Ralph’s Property Investing Newsleter – November

In this edition of my newsletter:

Sutherland meeting reminder

Tracker Mortgages

Insurance rip-off – It pays to complain

Bank footprints shrinking

Failed Off-Plan apartments

NAB succumbs to APRA pressure

AFM re-invents the wheel

Sneaky banks cut rates – for savers

Property suggestions

Daily Property Alerts

Sutherland Meeting

Our last Sutherland meeting for the year will be in a few weeks time on Wednesday evening, November 23rd, 2016 from 7:30 PM.

Our Sutherland meetings are free and this meeting will help you to understand how investing in property can help you become financially independent.

You will learn how the many free services the club offers make it easy and stress-free.
You will also see how the numbers work and how you might be able to easily afford something.

Special guest Laurayne Walkenden will be on hand to talk to you about finance and answer any questions.

The meeting will be held at our usual location being the Stapleton Avenue Community Centre, Sutherland, just around the corner from the library.

I hope to see you there and please feel free to bring along any family or friends that might be interested.

Tracker Mortgages

In follow-up news to my previous newsletter and this subject, I read an interesting article in the SMH (Click here to read), quoting the ASIC Chairman, Greg Medcraft who says the argument by the big 4 banks as to why they can’t offer tracker mortgages is ‘self-serving’.

The headline reads “The banks are having us on over tracker mortgages”.

As I said in a previous post, they will have to offer them in time due to competition although having to be dragged kicking and screaming to the table.

Roll-on a Royal Commission, I say, even if it does take 2 years to complete. Would bring this sort of behaviour out into the light.

Insurance Rip-Off – Why it pays to complain

I came across this article the other day talking about a sales group partnering with QBE Insurance to offer home and content Insurance as part of the loan/finance/sale process.

Makes sense I suppose, but I was surprised to see that the group gets a one-off up-front commission of 18% and then an extra 10% each year it is renewed !

No wonder Insurance is so expensive if that is the level of commission that they pay out.

It also explains why they are so quick to offer further discounts to people like me who whinge about increased premiums.

My recent GIO renewal notice on my own home and contents went up by 10% this year and when I rang to ask why, they reduced it to just a 5% increase. I didn’t even have to argue too much.

Bank footprints shrinking

It seems that the big banks are keeping this pretty quiet, as I hadn’t heard anything about it prior to reading this story. Click here to read.

It says that Westpac has closed 173 branches over the last 12 months as it attempts to drive more business through the third-party channel, being mortgage brokers.

I have certainly noticed my local Westpac branch losing staff and getting physically smaller and have wondered why the local St George branch (Owned by Westpac), is just a few doors away and actually looking busier.

I was also encouraged to use their new smart ATM’s the other day when I attempted to do a transaction over the counter.

Way of the future, obviously.

Failed Off-Plan apartments

A recent article on News.com (Click here to read), says that ‘failed’ off-plan apartments are good news for first home buyers.

Well, I’m not sure that is true.

A large percentage of overseas buyers buying off-plan apartments are looking at expensive, small, city-centre, high-rise.

If they get caught-out by the banks here having changed the rules and are unable to proceed, then yes, these would indeed be classed as second-hand and therefore ineligible for other overseas buyers to take-up.

However, not all FHB want to live in a city centre high-rise and with the typically smaller floor-plans of many of these blocks, will be unsuitable for most.

Developers will still be forced to discount the pricing to entice locals to take these up and I’d hope that most informed local investors would steer well clear of these offerings.

Contact me if you’d like to hear about more suitable investments and see a couple of suggestions below.

NAB succumbs to ASPRA pressure

Two related stories :

Firstly APRA looking to lock-in the current restrictions on the banks and how they assess borrowers.

This includes assuming interest rates at 7%, only taking into account 80% of any rental income, overtime and bonuses. (read more here)
We have seen already how these policies have made it much harder for many prospective investors and has allowed the banks to be much more picky about whom they lend to.

The second news is a leaked list from the NAB of 600 suburbs and post codes where they will restrict the max LVR applicable.

That list includes most capital cities CBD areas as well as other well-known suburbs such as Docklands in Melbourne and Waterloo, Chatswood and Hurstville in Sydney which now have a max of 80% LVR, or requiring a minimum 20% deposit for borrowers wanting to get a loan from the NAB.

They will need a minimum 30% deposit for many country areas and mining towns, mainly in QLD and WA including Gladstone and Mooranbah.
Read the full list via this link.

AFM re-invents the wheel

I read an article recently about a non-bank lender, AFM, who has breathlessly announced a new web-site linked to their in-house database.

It allows all parties involved in a sale through them to track the progress of the build and the mortgage.

Exactly as the Property Club has been doing for our members for years.

As the article says:
Users are also able to see when the loan was settled, who the builder or developer is, funder payment policies, where the site is located, and the status of the project(s).

All users will also be able to access live updates of the construction process, and view photographs of the property at each stage of construction.

AFM has said that the site also keeps track of historical notes, so “no one is in the dark as to where the signed invoice is, or when payments has been made to the builder”.

“The transparency with live tracking, history notes and status updates keeps all parties involved on the same page in real time”

You can read more here.

Sneaky banks cut rates – for savers

Do you remember the big fuss the banks made a couple of months ago when they refused to pass on the full RBA cut, but then made up for it by raising term deposit rates ?

Turns out is was typical sneaky bank behaviour and those rates are now almost all gone and back to near original levels.

No, we don’t need a Royal commission …….

You can read more here.

Daily Property Alerts

You will be pleased to know that our new web-site is now approaching usability !

The latest news is that the daily property alerts is now up and running again. If you used to get these and you no longer do, drop me a line and I’ll re-set them. If you get them and no longer want them, again, let me know and I’ll switch them off for you.

If you have no idea what I am talking about, let me know and I’ll give you a call to explain.

Property suggestions

I’m going to be away for a couple of weeks as I’ve another overseas trip planned, this one to New Zealand South Island with a group of friends, but in the meantime, why not check-out these couple of suggestions ?

One is some units in Fannie Bay in Darwin, which look pretty good to me in a very popular upmarket coastal suburb. These units boast a 6% x 6 year Rental Guarantee, PLUS a full Stamp Duty Rebate paid by Developer! Properties are priced at HTW Valuation and due for completion before Xmas. These incentives are only availble to club members. With that rental guarantee in place, these would be cash-flow positive for most members.

Let me know if interested and I can do you a complimentary cash-flow report so you can see how the numbers would work.

The second suggestion would be some 3 bed townhouses priced from just $351,900 at Kallangur, in the Northen suburbs of Brisbane. These are expected to have a 5%+ rent return.

I can’t attached the profiles for these properties to this email as the files are too big, but email me and I can send them to you separately.

More News Sources

Please use the link below to visit our media centre. Here you will not only find the latest editions of our magazine, but also back copies, always with some interesting articles.

Click here to read on-line or even download a .pdf copy of the latest issue for later reading.

You should all have recieved either your posted copy, or a direct email from Head Office with your email version. Let me know if you did not get this latest edition yet.

As usual, if you’d like a hard-copy posted out to you, please let me know.

Kevin Young has now produced close to 100 video episodes of him answering questions from club members. You can go here to check them out.

Ralph Cartwright
Property Mentor of the year 2015 – Runner-up
Your personal Property Mentor & Team Leader

0416 030 872
02 9548 1074
ralph.cartwright@propertyclub.com.au

Are you interested in more information about me and my investment journey ? You can download my story from a file on my Facebook Page via this link:Facebook Page – Go to Files