Buying an off-the-plan apartment: What to look for in the final handover inspection

Post to Facebook on 12/9/2019 1:21 PM
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This does not only apply to inspecting an off-the-plan apartment before it is handover, but also when you are doing the final inspection of an existing property.

For those who had attended my first auction hands-on session, I did point out to you what other things to look for when conducting a quick preliminary inspection at an open-for-inspection.

Thank you for reading.

Reserve Bank's efforts to power the economy aren't going to plan

Post to Facebook on 11/9/2019 7:45 AM
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Posted to The Age (10/9/2019) on 11/9/2019
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https://whttps//www.theage.com.au/politics/federal/reserve-bank-s-efforts-to-power-the-economy-aren-t-going-to-plan-20190910-p52pps.html

One day, RBA governor will accept that lowering interest rate does not stimulate spending, and indeed as the article points out, it has not been able to do it, but instead push up property prices again.

High interest will dampen the thirst of property investors and give those who try to save up to buy their first home. Investors ask for return, but own occupiers are contented to enter the market first to have a house to call home. That also serves as a security blanket.

Thank you for reading.

Melbourne home buyers borrowing up to $100,000 more are bidding up auction prices after bank rule change

Post to Facebook on 6/9/2019 9:01 AM
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This blog does not show all the steps in calculations, but highlights the impact of paying extra over your budget for a property.

Just be mindful NOT to get into frenzy bidding at an auction. A property that can attract a bid $100,000 over the reserved price can only be explained that either it was a case of underquoting or the bidder had gone cuckoo just like the time before the real estate crash.

The Capital Improved Value CIV can be used as an estimate of the valuation of the property. If one bids well above the CIV, not only extra money is paid towards the mortgage interest, but also the General Council rate, Fire Levy, and Water rate.

The General Council rate is calculated by multiplying a factor by the CIV. This factor varies for different councils. City of Monash uses a factor of 0.0015835 while City of Knox uses a much higher factor of 0.0042.

If future CIV is to increase by extra $100,000, the General Rate in City of Monash will incur extra $158.35 while City of Knox $420.00. Assuming the $100,000 extra CIV remains constant for 30 years, the total comes to $4,614 and $$12,600 respectively. In fact this figure is a lot more if formula using compound interest is taken into consideration like mortgage interest.

What if the property is bidded $100,000 over $1,000,000, that is the final price is $1,100,000, then the extra stamp duty payable is $5,729 once.

According to ANZ loan calculator for an investment of extra $100,000 for 30 years at 5.53%, the extra repayment is $570 per month or $6,840 or $205,000 for the 30 years period.

These are the major expenses incur either once or during the duration of the loan.

I know many people never consider the impact, or to some think that it is too negligible to worry about. Well money in your pocket is always better than in someone else’s.

Thank you for reading.

Post to Facebook on 1/9/2019 10:36 AM
Commenting on “Melbourne suburbs where house prices rose the most and least since 2010”

At last night's (31/8/2019) dinner, a couple asked me where to invest in, for their son and daughter. My standard answer is there is NO one specific suburb or city because I am not the investor.

I have discussed several times about selection criteria, and most importantly one's mindset. People do not even spend time checking out and inspecting properties, verifying what I have said and asking me questions when in doubt. Should I be blamed if things don't work out?

So many people including real estate "professionals" have no idea about areas other than the house and neighbouring streets where they live in. Investing in real estate is in the magnitude of few hundred thousand or million dollars, and it is very expensive if a mistake is made.

Early this morning around 1 am, I was "chatting" through Messengers with a reader in this group. For privacy reason, I use gender neutral words "they" and "their". The reader revealed that they overpaid for a property and nearly led to their depression. I am still communicating with the reader, hopefully to find an optimal way to resolve their dilemma.

Blogging and messaging are not interactive enough, and that's why I like face-to-face and voice-to-voice communication. I am grateful that many of you have trusted me despite haven't met me before. I said many instead of all, because I have doubt about some of the group members.

The face-to-face meeting gives you the confidence that I am a genuine flesh-and-blood human like you are and NOT a snake-oil salesperson.

By the way, one attendee at yesterday's meeting remarked that I sounded like her parents reminding the tough time we went through in our younger days. The main difference between myself and her parents is that I offer suggestions how to avoid those bad old days.

Thank you for reading.