First Home Buyer to investor, upsize, downsize and finally retirement. It is a journey but like with very journey you must know the destination before you set out.

Michael Yardney gives us the five property investing lessons you never want to forget.

As we prepare to enter Spring – one of the busiest real estate times of the year – we take stock of the market and give you an insight as to the market conditions, level of stock availability and how not to pay too much.

Louis Christopher from SQM Research says the measures taken by APRA in slowing investor demand are now having an impact on the market and it is likely the measures will slow the rate of dwelling price inflation recorded, rather than create a price correction.

Andrew Mirams – our finance expert – says the tighter banking restrictions are even further evidence that cross-collateralisation is a fatal investor mistake. He explains how and why it should be fixed.

If you need a new property manager, want to change property managers or would just like to compare your current manager to alternative managers there is a new website that will help you do that. I will tell you about the site that will service investors nationwide.

 
Transcripts:
Louis Christopher
Kevin:  Louis Christopher from SQM Research says the measures taken by APRA in slowing investor demand are now having an impact on the market, and it’s likely the measures will slow the rate of dwelling price inflation recorded rather than create price correction. He joins us.

Louis, I wonder if you’d just explain a little bit more about your thinking behind that?

Louis:  Sure, Kevin. We know that what APRA has done via the major banks has had an impact upon the market. We know this because we are seeing in our stats – for example, the total listings number jump in July, which is a pretty abnormal time for that to happen – and we know through reports on the ground of mortgage brokers and real estate agents stating that a number of their potential buyers and borrowers have decided to leave the marketplace.

We think there is a bearing there, but it’s very difficult to work out at this stage what the magnitude of this is going to be on the housing market, how much of an impact this is actually going to be on the housing market. We need to see more information come through. It’s very early days yet.

The two major factors are that, number one, property investors need to put up more money as a deposit or as equity in order to secure the investment property, to get the loan to get the investment property, and two, interest rates have gone up for property investors. Historically, of course, we know whenever those two events have occurred it has slowed the market.

I think those measures on the top of it will continue to slow the market, but I don’t think it will create a major correction. When it comes to the actual interest rate increase, it’s effectively come out at about 25 basis points, or a quarter of a percent, which in itself shouldn’t create a correction in marketplace. We need to see higher interest rates than that.

Secondly, of course, this is just one element of the market. Obviously, first-home buyers and owner-occupiers are still there, and indeed, the banks have actually loosened the purse strings a little for first-home buyers. While they’ve actually announced a rate rise effectively for property investors, they’ve lowered interest rates for first-home buyers.

Kevin:  I was really interested in your latest set of figures, too, to notice that the Melbourne listing numbers have actually fallen. It was interesting that the same day you released that, we noticed that the prices in Melbourne had increased. Is there anything you can draw from that?

Louis:  Overall, Melbourne has definitely recorded an improving property market where we’ve definitely noticed more activity except for this month. As it’s gone by, listings have actually started trending down,