realestate.co.nz’s Post

Here is an objective article by Ian Verrender of ABC Australia about the House Value (sic) aka Price Ponzi underpinned by DEBT. Pilloried up by Australian Governments; subsidized by our Tax Payers; allowing the Washing of Monies into the country by foreigners and their ill-gotten gains; pushing people into smaller properties; badly set Monetary Policy low interest rates aka NOT managing Money Supply and mispricing of other asset classes with interest rates set far far too low and so on and so on and so on. And bad bad lending practices by our BIG FOUR BANKS and neigh next to nothing Regulation; why? The House Price PONZI looked too good for those already in the market; people pilloried into the market are saddled with debt; they can't get out; can't get divorced; social issues become a problem; and to buy into the market! You NEED TOO MUCH DEBT! It is akin to a multi-level Marketing Ponzi. In Australia it is so bad even builders go broke; because the price of the underlying Land Price Ponzi does not allow one a builder to make reasonable profit along the way. Hence my article sitting in the wings: 'No land, or property, or rent is too expensive, or too high, or out of reach for an “average” buyer or renter or builder, unless it is a contrived market' aka does not / do not satisfy IVSC definitions of #marketvalue and or #marketrent (Gilbert, D. 1995). https://lnkd.in/gJiUh6Bj

“I can afford a better property when my borrowing capacity increases when interest rates are down.” – Truth or Myth? Since the cash rate started rising, Australians’ borrowing capacity has dropped by more than 25%. This dramatic drop makes some investors believe it’s not a good time to buy when their borrowing capacity is discounted.   Well, it depends. Investing more isn’t a good idea if your personal or business finances have been affected by the interest rate hikes. However, if you are in a healthy financial position but pausing just to wait for “a better time”, the wait is unnecessary.   Can’t afford to buy in that expensive area anymore?   Go for a cheaper one. A lower-priced market doesn’t necessarily perform poorer than a pricier one. There are plenty of great options on the affordable end of the price spectrum.   $500k is commonly considered the affordable house price threshold, with which the home loan repayment amount would not exceed 30% of a household’s income in most regions, even with a high interest rate of 6.5%.   As of Sep 2023, 80 SA3 regions across Australia enjoy a median price no higher than $500k, representing 23% of all SA3 regions   Among the 80 affordable SA3s, 36 have achieved >10% house price growth from May 2022 to Sep 2023 and are currently enjoying a healthy rental yield of >4.5%.   Their low rental vacancy rates suggest strong housing demand within these regions, which would fuel further growth in both rental prices and sales prices.

Aspiring homeowners could face another setback if a forecast 0.25% rate rise is passed on, with borrowing power estimated to shrink by up to $25,000 for couples on average salaries.  Compare the Market analysis shows that for a Western Australia couple, both on the average annual income of $109,600, a 0.25% rate rise could reduce their borrowing capacity from $1,164,000 to $1,139,000 – that’s a $25,000 difference. https://lnkd.in/gFT7Bsfu David Koch #RateHike #HomeLoans #RealEstate #HousingMarket #Property 

Is Australia’s Borrowing Boom Losing Steam? 📉 After seven months of steady growth, Australia’s home loan borrowing has just taken a dip. According to the Australian Bureau of Statistics, borrowing fell by 0.3% in September – dropping from $30.308 billion in August to $30.210 billion. Between January and August, we saw borrowing consistently rise, climbing from $26.208 billion to over $30 billion. So, is this slight decline just a blip, or are we looking at the beginning of a larger shift? 📊 Here’s a look at where borrowing stands compared to last year: 👉 Total borrowing is up 18.9% compared to September 2023 👉 Owner-occupier borrowing has risen 13.1% 👉 Investor borrowing has surged by a massive 29.5% Key Takeaways: - September’s 0.3% dip might signal a shift, but it’s too early to call it a trend - The long-term picture still shows significant growth, especially for investors With a potential cooling off, what do you think this means for the property market and home buyers? #MortgageBroker #AustralianProperty #HomeLoans #InvestorTrends #PropertyMarket

In 2024 a home cost 8.3 times the average income. 30 years ago in 1994, it was just 3.5x. According to CoreLogic Australia, Melbourne and Brisbane almost tripled and Sydney has increased from 5.1 to 14.2! The majority of lenders will not accept a debt to income (DTI) of over 8. Latest data from Australian Bureau of Statistics shows that household debt is sitting at over $32b. With rates set to stay higher for longer, how will this continue to affect households and will we see the housing market continue to set new records?

Homeownership mortgage free in the US is 3rd to the lowest in 28 countries. Why is that when real estate is one of the 3 top investment paths to wealth retention? The U.S. is more of a mortgage-ownership society than a home-ownership society. A 2022 OECD (Organisation for Economic Co-operation and Development) study of 28 countries found the U.S. had the third lowest percentage of households that owned their homes “free and clear” with no mortgages, as “outright owners.” Free-and-Clear Homeownership Rate of Households Lithuania = 83% Slovak Republic = 69% Hungary = 68% Slovenia = 68% Poland = 66% Greece = 63% Latvia = 61% Italy = 60% Estonia = 57% Japan = 48% Spain = 48% Chile = 45% Ireland = 43% Portugal = 43% Luxembourg = 42% Korea = 41% France = 37% Belgium = 35% Finland = 34% United Kingdom = 33% New Zealand = 32% Austria = 30% Australia = 29% Canada = 28% Germany = 27% United States = 23% Denmark = 11% Netherlands = 9% Source: OECD (2022), Housing Taxation in OECD Countries, OECD Tax Policy Studies, No. 29, OECD Publishing, Paris. #mortgagedebtinamerica #homeownership #realestateinvestment #ushomeownership

The Australian Financial Review shared intriguing insights from the IMF's findings regarding Australia's housing market. It emphasized the market's sensitivity to interest rate changes, driven by factors such as variable-rate mortgages and high household debt. Despite this susceptibility, Australia's housing prices have stayed strong, attributed in part to robust immigration and housing supply shortages. The IMF's research underscores the value of fixed-rate mortgages, offering stability and predictability in monthly payments. This shields borrowers from interest rate fluctuations, making long-term financial planning more manageable. In an environment of uncertainty, fixed interest rates empower borrowers by providing control over their loan payments. #fixedinterest #financialindependence #responsiblelending #interestrates

🏡 UK House Prices See Highest Annual Growth Since 2022! 📈 House prices rose by 3.2% in September, bringing the average home value to £266,094, according to Nationwide. Falling borrowing costs and expectations of more Bank of England rate cuts are driving the growth. 📉 🔹 Fastest Growth Areas: Northern Ireland (+8.6%), Scotland (+4.3%), and the North of England (+3.1%). 🔹 Lenders are responding with five-year fixed rates below 4% for the first time this year. Are we on the verge of a housing market revival? #RJJDevelopments #PropertyInvesting #PropertyInvestingSpecialist #PropertyDevelopmentInsights #PropertyDevelopment https://lnkd.in/eJ9tcFgD

 According to a Fraser Institute study, in 2023 the average Canadian family (with a household income of $109,235) paid $46,988 in total taxes, which represents 43.0% of their household income. Consider also that the total interest costs of all debt (government, consumer and mortgage) as % of household spending in 2023 was roughly $216 billion or roughly 18.3% of total Canadian household spending of $1,181.9 billion in 2023.

Why should you consider buying a piece of real estate, even with a rising rate and a downturning market? . There was a media flurry of scare stories about property prices dropping and the average interest rate on mortgages increasing. . With this news, when do you think is the right time to buy a property? Should you wait until prices are even lower and for the interest rate to peak? . 𝐈'𝐥𝐥 𝐬𝐡𝐚𝐫𝐞 𝐚 𝐟𝐞𝐰 𝐫𝐞𝐚𝐬𝐨𝐧𝐬 𝐰𝐡𝐲 𝐲𝐨𝐮 𝐬𝐡𝐨𝐮𝐥𝐝 𝐬𝐭𝐢𝐥𝐥 𝐭𝐡𝐢𝐧𝐤 𝐚𝐛𝐨𝐮𝐭 𝐩𝐮𝐫𝐜𝐡𝐚𝐬𝐢𝐧𝐠 𝐚 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲.👇🏼 . ➡𝐓𝐡𝐞 𝐯𝐚𝐥𝐮𝐞 𝐨𝐟 𝐲𝐨𝐮𝐫 𝐦𝐨𝐧𝐞𝐲 𝐝𝐞𝐜𝐫𝐞𝐚𝐬𝐞𝐬 𝐝𝐮𝐞 𝐭𝐨 𝐢𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧. Inflation reduces your money’s power and value. Therefore, you must invest your money somewhere, and real estate may be the best option. ➡𝐑𝐞𝐚𝐥 𝐞𝐬𝐭𝐚𝐭𝐞 𝐢𝐬 𝐚 𝐠𝐨𝐨𝐝 𝐢𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 𝐩𝐫𝐨𝐭𝐞𝐜𝐭𝐢𝐨𝐧 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲. Immigrants continue to be drawn to Australia as a place to live. With the shortage of houses, people compete for existing houses, driving up their prices. Real estate is a wise investment because demand appears to continue to grow in the future. ➡𝐄𝐯𝐞𝐫𝐲 𝐝𝐚𝐲, 𝐲𝐨𝐮𝐫 𝐛𝐨𝐫𝐫𝐨𝐰𝐢𝐧𝐠 𝐜𝐚𝐩𝐚𝐜𝐢𝐭𝐲 𝐝𝐞𝐜𝐫𝐞𝐚𝐬𝐞𝐬. In the midst of rising interest rates, people are less able to borrow money because lenders will find they can't repay as much debt. This could affect your ability to purchase a property. . Is the fear of the market driving your decision not to invest during these times? 🤔 . Take a jump into the market only if you have planned out the right strategy. 𝐓𝐡𝐞 𝐛𝐞𝐬𝐭 𝐜𝐨𝐮𝐫𝐬𝐞 𝐨𝐟 𝐚𝐜𝐭𝐢𝐨𝐧 𝐰𝐨𝐮𝐥𝐝 𝐛𝐞 𝐭𝐨 𝐜𝐨𝐧𝐬𝐮𝐥𝐭 𝐚𝐧 𝐞𝐱𝐩𝐞𝐫𝐭 𝐚𝐧𝐝 𝐜𝐨𝐧𝐬𝐢𝐝𝐞𝐫 𝐰𝐡𝐞𝐭𝐡𝐞𝐫 𝐭𝐡𝐞 𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐬𝐭𝐚𝐭𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐞𝐜𝐨𝐧𝐨𝐦𝐲 𝐦𝐚𝐤𝐞𝐬 𝐭𝐡𝐢𝐬 𝐭𝐡𝐞 𝐫𝐢𝐠𝐡𝐭 𝐭𝐢𝐦𝐞 𝐟𝐨𝐫 𝐲𝐨𝐮. 🤝 . We can help you. 𝐁𝐨𝐨𝐤 𝐮𝐬 𝐟𝐨𝐫 𝐅𝐑𝐄𝐄 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐑𝐞𝐚𝐝𝐢𝐧𝐞𝐬𝐬 𝐂𝐚𝐥𝐥 👉 https://bit.ly/3CNZAER . #financialfreedom #realestateinvestor #realestateinvesting #passiveincome #propertyinvestment