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 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.
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
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.
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.
Hindsight is a marvelous thing and excluding guessing where AfterPay’s share price might sit today (545% above issue price), getting interest rates right would arguably have made us all the richer. 2019 threatens to hold all the omens of 2018 plus a few we would not have otherwise imagined. In the last several weeks we saw 3 home lenders raise their variable and fixed home loan rates, one by as much as 27 basis points, blaming increased cost of non-deposit funding (savings rates have dropped from 7.3% in 2008 to just 1.35%; below the rate of inflation) and regulation to increase capital reserves.
Whether we are trying to convince the kids it’s bedtime or we’re selling a widget or simply want a favour from a total stranger PRE – SUASION “A Revolutionary way to Influence and Persuade” by New York Times bestselling author Robert Cialdin is an utterly fascinating insight into the tactics that all marketeers, professionals, consumers or parents need to be aware of to be their effective best.
Home renovations in Australia hit a 14–year high over the September quarter, with the volume of projects growing 11 per cent year–on – year to $9.35 billion in chain volume terms. Buyers in the business of flipping houses are starting to come unstruck with many finding they have mistimed the market and now face substantial losses.
It comes as no surprise to anyone who has been following the banking Royal Commission or watching the nightly news; our banks have tightened the screws on every aspect of loan qualification. Following is a List of the seven things most likely to influence a loan approval or more often a decline.
If you think the housing market just operates on a seven-year cycle, I have news for you.
I have found that it has been the decisions of key people that have materially influenced the cycles and altered the direction of the market at various points in time.
So who are these people? What power do they have? What will they decide to do in 2019?