APRA bins buffer, let's lending rip

APRA bins buffer, let's lending rip

The Australian Prudential Regulation Authority has removed the serviceability buffer that required banks to assess all borrowers against their capacity to repay the loan at 7 per cent.

Under the new rules, banks will merely add 250 basis points to the rate paid in order to assess whether or not the loan is suitable for the borrower.

As interest rates have moved lower and lower, mainstream lenders have begun to offer fixed loans at rates as low as 2.99 per cent but borrowers were still being assessed against their ability to repay at 7 per cent or more than twice the available interest rate. Banks typically add another 25 basis points on top of the APRA hurdles.

Crack-up: What every apartment owner needs to know about defects

Crack-up: What every apartment owner needs to know about defects

Too few people are accountable for the quality of building work, say the professionals who assess the scale of problems.

 Brace yourself. Defect inspectors say the hundreds of apartment dwellers who were forced to evacuate three buildings in Sydney are just the beginning.

"All buildings across Australia have defects," says building inspector and facilities manager Lynda Kypriadakis.

On Wednesday, The Sydney Morning Herald revealed residents of 30 "loft" units at 19 Gadigal Avenue in Zetland have been unable to live in their homes for months: forced to leave due to water damage and a faulty fire prevention system.

SMSFs face new setback

SMSFs face new setback

Self-managed super fund members will next week face a new setback when NAB announces tough new controls on business property lending, despite offices, factories and surgeries being one of the sector's most popular investments.

The $726 billion SMSF sector is facing several challenges amid proposals to reform use of franking credits, restrict lending and impose minimum amounts for assets under management.

Small business is complaining about a new credit crunch as lenders clamp down following the Hayne banking commission

How to spot a perfectly managed apartment block

How to spot a perfectly managed apartment block

With consumer confidence in brand-new or off-the-plan apartments taking a hit after the Opal Tower crisis in Sydney, many potential purchasers are turning to established apartment blocks as a safer option.

 

Basically, you want a well-managed building: everything else flows from that. But how do you find this unicorn of an apartment block?

The obvious answer is to avoid the bad ones (duh!)

When a Low Doc loan is no longer a Low Doc Loan

When a Low Doc loan is no longer a Low Doc Loan

Low Doc loans have historically been pitched at self- employed borrowers who either hadn’t lodged their tax returns or simply did not wish to supply them. Lenders seeking alternative income verification would rely on an estimate from the borrower of his/her business net profit supported by a letter from their accountant suggesting that estimate was accurate. That form of income reliance is however gradually being replaced due to post Royal Commission “reduced risk appetites” and the need to adhere to more responsible lending guidelines.

Enter the Alt Doc or Near Prime Loans.

The Sydney suburbs where property prices fell most in 2018

The Sydney suburbs where property prices fell most in 2018

The drop out of Chinese buyers from the property market has left a significant hole in one Sydney suburb, causing house prices to plunge by 20 per cent in 2018.

Houses in the suburb of Penshurst, 17 kilometres south of Sydney's CBD, experienced the biggest fall in median price across the city, dropping by 19.7 per cent from $1.32 million to $1.06 million over the 12 months to December – double the 9.9 per cent city-wide fall in prices – according to Domain Group data.

"Penshurst used to benefit from the overflow of Chinese buyers in Hurstville, which is the capital of St George and a major China Town," Ray White selling agent Steve Pentland said.

'Time to pounce': Investors rush to beat negative gearing change

'Time to pounce': Investors rush to beat negative gearing change

Investors are poised and preparing to pounce on established properties to safeguard themselves against changes to negative gearing in the event Labor wins the federal election.

Industry groups have expressed fears that restricting negative gearing tax concessions will cause investors to further recoil in a market already in the midst of a downturn, but in the immediate term there's been an increase in investor inquiries.

"We are definitely seeing astute investors out there who see there's a correction in the market place but know that getting in before a potential grandfathered [negative gearing] clause is sensible investing," said Property Investment Professionals of Australia chairman Ben Kingsley said.

Courtesy - Ingrid Fuary-Wagner AFR

Treasury fears property dumping

Treasury fears property dumping

Federal Treasurer Josh Frydenberg has received a confidential Treasury warning that negatively geared property investors may start dumping properties making the downturn in the housing market worse. Household debt to disposable income has risen by a whopping 200% in the 28 years to 2016 but of equal concern is the threat of rising unemployment.

Tax reform might now be in sight

Tax reform might now be in sight

It is the right time in the economic cycle to abolish stamp duties what with house prices falling, auction clearance rates plunging and state government stamp duty revenue forecast to be $12 billion lower than previously estimated over the next four years, now is the time to abolish this insidious tax and replace it with a broad-based annual tax on the unimproved value of land for the principal place of residence.