| I've lost my job and my biggest immediate problem |
I've lost my job and my biggest immediate problem is the mortgage. What should I do?
The single most important action you need to take is to get in touch with your lender immediately and explain your situation so that they can work with you to determine a course of action.
This makes sense for both parties, particularly if there is a timeframe for recovery.
Some areas in which lenders may be able to offer flexibility are:
* Postponing payments.
* Reverting to paying interest only for a period.
* Refinancing the loan to an alternative product.
Once you have had time to more fully consider the longer-term implications of a job loss on your financial situation and have a realistic view of how long you may be out of work, there are several other alternatives families and individuals may consider, including:
* Restructuring your finances so you can channel more funds towards your mortgage.
* Reducing the size of your mortgage by downsizing or relocating to a more affordable area.
* Encouraging another family member into the workforce.
Don't underestimate the value of restructuring your finances.
This step alone may be enough to take the heat out of the situation by reducing monthly commitments and improving cashflow.
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| Lisa Montgomery, Head of Consumer Advocacy, RESI |
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| Time to buy?? |
As reported by Sanna Trad & Michael Davis, Oct. 27th., 2008—BIS Shrapnel forecasts house prices by Australian capital city and dwelling commencements by state. BIS Shrapnel has extensive expertise in forecasting the housing market for investors and owner-occupiers and a thorough understanding of demographic trends….
BIS Shrapnel managing director Robert Mellor said there was no reason for home buyers to be hesitant. "It's a very good time to upgrade a property - people need to remember that if the value of their house decreases, it will be the same story for other property owners," he said.
"People are worried because of everything they are hearing and there is a lot who are panicking, but if you find the right property then there is no reason why you shouldn't buy as soon as possible.
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| Sanna Trad & Michael Davis |
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| All About Timing |
Property watchers could be forgiven for reeling under the weight of all the bad news swirling around the real estate markets, however it's not all gloom and doom.
On the residential front, investors are looking at improved incomes and strong tenancy demand, while on the commercial property scene it's a mixed bag but there are still highlights.
The economic and financial turmoil, however, has divided the property markets into distinct groups: owner occupiers, investors and tenants. Each group will be affected differently.
Residential A huge slump in people taking out mortgages indicates residential investors and owner occupiers are saying no to buying property. At the same time, however, the lure of record low vacancy rates and high demand for rental housing provide ideal conditions for investors to take the plunge.
The highest interest rates in more than a decade are the main reason for the big drop in mortgages, according to economists.
Borrowing by owner occupiers is now about 25% less than it was a year ago, while investors have pulled back even further with a 32% drop.
Owner Occupiers "Australians are delaying moving into the housing market as significantly higher interest rates bite. This points to a downside for house prices," Westpac economist Andrew Hanlan said.
For people trying to sell their existing houses, however, it doesn't mean taking a loss on the sale. In most cases any price fall will mean sellers will have to accept a lower than expected price - which is a far cry from taking a price cut. For everyone who has owned a property for more than a few years they are still likely to make a capital gain but just not such a big one.
Investors As owners put off their purchasing decisions, it means more people will be staying in the rental market. This comes at a time when there is already low availability and vacancies for rental housing. So while the owner occupier market might suffer from low buyer demand, the investment market has the reverse conditions of high demand and not enough properties to go round. Higher rents will help offset higher interest rates for investors. Another potential bonus in the current cycle is that any price falls for property could mean owner occupiers and investors can buy at a more realistic purchase price.
Commercial The commercial property markets are divided between owner occupiers, investors and tenants too, however, they are further divided into direct property and indirect such as property trusts and funds. The most popular sector is listed property trusts and as investors already know, listed trusts have taken a walloping during the past year with the sector showing one of its biggest slides ever. According to Property Investment Research, the listed trust sector posted negative returns of 35% for the year to date. On the bright side of those falls, there would be few if any trusts that are now overvalued. PIR associate director Dugald Higgins said unit prices were still volatile as investors based their trading decisions on a fear factor and ignore basic property fundamentals. The ongoing global financial uncertainty would continue to take its toll on listed trust prices, Mr. Higgins said. "It's going to be extremely volatile for at least the rest of this year and possibly a large part of next year," Mr. Higgins said. "It's too early to tell how much more fallout and how lasting that fallout will be, investors are trading on fear rather than fundamentals. Once the extraneous issues get cleared up there will be a very good fundamental base but it's a case of there being no reason to rush into it until things clear up." |
| Karina Barrymore, Cairns Post, 18/8/08 |
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| Regional blueprint cause for optimism |
AS residents of “the lucky country”, Australians have one of the highest rates of home ownership in the world.
We almost consider it a birth right, and that great Australian dream of owning your own home is
alive and well here in Cairns.
Property has also moved beyond home ownership, to become the No. 1 choice of investment,
surpassing stocks and other investment options.
With the ripple effect created by the recent mortgage lender meltdown in the US, the Australian property market has experienced some slowing, and Far North Queensland is no exception.
However, this does not mean we need to start signalling alarm bells.
Since the new millennium we have been riding high on the tide of residential sales and a dip in activity was inevitable as the naturally cyclical property market goes through its paces.
While there is some disagreement over the length of typical market cycles, experts are
unanimous in their agreement that
Half-year period Chance: There has been a slowdown, but it is not all doom and gloom. these
patterns persist. From an industry point of view, the current period represents an opportunity to consolidate and prepare for the next upward turn in a region that has been earmarked as a major growth hub.
Certainly, the State Government moved to accommodate the future growth needs of Cairns and
the UDIA has been pleased by the release of the draft Far North Queensland Regional Plan 2025.
The plan was initiated in response to projected population growth of about 100,000 in the next
20 years. The Government has, thereby, committed to focus on managing the coming growth and
development so as to not compromise the balance of social, economic and environmental structures
which we hold dear.
As such, Far North Queensland is the first region outside southeast Queensland to have received this level of formal growth planning.
The UDIA is optimistic the region is under the spotlight and looks forward to working closely
with local and State governments to provide industry input into the planning process and ensure the proposed benefits of increased quality of life, housing accessibility and affordability carry through to the community.
Matt Byrne is president of the Urban Development Industry Association, Cairns. |
| Matt Byrne, Cairns Post, 30/7/2008 |
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| Market Ready To Rebound |
QUEENSLAND'S property market has "bottomed out'' and is ready to rebound, Real Estate Institute of Queensland chairman Peter McGrath says.
Mr McGrath was speaking after the REIQ's board meeting at Cairns International Hotel recently.
While acknowledging there had been difficult times, Mr McGrath said there was cause for optimism.
"In terms of sales volumes, there has been a turning in the market and for the negative'' Mr McGrath said.
"That has been caused by uncertainties in the market and concerns about how far it is going to go.
"That was exaggerated by the heavy rains in North Queensland.
"But it appears that the banks have done the Reserve Bank's job for them in curbing inflation.
"It appears that we've gone back to stable interest rates from the Reserve Bank.''
Mr McGrath said Queensland was in the fortunate position of having a healthy economy driven by the mining sector.
There was also a "critical under-supply of new properties".
Also driving the economy was strong overseas immigration, he said.
During the meeting, board members discussed changes in both state and federal laws, including residential tenancy laws and the Property Agents and Motor Dealers' Act.
In the federal sphere, members discussed plans for uniform real estate licensing across Australia.
While the REIQ supported this in principal, Mr McGrath said it remained to be seen how it could work given the many different laws and jurisdictions.
The meeting also heard about a business degree program at Griffith University on the Gold Coast where students gained on-the-job experience and graduated as qualified real estate agents.
The REIQ is discussing a similar course with James Cook University.
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| David Sexton, Cairns Post, 26 July 2008 |
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| Renovations, Or Home Detention |
| You might think your home is your castle, but it's not always worth a king's ransom. Shoddy repairs and structural faults wipe thousands of dollars off the value of your home. An overgrown garden, poor fencing, or the dilapidated house next door can reduce the price too. But the biggest killers are termites, illegal building work and tacky renovations. Buyers often walk away rather than risk buying a property with illegal building work, says David Hallett, managing director of Archicentre, the building advisory service of the Royal Australian Institute of Architects. Once it was easy to alter a home without a permit but with the advent of the Section 32 vendors statement, illegal work is more likely to be discovered. If you have undertaken building work without a permit and potential buyers suspect, or even know it (and they realise they will end up taking responsibility for it once they own the property) they might lose interest pretty quickly. A leaky roof, poor drainage, faulty wiring or rising damp also put buyers on guard, Mr Hallett says. But it all comes down to money. If you want to sell a house riddled with faults then most buyers will mentally deduct $10,000 or $20,000 to fix them. Spending the money in advance and fixing the problems yourself might not get you any more money but it could ensure you at least get a buyer. In extreme cases of neglect homes can actually become worthless and the land is the only asset. In even more extreme cases, the home actually reduces the land value because the buyer will have to pay money to have it removed. This situation can happen where elderly owners don't have the money or help to do repairs, and sometimes the homes are left to deteriorate for decades, Woodards Carnegie director Ruth Roberts says. "I had a property recently and instead of rising damp it had rising walls," Ms. Roberts says. "There were two-inch gaps under the walls. It was too dangerous to have open for inspection in case someone fell through the floorboards. At another property a lady had a 3m bird aviary inside the house. If the council had gone to see it, it would have been condemned. A renovator bought the property after a three-minute inspection and holding his breath. He paid land value and a bit more for the facade." A bad renovation is something that really counts against a home. "Some of the renovations done more recently in the 70's and 80's aren't at all what people want in a house these days," Mr. Hallett says. "A flat-roofed cement sheet box on the back of a period home isn't going to appeal to many people." Noise from factories, offices, nearby power lines, a school or busy road are things people object to, according to Cayzer Real Estate director Geoff Cayzer. "Where you have a run of period houses and then a block of 1960 cream villas, that has an effect on price," Mr. Cayzer says. Flats or apartments next to a home reduce its value about 20%, he says. "The value is assessed by the number of people interested. If you have a property next to a block of flats you have two people interested. If you have one in the middle (of a street), you have seven people interested. That's the difference between getting $800,000 and $1 million," Mr. Cayzer says. On the flip side, cleaning and de-cluttering can add up to $40,000 to a property in good order. When dishes and laundry are put away, the lounge is tidy and kids' toys disappear, it's amazing how different a home looks. Cosmetic presentation has a big impact on value, agrees real estate agent and director of Woodards, Jeremy Desmier. "If a place is over furnished, heavily cluttered, if there are signs of superficial cracks, it can disguise the true potential of a place," Mr. Desmier says. "A messy and dirty property is a big turn-off. We see it more in rented properties than owner-occupied properties." Using the wrong furniture can drag the price down on an otherwise sought-after property. Hiring furniture where the quality of the home is significantly better than its contents, or where the styles don't match, can also alter the sale price. Painting is the cheapest way to make a big visual difference. "I have seen cases where spending $5,000 to $10,000 on painting and cosmetics has added $50,000 or $100,000 to a sale price," Mr. Desmier says. Buyers don't like dull, stuffy or dark interiors, which can easily be fixed by replacing or updating light fittings and ensuring the window coverings are pulled back. New carpet or polishing floorboards can add value, but don't rush into a major makeover. If you plan to renovate before selling, look at the floor plan, the property's location and potential and work out if a new $30,000 bathroom is going to add the same amount to the value of the property when you sell it, Mr. Desmier says. |
| Wendy Mason, Cairns Post, 7/7/08 |
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| Hunt on for first home |
BABINDA, Gordonvale and White Rock are the best places to look for a house if you are on budget and looking for growth, a property report says.
Babinda, at a median price of just under $200,000 comes in as the fourth cheapest place to snap up a bargain in the coastal regions of Queensland, while Gordonvale and White Rock on about $300,000 are also listed in the three most affordable communities within Cairns Regional Council boundaries.
And with capital gains of between 9 and 17 per cent in the last year they are also a good investment, the Real Estate Institute of Queensland report says.
Herron Todd White research director Rick Carr said prices on the south side of Cairns had fallen by 5-10 per cent in the past six months making the area even more attractive.
He said while the more expensive suburbs were holding steady, houses that would have sold in just days back in November were now taking two to three months to sell.
"The market has swung from a seller's to a buyer's market," he said.
The REIQ and Mr Carr may well be on the money if 30-something couple Melanie Schramm and Chris Hill are any guide.
On Saturday, the first-homebuyers looked at a house White Rock, while yesterday they toured one in Gordonvale.
"We have a budget to stick to and prefer to live on the southside," Mr Hill said.
"We have looked at quite a few houses."
While there were parts of White Rock they would not buy in, a house on Progress Rd had caught their attention.
Ms Schramm said it had potential and they were considering it to be their future first home.
REIQ Far North zone chairman Rick Szelpuk said other southside suburbs also had affordable homes for those making their first property plunge.
"There certainly is in lower Bayview Heights and Earlville if you look hard enough," he said. "But in the more upmarket suburbs houses at that price would need some TLC."
Mr Szelpuk said while the market had slowed he was not seeing any major price changes.
However, Jill Croft of Croft Realty said the current economic climate as well as relatively cheap new homes were certainly having an effect on the market, particularly on the sale price of older southside homes.
"With CEC selling house and land packages as low as $299,000 it has affected the established market," she said.
Ms Croft said as result there had been 15-20 per cent drop in many established houses that were selling for over $400,000 only six to eight months ago.
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| Roger Dickson, Cairns Post, 24/6/08 |
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| Mortgage Advice For Home Owners |
The Australian Competition and Consumer Commission (ACCC) has published advice on its website to assist home owners experiencing difficulty meeting mortgage repayments.
"The ACCC is aware of the increased pressure on families resulting from higher mortgage commitments and is concerned about reports that some businesses may be employing unscrupulous practices to take advantage of vulnerable home owners," ACCC Chairman, Mr Graeme Samuel, said.
"The ACCC has received reports that some businesses are targeting home owners struggling to meet mortgage repayments with the promise of a quick sale at prices below market value."
Mr Samuel said the purpose of the new Managing your mortgage web page is to provide some practical steps for home owners to take if they are experiencing financial difficulties before they consider selling their home. Key tips include:
seeking independent advice from a financial counsellor, community legal centre or legal aid office to identify possible courses of action
talking to the lender as soon as a problem is identified to discuss options
checking all the terms and conditions of new loans before deciding to refinance, and
if a sale is necessary, arrange a number of valuations to get the best deal.
The new page is located on the For Consumers pages of the ACCC website, www.accc.gov.au. The page also provides links to relevant pages on the Australian Securities and Investments Commission consumer website FIDO where home owners can find in-depth guidance on managing loans and mortgages and protecting wealth in the family home.
"The information contained on the Managing your mortgage page is general guidance only and recommends that home owners seek independent advice as soon as possible if they are experiencing financial difficulties," Mr Samuel said.
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