Proposed New Budget Plans will be a Disaster

Source:REIV

Melbourne Market Wrap March 1st May, 2017

A clearance rate of 82 per cent was recorded this week compared to 76 per cent last week and 76 per cent this week last year. There were 901 auctions reported to the REIV, with 743 selling and 158 being passed in, 56 of those on a vendor bid. Another auction record is set to fall this year with the highest number of auction sales ever for the month of April.  (REIV)

Maybe There Won’t be a Collapse in Melbourne’s Apartment Market

In what’s been a very frantic Melbourne property market over the past 6 months stock levels appear to be tightening as we head into winter. This can only mean one thing, clearance rates and therefore prices will continue to hold and I believe may even rise,  at least in the short term or should I say at least until stock levels start increasing significantly again, in Spring.

As far as the apartment market in Melbourne goes there appears to be a shift happening. Despite an increasing supply of stock my feeling is that there won’t be a collapse in this sector as first expected, however it will continue to be sluggish.

Yes I have changed my tune because I see a change in the market, especially in Melbourne. Treasurer Scott Morrison Scomo to his mates, is encouraging foreigners to buy new apartments and as of July 1^st stamp duty for first home buyers will be removed for property purchases up to $600k and halved up to $750k purchases, you bewdy!!

No not everyone wants to live 30 plus km’s out of the CBD in a brand new house so my belief is that apartments will become a real alternative as other property options like town houses in this price bracket diminish. If you don’t believe me just look at what’s happening in Sydney.

The other point to note is that those investors who have bought these off the plan apartments although may not be able to realise the price they paid, will have a tenant. Low vacancy rates and strong tenant demand in areas like Richmond mean mortgage commitments will be met and forced sales limited.

Source: PIXABAY

Proposed new Budget Plans will be a Disaster

Housing affordability has become the number one political issue. Most believe in the media seem to believe the easiest way to solve the problem is to take from the perceived ‘rich’ and give to the ‘poor’. Punishing property investors by changing negative gearing rules, removing or lowering capital gains tax or introducing the radical land tax to all property will have devastating effects on the property market, economy and tenants. Sorry but it’s not that simple! One way to significantly reduce the investor market is to stop all interest only loans.

The reason why property prices have risen so much so fast is because assets rise when interest rates are low, this includes stock markets. You only have to take a glance at the ASX to see we are nearing record levels on the share market, close to the 6000 points while in the US the Dow Jones is in new territory having surpassed the critical 20,000 point mark and closing in on 21,000 points. What this means is that low interest rates encourage greater risk. Until the US Federal Reserve and the rest of the world starts substantially increasing current low rates, ‘cheap money’ will continue to inflate asset prices. Those with assets will continue to invest and become wealthier through debt.

In the latest attempt to win votes Mr Scomo has hatched a new idea to help the besieged first time buyer market. Eight days out from the Federal Budget, the Government’s plan is to allow buyers who want to enter the housing market to direct pre-tax income into a savings account for a deposit. Wow!

This all sounds good in theory but smells a bit like the same Kevin07 idea. Although last time this flash of brilliance managed to get shot down by the Liberals, this time it’s the Libs who have come to save the day. All jokes aside, should the Federal Government see this as their new centrepiece in May’s Budget, affordability in my mind will worsen to the point where no first time buyer will eventually be able to afford to buy a property remotely close to the CBD, much like what has happened in Sydney. Expect rents to skyrocket!

Street Advocate

Congratulations to our latest vendors Rayna and Karl who succesfully sold their home in Braybrook for $730,000 bought in 2007 for $230,000. No work was done to improve the property during that period of time.

Feel free to call me if you have a property question on 0418 740 606 or 9863 7514

Street Advocate Client Reviews

Hi Peter,

Just would like to express my sincere gratitude towards your service again.

I have sold two properties both through the help of Peter. He has been very professional and a wonderful person to work with, and he would provide me with recommendations and improvement tips to maximise my sales return throughout the campaigns. Every property sale has its own difficulties, and on both occasions of my property sales, we had to overcome their unique obstacles, but Peter was superb at managing difficult situations and would come out winning  for his client. In all honesty, there might be a difference of opinion at times, but Peter is always willing to work hard and stick it out for his client to achieve the best possible result. I wouldn’t hesitate to recommend Peter to other vendors!

Thank you again!

Derek

8 Birchgrove Cres, Templestowe

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