Housing Industry Association forecasts further market weakening

The Housing Industry Association (HIA) said that the market will continue to weaken after the value of lending to investors, as well as lending to owner- occupiers, has significantly dropped.

Over the past year, the value of lending to investors and owner- occupiers decreased by just over 20% and 7.7%, respectively.

Investor lending has now dropped to the lowest monthly level since mid-2013 which was the very beginning of the current housing cycle

Add to this the restrictions to overseas purchasers with extra taxes and borrowing restrictions and we are now seeing a decline in property markets across the board

As Investment advisers we are now seeing developers prepared to negotiate on prices for the first time in many years. Gone are the days of opening a new development off the plan and all units being snapped up in a weekend at full or overstated prices. Instead developers are now offering incentives and price reductions to clear built up stock.

From my past experience in the market this signals the time for investors to act as given you have the capacity to hold the property for at least 10 years. There are gains now to be made in the traditional Sydney areas which for many years have been unaffordable or did not stack up for Investment purposes

Please contact us to discover what opportunities are out there for MASU Property stock in Sydney.

SMSF Lending – An Interesting Case Study

Westpac Banking Group released a Statement recently to advise that they are pulling out of all Self-Managed Superannuation Fund Lending as at 31 July 2018.

This move marks a point where all 4 Big Banks & their Subsidiaries have exited this market except for a very limited offering by Commonwealth Bank for Extremely High Net Worth Borrowers.

This decision has come about for Westpac and Other Financial Institutions due to ongoing increased Lending Standards and Tightening of Affordability Assessment of Lending brought about by the increased intervention of ASIC & APRA into the Banking system.

The cost of increased Capital Adequacy requirements for SMSF Non-Recourse Loans, insisted upon by APRA, has driven this trend. An ongoing Royal Commission into Banking has also assisted in their decision making

We, at the MASU Group are still, at this point in time, able to supply access to the limited range of non-bank SMSF Lenders in the market and recently needed to utilise our experience to access funds from one of our  suppliers with the following situation.

A Loan Application had been lodged with a Major Bank two months before settlement with the Banker assuring us that Approval would be forthcoming. A decline from the Bank due to the deal now not fitting their new servicing guidelines two days before the due date of settlement could have been disastrous for our clients.

Looking at our non-bank lenders we found one who had only the previous week upgraded their SMSF offering and also reduced rates to lower than the major bank’s original offer.

Loan fees for this particular product were only slightly higher than the Bank but this is more than offset by the lower interest rates on offer. Loan documents were  executed and settlement took place avoiding the possible loss of the client’s 10% deposit for failure to Settle the Purchase.

MASU Finance & Mortgages has been dealing in the Self-Managed Superannuation Fund Loan market for close to 20 years and is well experienced in this sector to be able to assist you in your current and future SMSF Loan scenarios obviously with current financial institutions credit policies in mind.

Should you wish todiscuss not only your Self-Managed Superannuation but also your Personal Residential, Commercial and Asset & Equipment Financing needs please contact either myself or our Finance Manager, Michael Taylor on 0413 623 614