PIPA In the News

18 Sep

What to look for when buying off the Plan

Investing in luxury off-the-plan properties can make a lot of financial sense, especially if you're savvy about the developers you choose and know they have a proven track record.  Rakhee Ghelani asked some experts in the field to highlight what to look for before signing on the dotted line. 

Ensure your rental return isn't soaked up by exorbitant fees by considering boutique properties."


17 Sep

Sydney buyers showing their appetite for environmentally-friendly apartments

Sydney's home buyers are showing their green side as the appetite for environmentally-friendly apartments grows, experts say. And it's not just owner-occupiers behind the trend.

Unlike most investors, who purely chase financial returns, Blue Mountains couple Owen and Kerrie Sargeant, have a rather different plan for how they're spending their money.

"When I look at the type of buildings being constructed in many suburbs, it's just high-rise after high-rise," Mr Sargeant said.

14 Sep

Using equity loans to expand your portfolio

More than half of all property investors are using equity in their homes or other investments as a means of paying for a deposit on another property. This is creating significant risks for investors and the broader economy, warns Lindsay David, founder of LF Economics.

"The Australian house of cards has ballooned through the use of issuing new loans against the unrealised capital gains of other properties in a portfolio," David said in his new report, The Big Rort. "This approach allows lenders to report the cross-collateral security of one property, which is then used as collateral against the total loan size to purchase another property. This approach substitutes as a cash deposit."

David said this practice places investors at a higher risk of default. His research indicates that those with an "officially listed [loan-to-value ratio] in the 50 per cent to 70 per cent bracket" are more likely to be close to default than those with a loan size that is at least 90% or larger.

07 Sep

Why property investors aren't necessarily as rich as you think they are

Investors have surged in the Sydney and Melbourne property markets at record levels over the past few years, with many amassing significant property portfolios.

Many Gen Y investors have made headlines for having a large number of investments to their name, often worth millions of dollars.

But are they really as wealthy as they appear?

Answering this question is about understanding how they have managed to buy properties in the first place.

05 Sep

'Risks magnified' when investors use equity loans to buy multiple properties

A common strategy used by property investors around Australia to amass large portfolios of real estate is potentially very risky, experts warn.

More than half of all property investors are using equity in their homes or other investments as a way to pay for a deposit on another property, with lenders allowing them to tap into house price growth seen during the property boom.

While this strategy is popular with property investors as it doesn't require them to cough up any savings, some commentators are raising the alarm, including LF Economics co-founder Lindsay David, whose newly published report The Big Rort points to significant risks for investors and the housing market generally.

30 Jun

WA broker 'happy' to move to fee-for-service

A Perth-based mortgage broker has explained why he would be comfortable charging a fee-for-service as the broking industry evolves, given the additional services he offers his clients.

Few Australian mortgage brokers currently charge a fee-for-service, but the contentious remuneration model has been under the spotlight following ASIC's review of broker commissions.

In its report, ASIC noted that UK mortgage brokers are paid by either an upfront commission by the lender or a fee for service from the consumer, or a combination of both.

10 Jun

Why negative gearing into property is still worth it

Treasurer Scott Morrison kept his word last month and resisted calls from economists and Labor to remove or water down negative gearing, handing a gift to the one million Australians who run a property investment at a loss. Or did he?

In the May budget Morrison may have left the negative gearing rules intact but he banned the ability to claim travel expenses for landlordsinspecting their properties and limited the ability to claim depreciation deductions on fixtures and fittings.

For properties purchased after budget night, investors can depreciate new fixtures and fittings, but subsequent owners are unable to claim deductions unless they buy these fixtures and fittings themselves.

It isn't just the Treasurer who is trying to spoil the property party for investors. The banks are too. Forced by the prudential regulator to curb property lending to investors, the majors have lifted rates on investment mortgages as a deterrence.

02 Jun

Investor shares his approach on 'asset protection'

Ben Kingsley is regarded an expert in the field of property investment, having spent years not only as a successful investor but also as a trusted adviser.

However, Ben admits that like most investors, he still worries over his action plan and strategies, and whether they are working to help him maximise the benefits he could reap from his investments.

Aside from continuous education, he cites his wife and financial professionals as vital factors in his asset protection.

30 May

Fractional investing brings new opportunities

While the federal government's First Home Super Saver Scheme formed the centrepiece of the 2017 budget in terms of its implications for younger Australians, the emergence of fractional property investment platforms represents an altogether different solution for addressing the issue of housing affordability.

That is the view of Property Investment Professionals of Australia (PIPA) chair Ben Kingsley.

Speaking to financialobserver, Kingsley said the rise of fractional investment groups such as DomaCom and BrickX represented a compelling proposition for Australian retail investors when it came to tapping into the property market as first homebuyers.

25 May

Bank disruption, merger mayhem and the craziness of negative gearing

It's a troublesome time for banks. And it's not just because of the proposed bank levy. Banks are ripe for disruption and the disrupters are coming.

Neo-banks are popular in the UK and the US. Eric Wilson is at the helm of Xinja, a neo-bank that allows users the security and top-notch customer of the real deal but everything is within an app.

If that wasn't enough of a challenge to the banks, Alex Pollak explains the Revised Payments Service Directive that's already set for the UK and Europe from next year. It forces banks to open their platforms to non-bank competitors and it's sure to make it's way here before long.

Now that Fairfax has a for sale sign, it seems more mergers and acquisitions are popping up on a daily basis, but is it merger mayhem or all in our minds?

And using negative gearing as an investment strategy sounds like a great idea (think of all those tax cuts) but property expert Ben Kingsley says it's just crazy.


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