What a ride. Its been great.
Thanks to everyone who has subscribed to this blog and who continues to read it.
Traffic is increasing steadily with now over 500 unique views per day and over 40,000 unique views in the 11 months of writing this blog.
Lets go for the next 100 and upward of 1000.
I look forward to hearing from you in the future.
Best Regards
Deon
Bonus because I am in a good mood!
Click this link – I am giving away for free for the next few weeks anyway my financial e-course that I worked on for a year. This is 6 weeks of good hard core planning to help you from the grass roots with your finance. Even if your financially savy I still think this will help you. Part of this course is on my blog if you want an example.
Please click the link here which will take you too the page where you can recieve the e-course. I have activated the clickbank code so that all you need to enter is blog and you get it free – you will not be charged by clickbank. Disregard that on the website. This will save you $90.
I hope you enjoy.
April 30 2009 | Uncategorized | No Comments »
Today I read a very interesting article on stuff.co.nz about an Auction that a good friend of mine Roland Lina conducted last night in New Plymouth. It highlights a good point about what is happening in the market. The article reads as follows.
Three words are dominating Taranaki’s real estate pages “sell, sell, sell”.
As house prices and interest rates continue to plummet desperate vendors trapped in mortgages they can’t afford are looking for creative ways out.
Last night at Harcourts New Plymouth an auction attracting almost 100 people sold an expansive Heta Rd property for almost $120,000 below its government valuation (GV).
Advertised as a pre-mortgagee sale under the title “beat the bank” the six bedroom, 1582sqm, 2 1/2-year-old home had a reserve price of $380,000, was valued at $680,000 and sold for $566,000.
Auctioneer Roland Lina said the days where you could simply “nail a sign to a fence” and a place was sold were over.
“I can assure you if we had advertised it for $600,000 it would still be on the market,” he said. Having worked in real estate for 18 years Mr Lina said clever marketing was needed to get the best price and houses off the books.
Several bidders at the auction said they had come in the hope of getting a bargain but expected the “marketing ploy” would push the price way past the low reserve.
Other advertisements on both Trade Me and in real estate publications are littered with phrases such as “lawyer says sell”, “priced to sell fast”, “bank wants all offers presented NOW” and “Crunch Time!!”
Thought of as existing in a bubble, mortagagee and pre-mortgagee sales are starting to creep on to the region’s real estate market.
Industry insiders report a rise in the number of people forced to default on mortgages they got into when interest rates were as high as 9.5 per cent.
Nationally mortgagee sales listed on websites Trade Me and realestate.co.nz have more than doubled in the past year.
The country’s increasing unemployment has been blamed for the mortgagee sales.
The last comment here is one that doesn’t go down too well with me. Sure enough unemployment is one of the reasons there may be some mortgagee sales but if you get into the nitty gritty of it most of the people that have mortgagee sales at the moment are still on high interest rates. And after talking to a few people in that situation they simply say they canot afford with the incomes they are gettin to pay the mortgage.
Sometimes this figure is up to 80% of the total income goes on the mortgage. And I am sure that there are some people with more. Now think about it, on top of that yo have to eat, pay the rates, the power, the phone, the car bills, insurances and any other costs that you can think of.
What I have found is that some people I have spoken to have been surviving like this purely because of credit facilities that they have been using. For example the weekly wages goes toward the mortgage and then the rest goes on the other bills, but the shortfall is made up of credit – eigther a credit card or a personal loan. Some people have even got to the state of getting personal loans just to pay the credit card off.
Now the simple fact is that you can probably live like this for a very short time until things ironed themselves out a little, but we are in a ressession, if you cant see that or think it wont last i believe you need to have a good look around you. Mortgagee sales will rise because of this fact. As people run out of credit they need to sell or should sell. MOst people will try and hold on to what they have but in a lot of cases the bank steps in and takes over which is what you then call a mortgagee sale.
But as Roland said in the article above there needs to be some smart thinking going on and try and people need to sell before the bank steps in. In that case you as the home owner will have a little more control over what is going to happen to what probably could be your biggest asset. If you are a home owner please do take a close look at your speding and where your money is going. It is much better to try and sell before there is a problem. Becoming a mortgagee is not a nice place to be for anyone.
March 19 2009 | Buyers and Sellers and The Market | 1 Comment »
Well it is interesting to note that now after almost 5 weeks ago the OCR dropping to a record low in New Zealand of 3.5% the banks are now only just starting to pass the interest rates to the consumer. I am aware that the banks are facing increasing pressures as the sost of buying the money from over seas increases and our New Zealand Dollar drops further and further against the greenback (USD) which as of this morning was hoverng at a 6 year low of .49c
One notable company I have noticed that are being very competitive is the BNZ offering a 6 month fixed interest rate of 4.99% and Kiwibank are doing some good deals. The main point is to shop areound to find the best deal. What you will find is in this every changing market the best port of call is to talk to a mortgage broker before you commit to anything. The problem being that as the economy tightens into winter and money becomes hard to come by everyone will want the business for themselves. It is important not to get into this channel as there is so much happening every day that you need to be alert and aware.
Thats why I say get a mortgage broker you trust to help you. They are in the market and understand what is happening and in the economic times of today. A good friend of mine who is a top mortgage broker in my opinion “Kerry Kelly” is very onto it when it comes to todays market and knows how to best get finance for you. If you want to talk to her click her name which will go to her contact details and she will be able to help you no matter where you are in the country. Its worth a shot.
Below is something I read on the Herald website this morning about this very topic of banks passing on the lower interest rates to the consumer and it raises some interesting points that I think is important for everyone to be aware of when trying to get finance to buy a property in todays market.
Governor keeps heat on banks over credit
4:00AM Thursday Mar 05, 2009
By Brian Fallow
Alan Bollard
We have been putting quite a bit of pressure on the banks to ensure they are not treating New Zealand borrowers in an unnecessarily different way.
Alan Bollard, Reserve Bank GovernorReserve Bank Governor Alan Bollard kept the heat on the banks yesterday to continue lending to businesses on reasonable terms.
When Bollard appeared before Parliament’s finance and expenditure select committee yesterday, Labour’s finance spokesman, David Cunliffe, said his comment to last Friday’s job summit that the banks “should not underestimate the degree of corporate anger out there” chimed with what MPs had been hearing from major companies.
They were hearing of lending decisions now being made overseas and not by local relationship managers, Cunliffe said.
“That is a widespread concern in the corporate community,” Bollard said. “We had more discussions [with the banks] during and after the summit. My comments seem to have taken some of them by surprise.”
The banks were saying the market had got a lot more difficult, that it was harder to raise funds and riskier, and that that risk had to be passed on to corporate borrowers.
“We think that is true up to a point but it is very important they don’t go beyond that point and are there supporting investment into our recovery,” Bollard said.
“We would not want to see a home country bias [among the Australian parent banks] as is happening in
some places around the world.”
The banks said on Friday that they had increased their lending to the business sector by $3.6 billion in the December quarter and had received $4 billion in additional funding from their Australian parents.
Bollard acknowledged business sector lending had increased but said some of that was the drawing down of backup credit lines already in place plus a degree of “back-filling” of the hole left by collapsed finance companies.
Cunliffe asked if he was confident the Australasian banks were treating New Zealand corporates identically with Australian ones.
“I can’t say that,” Bollard replied, although he noted that some Australian companies were also complaining about tightening conditions and higher interest rates.
“We have been putting quite a bit of pressure on the banks to ensure they are not treating New Zealand borrowers in an unnecessarily different way – bearing in mind there are some arguments about extra risk here – or running down their balance sheets.”
Asked if he was happy about the extent to which banks were passing on official cash rate cuts to borrowers, Bollard said that at the short end of the interest rate curve there did not seem to be a big increase in banks’ margins. At the long end rates were driven more by what was happening in overseas markets.
He was more concerned about the terms and conditions of loans being tightened to unrealistic levels.
March 05 2009 | Uncategorized | 1 Comment »
Its official. Sales volume is the lowest it has been for 16 years 11 months and the market has never been harder to work. Sellers, Buyers and agents… We are all having to adjust, compromise and accept that the days of the boom are well and truly over. And property prices have in fact in some areas come back 10% and some places maybe more. Negativity is so easy to talk about these days when the markets are depressed. Every day we are all hearing about the Credit crisis, banks bailout, tougher lending, house prices and sales fall, car industry crashes, jobs been slashed, and I could go on for a very long time.
These of course are the reality of today but we have to look in hindsight at whats happened prior to bring this about and the fact of the matter is that too many of us are forgetting about is that from 2000 to 2007 there were 7 years where there was the biggest economic growth this world has ever seen. This created jobs in huge amounts businesses were making money without huge expense and effort, many people bought property and in 4 years sold it for double what they paid for it enabling them to buy bigger and better homes and allowing others to get into the market easily at the time. We were all living relatively good lifestyles and many of us were probably living at a level above where we deserved to be.
Reality has hit home but is this a reason to be scared, freak out and stop doing the economic activities we used to do? NO! It’s a time to consolidate definitely and a time to work smarter and stop being lazy. Do you want to be left behind and watch the ones who take action now prosper in ten years time. Are you going to be the one who says, dam I wish I took action when there was time. I sure hope not. There is no reason to worry, it’s time to start opening your eyes up and see whats happening around you. We have seen a major shift in the market place one which few people really expected, homes and property continue to be bought and sold at new levels every day of the year. There are always people who need to sell, and people who need to buy, and so long as there are these 2 people in the market, property will sell. It just won’t sell at prices that where around in 2007.
Housing prices today right now are in many places at a level that has made homes right across the board more affordable. And in my view the key to selling your property in 2009 will be in the ability to show that your home has the best value for money on the market, and attract the right buyers to it, and when you’re buying and selling on the same market you aren’t gaining or losing any of that market change. Don’t be afraid to step up to the mark and make a move.
There are some very good buys out there now. We don’t know if there will be better buys to come. All we can do is work with what we have now, and there are plenty of people wanting to sell. Plenty of people are wanting to buy. Enquiry on this blog has doubled in the past three weeks and the search terms are mostly about how to find a good buy. If you want to know where a good buy is, talk to a trusted real estate agent. In this market as a seller they are going to be your best help and also for a seller a real estate agent will be helpful in so many ways. Its bridging that expectation gap which the agents do in order to meet everybody’s needs which is so important.
I have a very large social network online and am in constant contact with them. Today I conducted an experiment. On Twitter I asked a simple question. ‘What are your concerns going into 2009?’ 70% of the response I received was positive and about the opportunities that they see coming into play now. The other 30% were concerned about the financial pressures of life. Which person do you think is going to take action and prosper from it.
Take action. Don’t sit by and let things happen before you. If you have a problem, for example you need a job transfer somewhere and you need to sell the house, take action and sell it. Maybe consider a part swap of a possession somewhere else or something else to sweeten the deal to the buyer. These things will work and you will see the results. I believe the time of opportunity is near. But the opportunity is lost if your too late. Be in. Don’t be scared and think of the long term goal. If your purchasing a home today, tomorrow or in the near future good luck. There are some great buys out there for you to snap up and they arent a trick. This is for real. People lived lives a step above what they earnt and now are having to take the hit. This is the opportunities for you.
December 16 2008 | Buyers and Sellers and The Market | No Comments »
Yesterday the ANZ National Bank announced property loans will now have to have a 20% deposit. Now this closes up the banks and means that lending in throughout New Zealand is tightening up and buying is becoming a lot more difficult. The 20% deposit in many cases will now need to be savings which means that gifting or using equity from another property is not going to be accepted by the banks. The banks are saying even if you want to buy a rental investment home they want to see at least 10% savings from your bank.
This is going to a have huge impact on the first home buyers market. For an average home in Christchurch which is sitting around the $300,000 mark, under these new conditions a buyer will now need to have clear savings of $60,000 before the banks will look at doing a loan. A few years ago you could get in with 5% deposit which will have been $15,000, and there were many lenders doing it for less than this.
Generally speaking, we will not be offering new lending in excess of 80 per cent LVR(loan to value ratio. In some specific circumstances we may be in a position to lend above 80 per cent but customers will be required to demonstrate an undoubted ability to service the loan in the event of changed financial circumstances.
This is the official statement from the ANZ National Bank:
* For all new lending, we will be ensuring that both the bank and the customer understand the value of the property in question. Where we do lend beyond 80 per cent LVR, we will require a new registered valuation.
* We will continue to consider LoDoc (low documentation) but to a maximum of 60 per cent LVR.
* We will continue to support our residential investment customers but are unlikely to lend above 80 per cent LVR. For all new residential investment lending applications, we will seek a registered valuation will be required where the LVR is greater than 75 per cent.
* This comes into effect on Thursday 27 November and applies to all new lending applications. Existing lending arrangements and commitments will not be impacted.
* This applies to ANZ and The National Bank.
If you’re a first time buyer and want to buy a home you need to save. We have come off a number of years where things have boomed and as a part of this have naturally adopted a society of spending and consuming. There are huge amounts of temptations out there to spend money on, there are countless amounts of gadgets that are constantly evolving and needing updating, flash cars and the temptation to spend mega money on small do up projects. These things have been a way of life for many but if you want to buy a home in todays market, even though prices are falling you will need to save. This is so that you can both have enough money for the deposit for a loan and then to demonstrate to the lender (the bank) that you can save and service the loan.
What effect could this have on the already unstable market that is looking for buyers. There is a huge supply of houses on the market and with very few sales already it might just make it harder to find that buyer who can buy your house.
If you are a first home buyer talk to your mortgage broker or bank manager, they can help you clear up any questions you may have and even maybe able to set you on a path to achieve what you want. Talking to my broker today banks will stray from these harsh lending criteria but only on a case by case basis. It may mean that you will need to get gifted some money from your parents to top you up for a loan, it may mean they need to have take out small loans or borrow back on their own equity if they have some. There are options. Its now just a matter of being more creative and committed to saving for that deposit.
November 27 2008 | Buyers and The Market | 1 Comment »
This is a small exert from an interview I did with a guy named Bill James. Bill is a great financial adviser and I have been working closely with him in creating a book and a workbook that should be ready for print in a few months. I thought this was important for buyers and sellers to understand.
A lot of people who have gone right out and bought a home without actually taking the time to make sure their backyard was in order. In New Zealand we have a massive amount of debt. There are a lot of people who look rich who are not rich and it’s a house of cards. And there’s a terrible old expression I always remember which is “fur coat on top, no knickers underneath” which means it looks great but it’s got no substance.
The first thing you’ve got to do is sit down and actually have a look at yourself and have the patience, which is not a great commodity in this day and age, to put your backyard in order so that you kind of clear the decks of debt and you start to put your own money aside.
Now that starts with the absolute basics. You need to get out of this habit of borrowing. So step one is to have a look at where you are now and say, ‘Well just how big is my problem?’ and realize that it is a quantifiable dollar amount.
A lot of people make the mistake of thinking they can fight it without putting it into a dollar figure. And it is very, very hard to beat a smoke dragon. But as soon as you make it solid by saying ‘Oh, okay, so I’m $20,000 in debt,’ even though that’s a lot, its solid amount and you can now stick a sword in it. It’s no longer a smoke dragon. It’s become real and so you can cut it into pieces and chew it up in $10 lumps, whereas when you fight smoke you slash away at the air and you do absolutely no good because it always just moves around you and you never seem to get your hands on it. So you have to first look at where you are now.
The next thing you have got to do is you’ve got to stop getting into any more debt. It sounds easy when you say it like that but the analogy I often use is to find someone in my audience that is a smoker and suggest that they simply don’t light another cigarette and therefore I have solved their problem and they are no longer a smoker. Of course it’s not that easy but nonetheless it’s something you’ve got to do because one of the keys to being rich is savings, but also stop debt.
I believe that you’ve got to accompany the idea of stopping debt also with having your own money because it’s not just the fact that you have no more debt, it’s the fact you get out of the habit of putting your problems on a credit card or borrowing money to cure the problem.
Don’t underestimate how important it is to have your head in the right place before anything else will happen.
Now the next step of that then is there are only two places you can get money from when you need it. One is borrow it and that will cost you interest; a retail interest contract, that can be well into the thirties of percents. The other place is yourself and so what I’m saying is you need to actually become your own bank. And again it sounds easy enough said quickly but it is hard to do.
Now when I get people to sit down and put on one side of the page everything they’ve got to spend: the rents, the power, the food, the petrol, everything. And then on the other side of the page they put what they earn. The reality is there’s a gap in between that is often many hundreds of dollars a fortnight or $500, $600, $700, $800 a month. And the question then begs, so what happens to that? And the answer is almost certainly ‘Gee I’ve got no real idea.’ and so most families actually have a huge chunk of leakage.
If you’re not in that situation and you literally are living on every cent, then you need to get off your butt and you need to go down and get some proper budgeting advice. There’s a pride aspect that comes into this which is ‘But if I need budgeting isn’t that an admission that I’m no good at something?’ That is a crock. If you need it do it!!!
The moral of the story is that you need to sort yourself out first. You must make sure that your back end finances are in check and that your emotionally up to buying a home. There is nothing worse than getting your home taken off you by the bank because you haven’t budgeted for an unforeseen expense.
Deon Swiggs
Property Profits
August 08 2008 | Buyers | No Comments »
Buying a home is a big step in your life and should be a very exciting time. Unfortunately, many individuals rush into buying a home with out considering the implications is has on their future. If you’re considering making the move to own it’s important you weigh all the options, and consider what if anything will affect the feasibility of you’re purchase. If this is you’re first time in the housing market consider the following before you make your big move.
- Get Your Finances in OrderHave a lot of debt racked up? If thats the case, you may want to play catch up before you even think about buying a home. Bad credit is bad news for those who want a buy a new home. In most cases you will need to get a mortgage before you buy and this means your credit will be under scrutiny. Start getting acquainted with your credit score and begin fix the problems well before you apply for a mortgage.
- Think about the FutureIf you have a job or other obligation that may require you to move or travel for extended periods of time you want to think twice about rushing into the housing market. Buying a house is a commitment that will tie you down to a particular location for at least a few years. It’s not easy or economically feasible to pack up and sell your home at the drop of a hat.
- Educate Your SelfAs a first time home buyer one of the worst thing you can do is go into the market unprepared. Familiarizing your self with words and phrases that are used will allow you to better comprehend the market. A better understanding of the home buying process will enable you to make a well educated decision when it comes to you’re final purchase. Entering the market blindly can turn you’re home buying dreams into a nightmare.
- Be Rational We all want to live in the home of our dreams. Unfortunately, like most things in life, the housing market must be approached from the bottom up? Renting is the start of the home owners journey. With your dream home serving as the final destination you will most likely need to take a few stops on the way there. The logical step is to buy a house you can afford not one that lands you in economic turmoil. Consider your first home an investment that you can improve upon over time. Once the home is improved you can sell it and bring yourself one step closer to your dream home. Buying out of your league can be a huge problem so set a budget and find a home within your means.
- Ask For HelpDon’t be determined to have a go at it alone. Buying a home is a complicated process and sometimes it really helps to have someone walk you through it step by step. Agents are more than willing to help you look through home listing, find what your looking for, and ultimately take you from start to finish.
April 22 2008 | Buyers | No Comments »
