WA Perth market 2019

Is it equity that affects refinancing with Key start?

 

LVR. Keystart will do a loan with 2% deposit. Major lenders will do 95% LVR at best.

Keystart no LMI option can be a good thing in a rising market when one doesn't have much deposit.

It works something like this:
Get a loan with keystart for a 2% deposit down and acquire a property. Add value or even build a new house. Once done, get it revalued with the hope of having at least 18% more equity. Move to a major lender for an 80% lend and no LMI. Wait some more and sell or aggressively pay down debt at a competitive interest rate. Works great for FHBs in a rising market without ever paying LMI

 

Wish they extended this scheme for Investors as well, then the market will pick up,

 

LMI never bothered me, it's just cost of doing business. Stamp duty and agent fees are the killer if you ask me.

 

Mmm, we’ll introduce GST and abolish Stamp Duty. Yeah, right!

 

Well at least stamp duty is used by the government

What do the banks do with the extra LMI just place it in the deep Pocket?

 

Pay an insurer who will cover their losses if the loan goes bad. Or some banks use it to self insure for this purpose.

I don't believe any banks make money out of LMI but I could be wrong. No doubt the insurers make good money though, but not from WA in recent years. I'm sure insurers would have paid out more than they have collected in WA recently with the big market decline and mining town property bubbles that burst.

 

It is insurance premium, either they pay the likes of QBE, Genworth or underwrite their own risk of high LVR mortgages.

No one is forcing me to pay LMI (just need 8% more deposit) but stamp duty on the other hand is not optional.

 

I am all for government raising revenue based on consumption but large transaction costs like stamp duty puts a damper on transactions.

 

WA housing: State Government announces stamp duty rebates of up to $50,000 to recharge lacklustre market

https://www.perthnow.com.au/busines...ounces-50000-stamp-duty-rebate-ng-b881361268z

 

Horrible idea

 

I don't think insurers ever lose

They just raise the amount needed for cover

 

killing the secondary market and enticing people into crap investments

 

The most basic economics tells us that this can only put further downward pressure on property prices and further contribute to the the market decline...

 

Surely this only benefits the larger developers?

They will just increase prices of units/apartments by 50k

Then there will be a huge oversupply in apartments/units due to more being built

How can they think this is a good idea

 

Finbar and whatsis name will be dusting off their shelved projects and trying to achieve their presales again.

I have one project I have DA for and going to build it next year so would comply but not sure I can be bothered with all the work required to get OTP contracts done - legals, renders, brochures, blah blah blah

 

In a normal market that's exactly what would happen.

In this market the intent is to make currently unviable developments get out of the ground.

Time will tell if it works.

Btw, the property lobby primary concern is getting orders on the books of their developer members even if they are compounding the over supply.

This will result in some stock going up in blue chip locations. Elsewhere, new multi res will remain unviable.

 

I doubt they will increase the unit price by $50k. There are so many unsold apartments and sellers have no power. Increasing prices of apartments in this market is just not going to happen. It may bring some buyers to the table though.

 

Perth unit prices rise for the first time in more than a year, but experts urge caution as house prices fall

JEMIMAH CLEGG

REPORTER

OCT 24, 2019
Perth’s property market has seen a rare glimmer of hope as unit prices increase for the first time since June 2018, new figures show.

Unit prices rose 2.8 per cent to a median of $344,672 in the September quarter, according to Domain’s latest House Price Report, released today.

But experts were not convinced the market was on its way back up, as prices were still 1.9 per cent lower than the same time last year.

House prices continued to slump, falling by 1 per cent for the September quarter to $527,107, as the market continues to feel the effects of the resources bust.

The dip came despite the first jump in national house prices since December 2017, with Perth’s median nearly a quarter of a million dollars less than the national median of $773,635.

House prices in Hobart, Darwin, Sydney and Melbourne recorded quarterly gains of up to 4.8 per cent, while medians in Brisbane, Adelaide and Canberra posted modest falls of 1 per cent or less.

Median house prices, capital cities

City Median QoQ YoY
Sydney $1,079,491 4.8% -1.6%
Melbourne $855,428 4.1% 0%
Brisbane $562,847 -1% -1.8%
Adelaide $538,550 -0.6% 0.7%
Canberra $738,864 -0.7% 0.6%
Perth $527,107 -1% -2.4%
Hobart $482,960 1.3% 2.6%
Darwin $521,651 1% -4.4%
National $773,635 2.7% -1%

Source: Domain House Price Report, September quarter 2019

 

WA property owners this past year