced today by Prime Minister Kevin Rudd and Treasurer Wayne Swan, as the Government battles to adjust its policies and forecasts fast enough to cope with the rapidly deteriorating global economy.

”The Government will move heaven and earth to reduce the impact of the global recession on Australia,” Mr Rudd said.

The new package takes the total amount spent by the Government on stimulating the economy since September to $88.7 billion, including bank deposit guarantees, the car industry package, as well as investment in residential-backed mortgage securities, local government, infrastructure projects, and on the states through the Council of Australian Governments (COAG).

House sale progressing well

Mark — Thu, 30 Aug 2007 03:49:09 +0000

It’s been all of 2 weeks since I announced that we had taken the plunge and decided to buy our first bricks and mortar here in Australia.

Since then, things have progressed well. Firstly the Real Estate Agents were pretty insistent that we were able to deliver an ‘unconditional loan approval’ letter from the bank.

This is basically a letter that the bank provides you confirming that they are willing to loan you the dosh we need to buy the property.

After the issues we had when trying to sell our house in the UK this makes perfect sense. The implications of not delivering the Mortgage Promise within two weeks of signing the offer papers would have been the return of the house onto the market. The $5000 deposit we paid to the estate agents to secure the property would have also been in jeopardy.

Thankfully we were able to get the loan for the amount we needed. It’s still pretty shocking how much money you can borrow in Australia and although we didn’t overstretch ourselves to much it’s still pretty scary to be back in debt again!

Since leaving the UK and selling up we have spent 8 blissful months completely debt free. No credit cards, loans or anything – it was nice whilst it lasted

Still, I’m hopeful that it will be worth it. Our new house is setting us back just over $620,000 (about £260k in UK money). This is quite a bit more than I was expecting to pay for a house in Australia when we started the dream about 4 years ago.

At that time we could have probably picked up the same house for about half the price but as you’ll have read in some of my other entries the times have really changes.

Still, I know the housing boom is starting to slow down a little but even if house prices increase 10% a year for the next 5 years I’d still rather make 50% of $620,000 then 50% of something a little smaller.

Anyway, when all is said and done, it’s a really nice house and even though we only intend to live there for the short term (say 5 Years) it will make a good home for the four of us (once junior number two finally decides to make an appearance!)!

So, we have the mortgage offer and are now struggling through a pile of paperwork which needs signing.

In Australia, conveyancing companies do all this kind stuff for you. You pay them a set fee and away they go like a rabid rabbit digging through mountains of paperwork and land registry information.

Fee wise you’re looking at about $1800 but for this you’ll get all the appropriate checks done on the land (just to make sure your not buying a house sat on the site of an old mine). They also arrange for the transfer of deeds and what not!

I’m not going to go into to much detail about everything involved as I’ll save that for another post once we get the final bills. Just to say that all is going well and we’re still on track to pick up the keys by the end of the month… Yay!

Things progressing quite well

Mark — Mon, 30 Oct 2006 16:06:45 +0000

Well since accepting the latest offer last week I’m really pleased to say that our new buyers are a breath of fresh air and things appear tp be progressing quite well.

Their mortgage has been approved, the survey fee’s have been paid and the surveyor comes to survey our house this Wednesday. We might even get our sold sign back this week.

The first full week spent unemployed has been pretty strange but I’m slowly but surely getting into the swing of sorting things out.

I’m assuming it’s just a bloke thing but its amazing how much crap you can accumulate over the years.

At this rate I wished I started the sort our process before we even sent the application forms off for the Visa’s. Still, I’m putting a pretty brave face on things if I do say so myself and the charity shops should be well sorted out with clothes, suits, shoes and other items for the next few months. I even packed my first case!

A skip arrives tomorrow so it’ll be time to chuck on the safty gear as I enter the dreaded and dangerous realm known asâ€¦â€¦â€¦.the loft!

Hopefully I’ll survive to write another entry!

House Sold – Again

Mark — Tue, 24 Oct 2006 12:57:08 +0000

Well, in the last few days we have had three offers on the house from three different people and we have accepted the offer that was both the highest and appears to be the least risquÃ©.

The only potential risk is that the couple buying our house are in a chain, still after the girl who couldn’t get a mortgage and the couple who messed us around for weeks before announcing that they were having marital issues this one should hopefully be the one that goes all the way through.

The person buying our buyers house (stick with me) is a first time buyer, the Halifax have confirmed with our buyers estate agent that their buyer has a mortgage in place and everything appears to have been confirmed OK

Let’s hope this is third time lucky for us.

I think it’s unlikely that we will be able to get everything sorted before we leave on the 24th of November but it would be really great if everything is good to go before we depart.

It’s strange that we don’t feel particulalrly excited, but we’ve been through this so many times now it’s pretty difficult to get that excited when we’ve been through the emotional lows when previous offers have fallen through.

We also popped into the Halifax on Saturday to give two weeks notice to terminate our contract.

We told them we will be going elsewhere unless of course we accept an offer within this two week period.

Looked like the threat brought with it some added luck. Lets just hope it continues.

Lots of interest and still no buyer

Mark — Thu, 19 Oct 2006 08:20:34 +0000

Well, the house has been back on the market now for a few weeks and we are getting lots of people through the door. Still no buyers though.

The chap who was really interested has decided that he won’t pay more then his initial offer (which wasn’t a satisfactory one) so we’ll leave him simmering for a while.

Not holding out much hope for this chap anyway. At the end of the day, I’ve asked him twice now to formally confirm his offer with the Halifax but still nothing.

Its also interesting how many people are trying to pull a fast one and trying to take advantage just because we are moving abroad.

We even had one chap saying to the missus last night..’You moving to Australia, you give us cheap price..yes?’

Err, no

We may be moving abroad but we aren’t going to sell the house for a pittance, were not that desperate (yet!) At the end of the day, if we don’t sell before we move out in just over a months time then we’ll have a mortgage and rent to pay at the same time.

It’s not a perfect situation but we’ve budgeted enough to be OK for a few months and I seriously think if it does come to that, an empty shell would be easier to sell. Hey that rhymes!

Keeping Calm and taking stock

Mark — Wed, 27 Sep 2006 15:19:43 +0000

Well, after becoming seriously vexed with the Crapifax yesterday, I’ve finally managed to compose myself enough to take a step back and see where we are after finally getting a call back.

The buyers who had their mortgage app refused at the last minute by the Halifax when their P60 couldn’t be obtained have now completed a second mortgage application with a broker which is going to be sent off this week.

They will also be instructing a survey (once they have paid the fee’s….again) which should take place within the next couple of weeks.

Hope of all hopes that they get the mortgage this time. If they do then great, we’ve only lost a couple of weeks.

If they don’t then arse! We’ve lost months.

The house has been under offer in one way or another for the last couple of months now. If this falls through then we really need to ask the question. Is there is any real value in remaining with the Halifax?

The answer to this is a pretty big no, unless of course we can avoid paying any fees due to the astronomically poor service we’ve received so far.

Back to the waiting game…

When all appears to be going so well..

Mark — Wed, 20 Sep 2006 14:36:14 +0000

Bollocks, B*stard and Sh*T!

Had a call from the Crapifax this morning (aka Halifax estate agents) to advise us that there is a problem with the mortgage.

The buyer has lost their P60 and even though the Halifax Head Office gave the buyer the go ahead to proceed with the survey, it now seems that unless they can find their P60 the Halifax isn’t willing to lend them the cash to buy our house.

So, they have now been passed onto a mortgage broker (the same broker that the girl used who couldn’t get a mortgage) to try and identify a lender who’s criteria for lending isn’t so strict!

I am totally and utterly dumfounded. I had a bit of a go at the girl who is looking after (using the term looking after loosely) the sale of our house, explaining that I have given my notice at work on the basis that things seemed to be progressing so well, but don’t worry. When you feel your down there’s always someone at the Halifax to make you feel even….worse!

Well, I wouldn’t go booking any flights says the advisor. We recently dealt with a customer who had booked his flights to Australia and he was in a chain of four buyers. When his house was surveyed he was told that he had over valued it by £20,000 so had to drop his price by £20k in order to catch his flights.

Great! At least its unlikely that we have over valued our property, however we need to get the house surveyed again! So its going to be a number of weeks before any thing positive happens.

We’ve gone from a high to a barrel scraping low! We should know in the next couple of days if our buyers can get a mortgage with another lender but in the meantime its legs,arms,toes and fingers crossed.

We’ll probably try and phone our buyers direct tonight to see if we can get any inside news on whats really happening.

Are things finally starting to happen?

Mark — Thu, 24 Aug 2006 11:05:29 +0000

Well, dare I say it but things almost appear to be happening.

Spoke to the Halifax yesterday who are still beyond useless (not giving us the promised updates resulting in a number of ignored call-back requests). However it seems that we are now progressing with our latest buyers which is the best bit of positive news we’ve had from the Halifax for some time.

All of the mortgage paperwork has now been completed and the survey fee’s have been paid. The surveyors will not be instructed by the Halifax until the Mr of the buying party has his employees reference back. This is pretty standard practice apparently and is expected to be back by early next week.

The SOLD sign has been ordered and is expected any day. Daft though this may sound, this is probably one of the things we’ve been longing for the most.

I know getting the sold sign doesn’t make everything legally binding and it doesn’t mean the house is really going to see. Its just psychological I guess.

Driving around the corner every day when I get home from work to be confronted by our ‘For Sale’ really gets you down after a while. Being presented by a nice SOLD sign will really give us the boost we need to get us to the next level

The fact that the survey fees have already been paid is a good sign as this represents quite a big sum of money. As our home is just under 10 years old I hope that the survey doesn’t show anything up. If it does we’ll need to fork out the cash to get everything sorted. If its structural it should still be covered by our NHBC certificate but we’ll cross that bridge when we get to it.

In other news, we’ve had a quote from a company (which appears quite reputable) called airpets for our two cats. It looks like all in all its going to cost us just over £2k to fly the cats out to Perth and house them for the 30 days they’ll need to remain in quarantine. Its a lot of money but we couldn’t leave the boys in Blighty, they are part of the family after all.

Anyway, fingers crossed and lets see what the next few days bring.

The joys of property sales

Mark — Thu, 17 Aug 2006 08:28:21 +0000

Ahh the delights of selling a property or should that be AHHHHHHHHHHHHHH!

The lady who was supposed to go into the Halifax yesterday to finalise the mortgage details and pay the surveyors fee’s was unable to make her appointment because she was to tired after working a night shift.

So, we’ve been shunted back to Saturday now. She did come back with her family for a second viewing last night though. They are a really nice family with a baby so our house is spot on with the pre-made nursery, fully enclosed back gardens etc.

We’ve taken the opportunity to swap numbers this time and it’s obvious that she really likes the property to!

Anyway, we’ll need to wait until Saturday now so we’ll see what this weekend brings…again!

Getting Down under » mortgage

Investment Property In Sydney Heats Up

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