The number of home loan applicants obtaining a mortgage after inflating their income and downplaying their living costs has jumped to record levels, according to research by global investment bank UBS. Thirty seven per cent of borrowers were not entirely honest in their mortgage applications, the bank’s anonymous survey of 903 Australians revealed – despite tougher lending standards imposed since the banking royal commission. The surge in so-called “liar loans” comes amid a rise in...
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Are you thinking about buying an investment property? If the answer’s yes, listen up. While buying an investment property is a great first step to take in future-proofing your wealth, it’s important to know exactly how much the endeavour will set you back before you get too carried away. As with any property purchase, you’ll have to spend more than just the cost of the dwelling in order to secure the premises. Some of the...
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One definition of the term “structure” is “something built or constructed, as a building, bridge or dam”. Ironic, then, that as property investors we use the term “structure” to define how we arrange our property investment portfolios. Like a building, our investment portfolios need to have a good structure… otherwise they’ll topple down on our heads! The structure we establish will depend upon a variety of things: our personal situations; our goals; our financial and...
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Subdividing your PPOR (principal place of residence) is a strategy we often get asked about. If you’re thinking about going down this path, there’s a lot to consider before making your decision. By Pat Mannix and Rebecca Mackie There are many different strategies with different outcomes, depending on whether you’re planning to sell the part with the house, or the vacant land, or build and move in, build and rent out or build and sell...
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If the past 10-15 years in real estate has taught us anything, it’s that no amount of regulation and legislation can protect consumers from bad advice or crooks hell-bent on ripping them off. The 1990s was the era of the get-rich-quick seminar, when tens of thousands of Australians were duped by two-tier marketeers, seminar gurus and others into paying inflated prices for badly-located real estate or grossly over-priced “mentoring” services. Eventually, the level of consumer...
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While the Reserve Bank (RBA) has left the official cash rate at a historic low, some economists believe interest rates must fall in the months ahead to restrain the value of the dollar and encourage recovery in non-mining sectors of the economy. The growing headache for the RBA is the lower the rates, the greater the boom in the housing market – and bigger the pressure for regulators to intervene and ensure house price inflation...
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THE problem with self-managed super funds is not that they’re buying residential property, it’s that they’re surrounded by sharks as they do it. Tax breaks tend to reduce one’s critical faculties. We saw that with agricultural investment schemes, which paid commissions of 10 per cent to financial planners and mostly collapsed, and now property developers are paying similar commissions to get SMSF cash. Noel Whittaker, the author and financial adviser, has been campaigning against property...
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Many people would assume that a gain made on the sale of a rental property held for nearly 10 years would be a capital gain eligible for the 50% general discount. However, in a recent decision by the Full Federal Court, the length of time a rental property had been owned was deemed less significant than other factors in deciding the tax outcomes. Rather, the court looked at the original intent of the taxpayer and...
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It has to be one for the books when a real estate agent is saying property prices are becoming unsustainable and a Reserve Bank heavy says they’re not. Yet I heard both the same day. And no, I didn’t mix the quotes up, though context can be an elusive thing. The agent was commenting on research suggesting Sydney values could jump by up to 20 per cent next year, while the Reserve’s assistant governor was...
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QUEENSLANDERS are more positive about housing affordability than anywhere else in Australia, with Generation Y the most upbeat of all when it comes to property prices, according to new research. The annual realestate.com.au Housing Affordability Sentiment Index (HASI), which tracks the sentiments of Australians towards the cost of housing, reveals that all states and generations have a brighter outlook on property prices in general than 12 months ago. This is despite statistics based on the...
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