Growth gaining momentum for more affordable homes

An interesting article in the AFR on April 2 - saying units are rising at a faster rate than houses! 

The growth rate for units and lower value houses have gathered momentum in the past three months, with values in the lower end jumping by 3.1 per cent, nearly five times faster than the upper end.

A main reason is that more downsizers seeking to reduce their mortgage are joining the buying frenzy! Says Ivan Kaye of BSI Finsnce.

A number of our clients are downsizing to reduce their debt due to increased interest rates .

Speaking to a financial adviser at Ark was a gamechanger for Jane (name and suburbs changed) 

Jane , who was planning to retire in 8 years had built large equity in her home but was struggling with cash flow. She sold her  large family home to relieve financial pressure.

“I just wanted to get rid of my mortgage and buy something smaller but comfortable and be able to sleep at night.”  said Jane 

Jane sold her house for  $2.5 million, bought a unit for $1.5 million in Leichardt and put the money in Super - enabling her to be able to retire comfortably! 

Tim Lawless - Research Director of Corelogic has said that demand for affordable homes has started outperforming the top end from last year - in each of the major capitals.

“With housing affordability becoming more challenging and borrowing capacity lower than a year ago, it’s no surprise to see demand being skewed towards the middle-to-lower end of the value spectrum,” Mr Lawless said.

“Originally, it was mostly investors and first-home buyers competing for those stock, but anecdotally at least, people are looking to reduce their debt, and maybe take advantage of the strong capital gains and cash out, downsize or move to a cheaper location where they can reduce their leverage.”

In Brisbane, house prices rose by an average of 7.4 per cent in Kingston, Riverview, Logan Central and Leichhardt in the Ipswich and Logan districts, where median values remained below $600,000.

Those were in stark contrast to the weaker performance in Brisbane’s upper end suburbs such as Hamilton and Ascot, where median prices reached $2.3 million and $2.5 million respectively. In the past three months, house values dropped by 3.7 per cent and 2 per cent respectively.

“A lot of downsizers are cashed up, so they can bid up and drive values higher in that segment of the market,”

“Depending on the suburb, big townhouses, a three-bedroom semi-detached house or apartments are highly sought-after by downsizers, making it harder for investors and first-home buyers to compete.”

Let me know if you are interested to buy or refinance your property by clicking here and contacting me at bsi finance 

Source - Australian financial review   And CoreLogic 

Let me know if you are interested to buy or refinance your property by clicking here and contacting me at bsi finance 

contact me at bsi finance 

What’s the next Driver of First Home Property Buyers?

Over the past two decades, the quarterly count of first homebuyers has typically oscillated between 20,000 and 30,000. 

Except for 2 periods

1. The immediate aftermath of the GFC in 2009, and
2. The COVID-19 lockdowns spanning 2020 and 2021.

Why? 

• A dramatic reduction in interest rates? No. 
• A withdrawal of property investors from the market? No.
• A willingness to take on high LVR lending? Definitely not.

The answer is Savings says Robbie Baskin from Frontya 

Six months before these two distinct periods, a dramatic escalation in the savings rate was observed. The typical consumer was able to bring forward their ability to enter into the market with an adequate deposit. Once the savings rate stabilised, the number of first homebuyers went back to normal.

Household savings is clearly down and according to APRA, high LVR lending is down and property investor participation is up. 

A 'deposit gap' is emerging - which will bring company’s like  FrontYa to the fore - who will be able to help lower the 'deposit gap' through  alternative funding schemes.

The new driver that seems to be emerging is the State and federal shared equity schemes .

Looking forward to see how this will change the landscape - enabling frontline workers to own their own homes by partnering with the government !

Property in 2024 - hot spots - and what’s driving prices

I came across an abc programme on property - what’s happenning to property prices in 2024?

Hotspots

Perth,Adelaide,Brisbane 

Drivers - lack of supply, low unemployment , need for more migration. , increase in population 

9 strategies to prevent procrastination and save time

This personal productivity sheet identifies 9 strategies that will help you just get things done - help you prevent procrastination,efficiently manage your time, energy, and resources to be more focussed on achieving your goals. 

Thanks for the post David Sim Smyth  - with credits going to  Andrew Lokenaugh

Here are some key aspects of personal productivity:

👍 Give this post a thumbs up

💬 what are some of your procrastination tips ? 

#productivity #personelproductivity #maximieyourpotential #potential

Where Property is heading in 2024 - what the gurus are saying!

Rising interest rates and the crippling serviceability gap -  between households’ borrowing capacity and dwelling sale prices should be causing a dampener on housing prices - but they are not!!! 

Aspiring house buyers in Sydney are becoming priced out from the cheapest segment and

buyers will need to look towards the city’s outer fringes to afford an entry-level house - says Nila Sweeney of the AFR 

But there are still some gems to be had!!!

In the last 12 months  - a client  has purchased a sub $1m property in the inner west while another has just purchased one in potts point ! Says Ivan Kaye from BSI Finance .

Lloyd Edge, buyers’ agent and author suggests  Coogee, Kingsford, and Kensington are  hotspots for 2024 

Nerida Conisbee, chief economist at Ray White, suggests the Hills District and southwestern Sydney.

Mathew Tiller, LJ Hooker Group’s head of research Dee why is a hotspot - where units dropped 8pc last year and Glenmore Park where prices have fallen 2% to a million 

Leanne Pilkington, CEO of Laing and Simmons suggests buying outside Sydney - consider infrastructure and growth in a location when investing she says - look at where the Metro is expanding - from Tallawong all the way to the city with places like Five Dock . 

Leanne says to focus on what is going to meet the needs of your family in a location that’s important for you! 

Inspired by broker news 

What’s James Packer investing in in 2024?

Interesting article from the Australian and around the traps of what James Packer is up to in 2024 

Packer is backing  three listed companies – after replacing  Mike Johnston and Guy Jalland with financial guru - Lawrence Myers.

• Mark Zuckerberg’s Meta Platforms, $223m
• Nvidia Corporation and 221m 1 up 46pc to 1.8 trillion 
• And Adobe. $216m

He’s dumping 24 companies across financial services, hospitality, tourism and private equity-led funds including  SAP, Netflix, Expedia and Hilton Worldwide, Ta-ta, Visa and MasterCard, Blackstone, Apollo and KKR. 

He’s punting  

• Datadog
• fintech DLocal and 
• Jack Dorsey’s payment company Block Inc. (formerly Square)  

He’s selling 

• Duolingo, 
• construction software group Procore Technologies and 
• Spotify.

He’s  keeping 

• Fiverr International, 
• Monday.com and 
• Paramount Global, which owns Network 10 – 

https://apple.news/Abz-da20IRSCkoeYGjhEejQ

Other projects 

Packer has teamed up with American actor Robert De Niro to build a $500 million resort in Barbuda, aiming to open in late 2025.

Packer is a major investor in the Australian rugby league team, the South Sydney Rabbitohs. 

He is also a philanthropist and has donated millions of dollars to charity. 

- what are the top 1pc of wealthy people in Australia worth

The amount of money it takes to make it into the top 1 per cent of the wealthiest Australians has doubled to $8.25 million since 2021, according to Sydney morning herald reporter , John Collett (see link below) 

It is now the third highest among the countries and territories covered by global property consultancy Knight Frank’s Wealth Report 2023, behind Monaco at $US12.4 million and Switzerland at $US6.6 million.

A large contributor to the top 1 per cent wealth level doubling in Australia over the past two years has been prime residential property performance, recording an upward trajectory,

It found the number of “high-net-worth individuals” – defined as those with a net wealth of more than $US1 million – is set to grow by 71.1 per cent between 2022 and 2027 in Australia: from 2.2m  in 2022 to 3.8m  in 2027.

The number of “ultra-high-net-worth individuals” in Australia – those with a net wealth of more than $US30 million – is set to grow by 40.9 per cent over the next five years: from 17,456 in 2022 to 24,589 in 2027.

#bsifinance #arktotalwealth Chris Magnus Brandon Elliott CFP® Ahad Abul Kalam (CA, CPA) Microsoft ASX #property #shares #debt #leverage

Sydney morning herald reporter , John Collett 

What does a mortgage broker do

Want a mortgage broker - go to - www.bsifinance.com.au

Great insight form my friend Sal Carrero

Having owned a mortgage broking business in Australia that managed two billion dollars worth of new loans annually, I've seen firsthand the monumental difference a seasoned broker can make in a client's financial journey. Mortgage brokers bring a level of market understanding and expertise that is hard to match.

 Their day-to-day involvement in the mortgage industry equips them with a nuanced understanding of evolving lending criteria, interest rates, and product features. This knowledge is invaluable, ensuring clients are presented with loan options that are not just suitable but optimized for their unique financial situations. The process of loan comparison and application can be daunting and time-consuming.

Standard definition 

A mortgage broker is a professional who acts as an intermediary between you and potential lenders. They have access to a wide range of loan products and rates from different banks, credit unions, and other financial institutions. They can help you compare and negotiate the best deal for your situation, saving you time and money.

From Felix Ortiz 

A mortgage broker is the go between borrowers and multiple wholesale lenders, assisting in finding suitable loan options. Their responsibilities include assessing the borrower's financial situation, presenting loan offers, and guiding them through the mortgage application process.

They’re supposed to help a borrower get the best loan for their current financial situation. 

So many have lost that and don’t do the “leg work”. Strictly focusing on ease of use for themselves. Rate may differ from program depending on the borrower’s needs. 

From Ed Brittingham 

Think of a mortgage broker as your financial co-pilot for home buying. They'll search high and low for the best loan options, saving you time and money. They'll also handle the paperwork and guide you through the process, making things smoother and less stressful.

As your realtor, I partner with trusted mortgage pros who share my commitment to a smooth home-buying experience. They're experts at navigating the loan market and finding the best fit for your needs. Let me know if you'd like a connection!

While using a broker isn't mandatory, their expertise can be a game-changer. They can help you secure the best loan, save you time, and reduce stress, putting you on the fast track to homeownership happiness!

From Clinton Howell - real estate agent 

A mortgage broker can be a great asset and partner in understanding your financial capabilities for purchasing property, renovations and for re-financing. They can provide mortgage pre-approvals and strategies for budget planning too. I highly recommend working with a trusted mortgage broker. 

From Broker Bill Black

A mortgage broker navigates complex financial waters, connecting clients with a variety of lenders to find the perfect mortgage match. 

This isn't just about having the most competitive rates; it's about understanding each client's unique story and financial goals. They  save clients time and money by handling negotiations and paperwork, ensuring they get a tailored solution that fits their lifestyle. 

In essence, a Mortgage Broker is a financial guide, an advocate, and a crucial part of making property dreams a reality in a streamlined and stress-free process.

From Rahul Dhakad

I think morgage brokers are architects of dream's, crafting financial plans that resonate with the heArtbeat of those seeking a place to call 🏠.

www.bsifinance.com.au

6 ways to get a deposit for a home - buy it starts with the first step

Navigating the journey to homeownership in Australia can be challenging, especially when facing the deposit hurdle. 

The key is to have the right mindset, a vision of what you want - and a smart goal of what you want to achieve .

A goal that is Specific , measurable, Achievable, Realistic and with a time frame .

If you don’t have a deposit , here’s  a quick look at some tips to enable you to get that kickstart!!

1. Leverage Government Schemes: Utilize programs like the First Home Guarantee for a lower deposit requirement. If you are a front line worker - there are some amazing programmes - such as the NSW home shared equity scheme, where Government will fund up to 30pc of a property (new buildings 40pc )

2. Explore Alternative Lenders: Don't limit your options; alternative lenders might offer more flexible terms.

3. Consider Shared Equity: A viable solution for those unable to buy outright, increasing ownership over time.

4. Innovative Saving Practices: Regular saving and expense management can accelerate deposit accumulation.

5. Boost Income Creatively: Side hustles or renting out space can supplement your deposit savings.

6. Professional Financial Advice: Having a financial planner, accountant and mortgage broker in your team is gold . They  can help tailor a plan to suit your unique homebuying journey.

Your dream home is within reach with the right mindset, approach and guidance. 

Let's discuss how we can help you make it a reality.

#bsifinance #bsi #mortgages #loans #ArkTotalWealth #WealthManagement #FinancialPlanning #InvestmentAdvice #AssetProtection #FinancialSecurity #EstatePlanning #RetirementPlanning #FinancialGoals #SmartInvesting #InvestingTips #WealthProtection

Call me on  www.bsifinance.com.Au

People often ask me - what do you need to retire?

People often ask me - what do you need to retire?

To fund a ‘comfortable’ lifestyle the Association of Superannuation Funds of Australia (ASFA) indicates that you would need a passive income of $50,207 for singles and $70,806 for couples. 

Those numbers equate to around $60,000 and $90,000 in pre-tax income today. 

This is of course assuming you own your home debt-free. 

So what capital do you need to retire? 

If you work backwards and assume you have an asset generating 5% yield a single person would need roughly $1.25m (in addition to having their own home fully paid off) and a couple would need $1.75m. 

Average super balances at retirement are $400k for singles and $700k for couples 

leaving a gap of $855,000 for singles and 244% $1.03m for couples. 

The pension - although generous -  is clearly not enough to find your retirement being $25,065 or $482 per week for singles and a combined pension of $39,269 per year or around $755 per week per adults - and with no adequate savings you risk being one of the 33% of Australians who will retire in poverty?

How do you close that gap and not be one of the 33% of Australians are at risk of retiring in poverty?

A tried and tested  way to beat this hurdle rate is using leverage or borrowings to invest in property. 

And based on a number of polls - most think that property prices will increase over the next 10,20 and 30 years !

For a fairly typical property using a 10% deposit, the internal rate of return is better than 13% per annum with  good properties ending up being around 20% per annum over the long term which comfortably beats the real rate of inflation. (As long as property continues to increase over the long term )

Of course you can also  invest in things like tech stocks and cryptocurrencies. 

 Property seems to be  a safe and practical way to escape the poverty trap and have a retirement that looks something like an advert from a SuperFund!! 

A key ingredient , in my view is to have a team around you that you can trust and rely on to help you on your journey to close the gap! 

A good financial planner,  a good mortgage broker (that’s me :) ) is a key cog in this team - be sure that you have one! 

Investing in Property Starts with Developing an Investment Strategy

This popped  in my feed from 2010 - 

And yes - property has doubled in 14 years!!!

1. Investing in Property starts with developing an Investment Strategy!

Before Investing in Property, Shares or other Asset Classes, one should consider factors that include their current financial situation, their existing investment portfolio and their goals for the future.  

Each investor is unique and have different goals for investing – some want a passive income streams, others may want to invest for capital growth so that they can sell their property when they retire, while others may investment in property for their children or parents to occupy. 

The process of building an investment portfolio should involve planning and research vs taking an educated guess on a property and hoping that it will double in value every 10 years. 

A property is a substantial asset, and if one buys a property at the wrong time, it could take many years for ones investment to be successfully realized. 

2.  RESEARCH RESEARCH RESEARCH!! 

Look at the area

 – demographics, infrastructure, population growth/change, desirability of area for tenants, yield, and accessibility to transport, shops and schools…. amongst other factors. 

3.Take emotion out of your decision making process

 Where you want to live vs. where you and to invest are 2 different decisions!!!

For more information, go to www.bsifinance.com.au

Is 2024 the right time to buy an investment property?

2023 has seen a significant increase in rents for investment properties (10pc for units and 7.5% for houses, and according to CoreLogic’s research director, Tim Lawless the lack is supply is indicating that this growth will continue in 2024! 

Is this a good time to buy an investment property in 2024?