John Symond from Aussie Home Loans takes a big stick to all politicians over the debate on negative gearing.

Lots of questions coming in about what the banks are doing, where rates are headed and how much I can borrow.  Andrew Mirams from Intuitive Finance looks at the difference between serviceability and affordability

There’s a lot of uncertainty surrounding our property markets at present, much of it related to the intense debate between the government and opposition about housing tax policy including treatment of Capital Gains tax and negative gearing and whether these would be good for property or not.  So it’s understandable that many investors are considering putting their plans on hold until after the election.   But is that a sound strategy?    That’s a question I’d like to ask of Michael Yardney.

Patrick Bright - EPS Property Search director and author of the Insider’s Guide to Buying Real Estate joins the chorus of those warning to be cautious about how you buy off the plan

Cindy wrote and asked about investing in property with the use of super funds.  She is concerned and asked for our thoughts on risk and reward.  Ken Raiss answers her questions.

We tell you about a new app that is available to help you work out exactly how much your property is worth.

 

Transcript:

 

Kevin:  It seems that a popular way for investors to get into the market is to buy off the plan. I’m attracted to a release that came out from Patrick Bright, who is EPS Property Search Director and also author of The Insider’s Guide to Buying Real Estate.

Patrick, thanks for your time.

Patrick:  A pleasure.

Kevin:  You say there are risks associated with buying directly off the plan. I suppose there are risks in buying any kind of real estate, but you’re focusing in on buying off the plan. Why is that?

Patrick:  Everything you do investment-wise carries some risk, but the risks have always been a little bit higher with off the plan, which is why you would expect a better than average return. I see that the risks have been increasing steadily over the last decade and they are at a level now, and have been for a few years, where I just think they are too risky.

You have a lot of foreign investment, which is having an impact on it. Essentially, buying off the plan is speculating. You’re punting on the fact that the market will go up, and that doesn’t always happen.

Kevin:  Is it more acute now than it was in the past? And if that’s the case, are there some off-the-plan purchases that do make sense?

Patrick:  Of course, there are going to be exceptions to the general rule view that they’re higher risk and some people will win – and people do. I’ve done off the plan investment 15 years ago and we did win out of it. But if I reflect on that, I have to admit we got lucky as much as we did some good planning. It was a fact that we did well but there was a bit of luck that came with it.

I just see that it’s got a lot harder these days. You have different rules and regulations with off-the-plan properties. We didn’t have the foreign investment impact, which I think people shouldn’t underestimate. The latest stats that I’m reading is that 24% of new off-the-plan property bought in Sydney was bought by foreigners last year. It’s 40% in Melbourne. It’s 33% in Brisbane.

These are very big numbers – and these numbers were less than 2% just eight years ago.

Kevin:  Given that we’re talking here about investment, what about owner-occupiers wanting to buy off the plan? Is that a different scenario, Patrick?

Patrick:  Sure. I’d see it a little bit differently from the point of view that you’re going to be living in it, and if you want to buy at a certain position and a certain view and in a certain building, then you’re going to need to take that commercial risk. You would hope that you would make money and the property would go up, but it’s not as big an impact on you if it doe