site map 
If you're facing extreme pressure in meeting mortgage repayments, don't fret - there are various ways and means of overcoming the crisis
"The important thing is to consider your options earlier rather than later. Although lenders calculate a person's borrowing capacity at 2 per cent above the going rate, many homebuyers who borrowed to their maximum capacity when interest rates were 5 per cent may be feeling stretched.
If interest rates continue to rise, these borrowers will find it difficult to meet mortgage repayments and should devise an action plan in advance.
Possible solutions include renting out a room, a temporary switch to different financing arrangements or applying to have some superannuation released. It takes time to gain approval to have an application for superannuation funds released during times of hardship, so do it early.
Renting out a room may be a last option to find some extra cash, but if you are going to consider it you will need to explore the legalities of the arrangement as well.
Financial stress affects all homebuyers and occurs in every property cycle, yet people often fail to take action early because of the embarrassment they feel. Too often, people are reluctant to explore their options until it is too late. But first homebuyers should bear in mind that it is a situation people have faced and overcome."
25 July 2010
Should I be buying an investment property now?
Yes. If you can buy when there is uncertainty and sell when there’s certainty, you’re going to ride the market cycles. Today, people are keen to stay where they are, do a little bit of work to their home and buy an investment property, rather than make the move and upgrade. I think it stems from the fact that this gives them options later, rather than putting all their eggs in one basket. There are two types of investors. One who will invest for income and the other for capital growth. The income investor tends to buy anything from the one and two bedroom apartments which give a higher rental return relative to the price of the property. The other one tends to buy the development site – an older house with high land value, but lower rental return. But you can get both if you follow a formula in which you buy property where roughly 70 per cent of the value is in the land and if you buy with about a 4 per cent rental yield, you can get the best of both worlds.
Most of the interest rate rises we’re going to have, we’ve probably already seen, suggesting that if you wanted to fix, you’re probably too late if you’re trying to time the interest rate cycle. The only people who should be fixing are those who definitely want to budget and know exactly what their outgoings are going to be.
Should I renovate my existing house or buy elsewhere?
When you look at the change-over costs of selling or buying, that gives you a lot of money to renovate the property you’re in. Ideally, the renovation doesn’t add dollar-for-dollar what you spend – it should add $2 for every dollar spent, which creates a fairly healthy capital gain, which is tax free. For instance, if you wanted to put a pool in, you might get 50 cents for every dollar spent. If you wanted to paint and do the front presentation of the home, you’ll probably get $2 to $3 back for every dollar spent. If you wanted to do a nice entertaining area you’ll probably get $1.50 back for every $1 spent.Should I rent or buy my first home now?
Should I wait until the next election before making property decisions?
No. You generally tend to find that sometimes government policies can cause a spike in the market – it makes it, but it also takes it back. Buyers and investors should be very wary of capitalising on short-term policy changes.
"Kensington, Coogee and Leederville are among a list of 10 Perth suburbs tipped to be the next to join the million-dollar median club," according to leading valuer Gavin Hegney.
Despite Perth's median house price reaching a record $500,000 recently, Mr Hegney said Perth's property market was still undervalued. He said suburbs such as Kensington - with a median house price of $747,000 - could break through the $1 million median in as little as three years.
"The suburbs I've picked are not necessarily the ones closer to the $1 million median mark, they are the ones I believe will move at a quicker rate," he said. "Kensington will continue to be dragged up by South Perth and is a good affordable option compared to its neighbouring suburb."
Mr Hegney predicted suburbs with a median of $900,000 or more, such as Coolbinia and Shenton Park, would break the $1 million barrier by this time next year.
GAVIN'S HOT SPOTS
| SUBURB | MEDIAN HOUSE PRICE |
| Coogee | $750,000 |
| Coolbinia | $937,000 |
| Kensington | $747,000 |
| Leederville | $787,000 |
| Marmion | $815,000 |
| Mt Lawley | $880,000 |
| North Fremantle | $856,500 |
| Shenton Park | $955,000 |
| Trigg | $842,500 |
| West Leederville | $995,000 |
Source: REIWA Figures are 12 months to 31 March 2010
18 April 2010
"Greater creativity and flexibility are needed from planning authorities to cater for Perth's changing housing needs.
"An ideal means to achieve greater medium-density living in inner-suburban areas will be for local authorities to offer planning density bonuses to build housing for retirement or first-time buying in infill areas."
25 January 2010
"(Owning your own home) is not a high priority until people are earning high levels of income," Gavin Hegney, chairman of Hegney Property Group said.
"They travel, they come back. they start to think about having a family and then home moves to the number one spot. If you had surveyed people 25 years ago it would have been different.
"There were no HECS fees 25 years ago so first on the agenda these days is getting that debt under control before they start taking on the next one."
Mr Hegney said job security had increased, which would prompt more iGens to move out of home and into rental accommodation, rather than their first home.
"You hear about the generation that want it and want it now. People always rent where they can't afford to buy and if you want it now you have to rent it.
"A lot of people moved out of rental accommodation, took the first home-owners' boost and bought their own home. Now that boost has ended I'd expect to see people go back into rental accommodation and see vacancy rates fall - the buying pressure of 2009 may well become rental pressure of 2010," he said.
19 September 2009
"Confidence had started to return but economic recovery was too soon to call, with potential challenges in store for next year" Mr Hegney said.
"The worst financial crisis since The Depression is only one year old; don't get too excited about recovery. There will be a void from first home buyers in the first seven to nine months of 2010. I don't believe the stimulus package has been the real crux of growth, though, I think it is interest rates. Last downturn they dropped by 50 per cent in three years, but this time it was 50 per cent in about three months.
"So who takes up demand from first home buyers? If it's investors, the market will smooth out a lot; if not, there will be a step back in demand and, likely, prices."
"A shortage of blocks looked set to be the biggest problem for the property market in the coming year because more lots were being sold than created" he said.
"The reason for land shortage is finance. Developers are struggling to get finance for inglobo (undeveloped) land; there's a blockage in the pipeline."
[Return to top]
