I am in the process of planning a webinar on the topic of “Raising Property Finance in Todays Economy”.
What is your greatest challenge you are experienceing right now in raising finance for your property investments?
What is your number one question you would like answered on the topic of raising finance for your property investments in todays market?
Post your answers/reply below and I will make sure you get an invite to this exciting webinar.
Cheers
Lee.
Wall Street posted its strongest gains for the year after Citigroup
announced it had been operating at a profit for the
first 2 months of the year
• Dow Jones +379.44 pts, S&P500 +43.07 pts and Nasdaq
+89.64 points
• Citigroup jumped 38% after it wrote in an internal memo it
had posted a profit in the first 2 months of 2009
• JP Morgan Chase also climbed 23% and Bank of America
climbed 28%
Isn’t it amazing how starved we are of good news. A simple Citbank internal memo stating that they had made a profit in the first two months of 2009 has seen the market rally and banks sky rocket.
It just goes to show how fast things could turn around if we get some more good news.
Here’s to some more good news!
Lee Sutherland
Broker News today reported fewer households are currently experiencing mortgage stress compared to December 2008, according to Fujitsu Consulting’s latest Stress-o-meter.
It reported that 635,000 households were experiencing some degree of pain in the first month of 2009, 6% lower than December 2008 and well off the peak of 900,000 in August last year.
There was also a 15% fall in those facing a potential sale or foreclosure, “thanks to the significant drop in interest rates, and the government payments in December”.
This is great news!
Lee Sutherland
Andrew Inwood, Founder and CEO of CoreData Research, today announced that high net worth investors are returning to the property market. High net worth investors are defined as having more than three million dollars to invest. The latest survey showed that this group of investors are not happy with leaving their funds sitting in cash. The returns now achieveable from real estate is attractive and relatively secure he said. Theses investors are searching for and buying the bargains that are now available in the market.
This is great news for the real estate sector as it shows the faith that this group of investors have in real estate as an investment.
Happy investing!
Lee Sutherland.
The official cash rate could drop as low as 3.75 per cent by early next year, according to forecasts by NAB.
NAB said yesterday its October Business Survey and Economic Outlook had revealed record low business confidence and a sharp deterioration in business conditions.
With downside risks to growth strong, NAB adjusted its forecast for the official cash rate to 3.75 per cent for early 2009 – previously 4.5 per cent for mid-2009.
“We expect another 75 point rate cut in December and then another 75 basis points in early 2009,” NAB said.
This would certainly be welcome news for all property investors.
Until next time, happy investing.
I have just seen the first positive media report on the property market for a long long time. A Current Affair, on the Nine network, reported on the top 100 suburbs to buy real estate. This is the first media report that has not been negative since the world financial crisis has hit. With all the indicators showing that property prices should rise, all that is missing now is confidence. The media unfortunately play a large role in affecting consumer confidence. Lets hope that this is the first in many positive media reports to come.
Happy investing!
Below is the RBA announcement:
At its meeting today, the Board decided to reduce the cash rate by 75 basis points to 5.25 per cent, effective 5 November 2008.
World financial markets have remained turbulent over the past month. Global equity prices have been volatile and fell further in net terms, and there have been significant exchange rate movements, including a sharp depreciation of the Australian dollar. A number of governments have announced measures to strengthen their financial systems, which should help to stabilise conditions over time.
International economic data have continued to point to significant weakness in the major industrial economies, and there have been further signs that China and other parts of the developing world are slowing as well. These conditions have contributed to further falls in world commodity prices.
In Australia, the overall path of economic activity appears until recently to have been close to what the Board had expected, with a needed moderation in demand occurring after a period of earlier strength. Recent reductions in borrowing rates, the depreciation of the exchange rate and the fiscal stimulus announced in October will work to assist growth in the period ahead, but deteriorating international conditions and falling commodity prices will have a dampening influence. On balance, it appears likely that spending and activity will be weaker than earlier expected.
Consumer price inflation in Australia remained high in the September quarter. As expected, CPI inflation in year ended terms picked up to 5 per cent, while underlying measures were just over 4½ per cent. Nonetheless, capacity pressures are now easing and, given the outlook for more moderate growth in demand and activity, it is reasonable to expect that inflation in Australia will soon start to fall. Global disinflationary forces will assist in this regard, though the depreciation of the exchange rate means that the decline of inflation to the target could take longer than would otherwise be the case.
Weighing up these international and domestic developments, the Board judged that a further significant reduction in the cash rate was warranted. The Board will continue to monitor developments and make adjustments as needed to promote sustainable growth consistent with achieving the 2-3 per cent inflation target over time.
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This is certainly good news for all borrowers with the cut being larger than the 50 basis points cut the market had anticipated. That now makes a total of 175 basis point cut in interest rates in just two months. It will be interesting to see if this has any effect on property prices given the lack of confidence that is dominating the market at present.
Till next time….happy investing.
The Rudd Government today announced a $10.4 billion Economic Security Strategy to strengthen the Australian economy in the face of the worst global financial crisis since the Great Depression.
Part of the Strategy is that first home buyers will be eligible for grants of up to $21,000 under a decisive Rudd Government initiative designed to stimulate housing activity and give first home buyers a better chance in the housing market.
More than 150,000 first home buyers are estimated to benefit from the time-limited scheme.
Under the First Home Owners Boost:
• First home buyers who purchase established homes will have the grant which they are currently entitled to doubled from $7,000 to $14,000; and
• First home buyers who purchase a newly-constructed home will receive an extra $14,000 to take their total grant to $21,000.
First home buyers will be eligible for the First Home Owners Boost from today (14 October, 2008).
All contracts entered into by 30 June, 2009 will be eligible for this new additional assistance.
The Rudd Government will invest around $1.5 billion in the housing market over 2008-09 and 2009-10 through this initiative.
The Australian Federal Government has announced that all deposits in Australian banks will be guaranteed by the Australian Government, no matter what size, for the next three years.
This is great news and hopefully will add a little bit of comfort for the Mums and Dads who have been panicking about their savings and thinking of withdrawing them from the bank and shoving them under the mattress.
Only time will tell what the financial markets think of this move.
So at least now we know our savings are safe!
Until next time, have an awesome day.
In a surprise move, the RBA lowered the official cash rate by 100 basis points – the largest cut in more than 15 years.
In response the Banks said they would cut their standard variable rate by 0.80% while Aussie Home Loans said it would cut 0.75% of its branded mortgages.
Quoting the corrosion of the global market and wholesale funding conditions, the RBA significantly eased its stance on monetary policy - the 100bps reduction was the first since May 1992.
“The recent deterioration in prospects for global growth, together with much more difficult market conditions even for creditworthy borrowers, now present the risk that demand and output could be significantly weaker than earlier expected,” a statement from the bank said.
“Given that background, the Board judged that a material change to the balance of risks surrounding the outlook had occurred, requiring a significantly less restrictive stance of monetary policy.”
The RBA said it also took account of the funding costs in wholesale markets, and decided that an unusually large movement in the cash rate was appropriate in order to bring about a significant reduction in costs to borrowers.
It stressed however, that the move should not be seen as establishing a pattern for future decisions.
As of 8 October, the official cash rate will fall to 6% – a level last experienced in August 2006.
Analysts are now predicting further interest rate cuts at next months RBA meeting of 50 basis points with the long term view that the RBA will cut rates to 5%.
This is great news for all those investors out there who are struggling with cash flow. It still leaves getting money out of the banks for new loans or refinancing a HUGE challenge.