PIPA In the News

Mon
18 Feb
2019

The CEO of RIskWise Property Research, Doron Peleg, was today, February 18, invited to discuss housing policy with Prime Minister Scott Morrison, Treasurer Josh Frydenberg and Assistant Treasurer Zed Seselja.

Mr Morrison opened the meeting which was also attended by such property heavyweights as Yellow Brick Road founder founder and chair Mark Bouris, hedge fund VGI Partners Global Investments director Noel Whittaker, Property Investment Professionals of Australia chairman Peter Koulizos, Real Estate Institute of Australia acting chief Jock Kreitals, the Master Builders Association of Australia and the Property Council of Australia.

Mr Peleg said the property market had already been hit hard with an impact on confidence and lower demand for credit across the country, and the steepest reduction in prices since 1980 in Sydney and Melbourne, with weaker markets like Perth and Darwin also significantly impacted, and more reductions forecast.

“There’s also been a reduction in dwelling commencements of -2.2%, mainly units, with more expected due to the 22.5% drop in dwelling approvals,” Mr Peleg said, adding many developers were not able to meet presales and sales targets, a trend that would continue if Labor’s proposed taxation changes take place.

The ALP has proposed limiting negative gearing to new housing and reducing the discount on capital gains tax from the current 50 per cent to 25 per cent to increase housing affordability, however, he said this solution would be only be temporary.

Mon
18 Feb
2019

The head of a mortgage broker aggregator has spoken out against the banking royal commission final report, claiming if the recommendations on broker remuneration are implemented, it could result in all property investors paying “significantly” more to secure finance.

John Kolenda, the managing director of mortgage broker aggregator Finsure Group, has concerns about what changing the remuneration structure for mortgage brokers would do for competition. Brokers currently handle 60 per cent of Australian mortgages.

Under the current government, mortgage brokers will have a best interests duty placed on them, as well as a ban on trail commissions and volume-based bonuses on new loans. The government will also look to review a borrower-pays remuneration structure for mortgage brokers in three years. Currently, mortgage brokers provide a free service for Australian borrowers.

Mon
18 Feb
2019

The Coalition government rolled out Yellow Brick Road founder Mark Bouris and the heads of several real estate lobby groups in an attempt to keep pressure on Labor's negative gearing policy.

Treasurer Josh Frydenberg, senator Zed Seselja, and Prime Minister Scott Morrison attended the meeting where concerns were raised chiefly about the timing of Labor's policy.

"When you converge the royal commission and APRA regulation with a big fiscal policy change you are asking for trouble," Mark Bouris said.

"Its not whether the policy is good or bad, it's about the timing of it and as the third largest aggregator in Australia I can tell you there is market anxiety out there."

Sun
17 Feb
2019

Investors are poised and preparing to pounce on established properties to safeguard themselves against changes to negative gearing in the event Labor wins the federal election.

Industry groups have expressed fears that restricting negative gearing tax concessions will cause investors to further recoil in a market already in the midst of a downturn, but in the immediate term there's been an increase in investor inquiries.

"We are definitely seeing astute investors out there who see there's a correction in the market place but know that getting in before a potential grandfathered [negative gearing] clause is sensible investing," said Property Investment Professionals of Australia chairman Ben Kingsley said.

 Labor has vowed to abolish negative gearing on established homes if it wins the next election but will continue to allow investors to benefit from the tax concession if they buy newly built properties such as off-the-plan apartments.

Thu
14 Feb
2019

Property analysts warned the banking royal commission could make it even harder for would-be homebuyers to get a loan.  In the wake of the report, it appears buyers will still have to jump through hoops to get a home loan, but the process appears unlikely to get harder. 

The big question for buyers in the wake of the Royal Commission's final report was whether the report would make any recommendations that would make buying a house even more difficult.

Here's what the recommendations mean for home buyers.

Wed
23 Jan
2019

THE long-awaited report from the banking royal commission proves that even within regulated environments lawlessness can be rife.

Property Investment Professionals of Australia (PIPA) chairman Peter Koulizos said the multitude of examples of potentially criminal activity within the financial services sector was a sign of what can happen when money becomes more important than client outcomes.

“If this is what happens in a regulated industry, imagine the situation in the property investment advice sector where spruikers can ruin people’s financial lives without much chance of prosecution because it is an unregulated environment?” Mr Koulizos said. 

Thu
17 Jan
2019

The corporate regulator has begun proceedings in the Supreme Court after allegedly uncovering unauthorised property investment advice.

In a statement, ASIC alleges that Richard Gardner and Advanced Wealth Financial Services provided advice to clients about:

  • establishing a self-managed super fund for the purchase of a newly built investment property;
  • specific properties for development; and
  • specific developers or builders to build the investment property.

Additionally, ASIC also alleges that Mr Gardner received substantial commissions from the builder or developer used for building the investment property. 

Tue
15 Jan
2019

The way property is bought and sold has changed a lot in Australia over the past few decades.

Not only have we seen listings move from shop windows to online portals, but buyer's agents have become a growing part of the sector, too.

While they have been a part of the profession in the US for a long time, it is only in recent times that they have staked a claim here.

Compared to selling agents, they are still a small minority of the sector, and like so many things it is taking a while for legislation to catch up with change.

And that's why it's imperative that you do your homework before engaging someone to buy property on your behalf – because sometimes they might not be what they seem. 

Sat
05 Jan
2019

 

New research from the Property Investment Professionals of Australia (PIPA) has found that one third of first-time buyers are opting to invest rather than to buy a home.

The 2018 PIPA Investor Sentiment Survey found that about 36 per cent of first-time buyers had opted to invest in property and continue to rent instead of buying a home to live in over the past 12 months.

PIPA chairman Peter Koulizos said while it was the first time that specific question had been asked in the annual survey, one could presume that rentvesting as an investment strategy had been a trend for some time.

"What this insight shows us is that first-time property buyers generally have probably been more active over recent years than official statistics originally recorded," he said. 

Fri
04 Jan
2019

Softening values in key markets like NSW and Victoria are exposing investors and home owners to mortgage defaults, particularly if they are heavily leveraged to secure a property.

Spurred by falling property values, Moody's predicts a rise in 30-day arrears for Australia's residential mortgages.

The ratings agency tips NSW and Victoria to top the list, as the states that have had the biggest price drops proportionately.

Loans being converted from interest-only to principal and interest will also force delinquencies. The push to principal and interest payments in 2018 was in part due to the banking regulator's cap on interest-only lending, which has lifted for lenders from this month.