The only certainty one has in life is that CHANGE WILL ALWAYS HAPPEN.
Adding to that : \”IN CHANGE THERE IS OPPORTUNITY.\”
With interest rates dropping so low as they have in the last few years, in the
last week, a Reversal has occurred, for Most Property Investors anyway.
Last week 3 of the Big 4 Banks announced interest rate increases by up to 0.29%
Read it here yourself what they’re doing:
ANZ : Click Here To Read
COMMBANK: Click Here To Read
WESTPAC: Click Here To Read
NAB: Click Here To Read
In summary: ANZ & CBA are increasing their rates by 0.27% to Investor Loans.
NAB is increasing its rates by 0.29% to Interest Only Loans (Owner
Occupier & Investor Loans). Westpac has yet to change its Interest rates to
Investor Loans as their IT system currently does not allow them to differentiate
between Owner Occupier and Investor Loans, but I am sure
it is coming….
Not only that, some banks, including Westpac, Bank of Melbourne and St George,
are requiring SMSF’s to stump up more deposits (30% now, versus 20% previously)
on borrowings, so that the bank is only lending up to 70% LVR (loan to value ratio) .
That allows them to reduce their risk and lend less money out at the same time,
in order to fit in with regulatory requirements.
Well that’s the news….my thoughts on this are:
1. It’s Not Necessarily a Bad Thing – with Prices going \”CRAZY\” high in places like
Sydney and Melbourne, it is completely unsustainable. If you look at China and the
recent Stock Market Crash, it’s because the Market got so completely out of hand
and there was no \”handbrake\” to at least slow it down along the way. APRA has
seen what happened in the GFC when finance was easy to get, everyone who
could borrow did, and spent the money liberally, only to realise they had to
pay it back eventually, with interest. If the Bubble Pops, everybody loses…
2. See It As a Warning – and Take Heed.
I always say: \”You Make Your Money When YOu Buy, Not When You Sell\”.
What that means is that you create your profit at the point of purchase, as that
is the only part you can control.
What you sell for is at the whim of the Market, what someone is willing to pay
on that particular day, and this you cannot control.
So whatever purchasing decisions you are making, make sure that if the market
pulls back by 10-20% as it did in 2008/2009, you will be unaffected.
3. Maybe It’s a Good Time To Sell. I am. Lots. All my 13 Blocks of
Land are Sold Now (1 subject To Finance) in my development and we
are getting great prices. Nothing wrong with Cashing Up and
Looking for the next Bargain Deal. Yes I will have tax to Pay but if the
market pulls back , I will have lost that money anyway.
Billionaire John Templeton once said (and I paraphrase):
\”Help people, when they are desperately wanting to sell,
Help them and Buy; When they are desperately wanting to
buy, Help Them and Sell.\”
4. Get Upskilled and Educated. It’s a Rough place in the Market place.
Get real: just because you make $100,000 in your job, don’t think you can
do the same in the Property Game without training and expertise. Medical Professionals
are notorious for this…with no training and expertise you are simply Gambling!!!
Also Don’t be fooled by the hype and the TV shows, INvest IN yourself, this is a
long Term Game, and when you lose $100k it hurts, I know I’ve done it before ,
more than once!!!
Til next time,
P.S. Have you booked into our Advanced Property Conference coming up?
Click Here To Find Out More >> www.advancedpropertyconference.com.au