Stuck in Auckland

Heard from a friend of a change in bank lending criteria in assessment of income.

He has five properties and a decent 6 figure salary but the bank are now only taking 40 weeks of the rent into account? And his income is now being capped at 4.5 times

He is now slightly panicking as it appears the numbers don't stack up and he will need to sell to bring his liquidity in line

He is coming off a fixed rate and is looking to lock in another 5 year rate

xizzles

OK.

Amazulu

Some banks have been moving against investment purchasers

Whether this is a good or bad thing is dependant on opinion

GarryP

My understanding was that banks were pricing in a 20+% decline in housing prices. If the bank looks at risk at that level, they don't go near it. There is an addition foreign investor loading, since they are even less inclined to trust the risk of chinese investors.

To this there is an addition 'cost of capital' concern.

The interesting thing is to see the state of the rental market vs the retail. Renting has gotten tight in recently months, and at the same time lots of houses have been put up for sale. Basically, lots of investors looking to get out whilst the getting's good and realise their gains. At the moment it seems to be holding, if it does take a while to get the asking price. However, one prod could see it all go into reverse as people realise the degree to which prices are unsustainable.

Beoz

This must be a Melbourne thing right?

Stuck in Auckland

From what I have seen its across all of Australia and New Zealand

Hence car motels

Beoz

Well I can guarantee you the investor is out in force in Sydney. Perhaps you can't see that from Auckland.

Stuck in Auckland

Through this rain no chance

OzTennis

Another trend that could become more pronounced this year is the exodus of Sydney investors from the market, keen to spend their money elsewhere.
“Half of our market is still made up of investors, although I expect some Sydney investors may head north to Brisbane or other areas for ‘perceived’ value,” Mr Driscoll said.


https://www.domain.com.au/news/the-f...161211-gt8v8g/

xizzles

Oh, I hope that's true... I really hope that's true.

OzTennis

Don't forget it mightn't be true if BO doesn't believe it. It's a prediction of course but it's from a property expert (Domain that is).

Beoz

Common sense says buy in a cheap place like Melbourne and wait for it to grow. Actually common sense says buy in Melbourne now and when the dumb arse Labor govt hands first home buyers stamp duty cheques, adding more buyers, jacking prices up further. Common sense says don't buy in Sydney as its reached the top of the market. But they said that in 2011 and its grown 15% year on year, and still growing, and investors still everywhere.

You read and believe everything in the press from your armchair in Scotland so it much be right.

xizzles

On principle, I only buy what I can afford and I'm a hoarder, so I'm not looking to flip. Property is a long term investment with a horizon beyond the horizon, so to speak. If I don't have loans to service or interest rates to worry about, then I can hold on to the property and wait for the next upturn to come about. And as long as political stability persists in Australia and human beings keep breeding like effing rabbits, property prices will always recover and be on an uptrend. Even if it doesn't double every year (unsustainable), inflation will see to it that prices will continue to appreciate.

That's my layperson take on it anyway - from a rocking chair in Singapore

Beoz

So you just save 1.2 million (the average property price in Sydney) every few years and buy property outright without loans to service.

Lucky you.

Stuck in Auckland

Every 18 months but no don't invest at the crest of a market