The most horrific commercial property experience and lessons learnt

I caught up with my parents last week, who are based in the Hornsby area – shout out to the Asquith Magpies! Talking to them about the residential property market, it was interesting to hear their opinions about of how significantly things have dropped in the area over the past 12 months. Dad reckons it’s been about a 30% dip.

I find it really interesting to compare this against the lower North Shore commercial property market, where I see a lot of transactions as my office is based in North Sydney. Availability is low, rents are significant and values seem to be holding strong, if not increasing.

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Tim Russell
How guarantor loans work, plus an alternative option to consider...

With the Sydney market cooling over the last few months, it seems that entry level prices are now at levels where first home buyers are once again interested in entering the market. Latest data from the ABS has revealed that first home buyers now make up 18.3% of the mortgage market, which is the highest level since 2012.

At Multipart Finance, we’re seeing similar results and are dealing with the most first home buyers we’ve ever seen.

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Tim Russell
My thoughts on the Royal Commission

I love super bowl Monday. It’s my little tradition I have with a few friends where we take the day off and enjoy American wings and beers whilst watching a game we don’t really understand or care about too much!

But this year, my super bowl experience was rudely interrupted by the release of the final report from Commissioner Hayne on the royal commission. What was meant to be a review into misconduct of the financial services sector, particularly in banking, instead turned out to be strategy to shut down the mortgage broker industry.

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Tim Russell
Finance predictions for 2019

Well here we are, another year is upon us and like every year, I am full of optimism and excitement for the year ahead. Now of course, this excitement only has a finite amount of life in it and I’m sure I’ll no doubt turn into my bitter, jaded self in the months ahead!

However, nonetheless, I wish you a belated Happy New Year and hope 2019 will be your best year yet.

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Tim Russell
How commercial lenders look at servicing differently than residential providers

Since APRA imposed sweeping changes to the residential lending market in 2015, home loan approvals have dropped significantly. The ABS recently reported total home loan approvals have fallen by 13.6% year-on-year and within that drop; investment loans have slid 20.5%.

One of the major contributors to this drop in lending has been the policy changes that all APRA regulated banks have imposed. Prior to the changes, most lenders would assess a new loan with an interest rate buffer of 7.5%, but any loans a customer had with other lenders would be assessed based on what the actual repayments were.

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Tim Russell
How to finance multiple investment properties in today’s market

The other week, I came across an article which confirmed a suspicion I’ve had about what many investors may be going through with their home loans right now…

Written by business reporter Stephen Letts for the ABC news site, he referenced mortgage comparison website Mozo who found that, “Mortgage holders who borrowed near their limit in recent years where finding it increasingly difficult to refinance their loans and were “trapped” with their current lender.”

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Tim Russell
Why commercial loans can be a better option than residential?

The past couple of weeks have seen further changes to the major bank’s product lines off the back of increased scrutiny they’ve been exposed to via the royal commission.

Last week CBA confirmed they would be stopping their low doc residential loan product and this week Westpac and St George confirmed they would be calling stumps on their SMSF loans.

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Tim Russell
What should you do? Buy a place to live or purchase an investment property?

It’s a conundrum that many people face right now, particularly with the property boom we’ve seen in Sydney & Melbourne over the past 5 years. That is, the decision to focus on saving for a place to live or perhaps to purchase an investment property instead.

I get asked this question a lot by my clients, so I thought I’d give you my two cents in case this has been something you’ve been thinking about recently.

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Tim Russell
The 3 finance factors that will make or break a development

The May CoreLogic Home Index values came out last week noting the 8th consecutive month-on-month fall in property values nationally since the market peaked in September last year.

So if it wasn’t clear before, I think we can all now agree that we’re well and truly entered a new phase of the property cycle with the market effectively swinging around to be a flat, (I wouldn’t say depressed yet) buyer favoured environment where emotion is no longer much of a factor.

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Tim Russell
Should you own or lease your office space?

Every business goes through natural cycles. The start is the most stressful time where money is flying out the door and there’s not much coming back in!

Eventually though, things start to become more established. Cash flow evens out and in doing so, one of the questions you might have is, “I love our office but why are we spending all this money on the lease when we could own it ourselves?”

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Tim Russell
All you need to know about bridging finance

They say that purchasing your first property is the most stressful thing you’ll ever do. For those that have done it, I’m sure you’ll attest to this fact. However, in my opinion, your first property doesn’t compare to the eventual upgrade in which you need to sell your current property in order to move into a new one.

 

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Tim Russell
What's ahead for commercial finance in 2018?

Similar to Australia’s recent 4-0 Ashes victory, it’s fair to say looking back at 2017 that commercial property markets had a good run!
 

So what’s ahead in 2018? Well, it’s always a bit of fun to make a few predictions at the start of the year and then look back later on to see how they panned out.

Below are my four predictions for what’s install for commercial markets this year…

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Tim Russell
Why Bank Policy is Going to Matter Even More in 2018

Since the introduction of APRA regulations in 2015, the overall market has flattened due to tougher lending criteria resulting in borrowing capacities greatly diminishing.

There are no signs these regulations will disappear this year. However, what we have seen during this time, particularly over the last 6 months are smaller lenders, not governed by APRA creating niche policies to capture certain segments of the market.

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Tim Russell