Finance advice
property investors, special deals, property investment, investing

How property investors can tap into ‘special deals’

By Bianca Dabu

Recent changes in guidelines pertaining to loans and interest rates set up by the Australian Prudential Regulation Authority (APRA) has brought about a ‘softening’ in the property market, but lenders found a way to influence mortgage volumes, attract more clients, and sustain their businesses through special rates.

The disparity between interest-only rate and the principal interest rate has consistently widened since APRA introduced new guidelines which aim to stop investment books from growing too fast. Fewer investors have since entered and stayed in the market, but Aussie Parramatta’s Ross Le Quesne believes that property investment will continue to thrive and that the mortgage industry will continue to play an integral part in its growth.

While lenders have standard pricing and advertised rates available, which follow the guidelines set by APRA, mortgage brokers can apply for pricing on an investor’s behalf and get a special rate.

According to Ross: “[Mortgage brokers] can apply for pricing on your behalf to see what [lenders are] prepared to offer. I'm getting the feeling that some of them are getting … under that 30 per cent cap now with the way the rates are priced.”

In fact, he’s starting to see better pricing and “even fixed-rate pricing for interest-only”.

The scaremongering in the mainstream media has resulted in some investors dropping off the market and more sophisticated investors picking specific areas to invest in. As the level of investment loans drop, the credit policies around investment are also starting to loosen a little bit because lenders want to be as close to the 10 per cent growth rate as possible.

Ross explained: “They want quality business, so they might have a cheap rate, but then their credit criteria to actually get that loan approved is stricter than the next person.”

“It's not that simple. It's not driven entirely by rate,” he added.

Tapping into ‘special deals’

Can property investors get the opportunity to avail cheaper rates without the help of a mortgage broker? According to Ross, you’re definitely much better off with the assistance of property professionals. Otherwise, you may have to speak to lenders one by one just to find out what special rates they could offer you.

Having the help of mortgage brokers will help an investor avoid the hassle of going from one lender to another in order to negotiate rates. Aside from assisting in negotiation, a broker’s knowledge of the landscape can also help the investor’s application get approved easily.

Ross said: “You might negotiate the rate, but because [you] don't have the intricate knowledge of a mortgage broker of understanding [whether the] loan [will] actually get approved and [if it is] most likely to get approved based on their credit criteria, [then you] can just waste hours going through the rigamarole of finding the best rate, then applying but actually [getting a], 'No, sorry, sir, you don't qualify, because you haven't provided all your information up front.'" 

‘Look at the bigger picture’

At the end of the day, tapping into these “special deals” as a property investor depends largely on one’s capacity to see the options available to him. While dealing with the four major banks in Australia may seem like the safest choice, there are other opportunities out there for securing finance.

Ross’ final advice to investors: Look at the bigger picture. Do not limit your ability to grow a portfolio by only focusing on specific options.

The mortgage broker said: “You've got to be open to what is the situation in the market and what does this mean … [Take] a longer-term view on it.”

“Sometimes, it's just looking outside the box a little bit to say, ‘Okay, how can I secure [finance] because I know the money that I'm going to make from this investment long-term is more than the slightly higher interest cost is going to cost me?’ ” he concluded. 

Tune in to Ross Le Quesnes’ episode on The Smart Property Investment Show to know more about the habits he sees among the best investors in today’s market as well as how growth in the investment industry has been enhanced by the mortgage industry in the last few years.

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  ["id"]=>
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  ["title"]=>
  string(72) "Mortgages in a tighter lending economy and why Brisbane is a good option"
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  string(72) "mortgages-in-a-tighter-lending-economy-and-why-brisbane-is-a-good-option"
  ["introtext"]=>
  string(255) "

Tune in to the latest episode of Property Showcase, the podcast with the inside track on the products and businesses that will help turbocharge your portfolio, maximise returns and make your overall investment experience seamless and stress-free!

" ["fulltext"]=> string(818) "

To hear more about these services, make sure to tune in to this episode of Property Showcase!

 Make sure you never miss an episode by subscribing to us now on iTunes!

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Son Pham is the accredited Head of Mortgages at Rethink Financing\/Rethink Investing. He has over 6 years\u2019 experience writing loans, over 12 years in the wealth management industry working for the likes of CBA, AMP and private practice and he is also a licenced financial planner (AFSL 326450). He has multiple investment properties that are cash flow positive which help pay his mortgage on his home and fund his lifestyle.<\/p>\r\n

Son is able to write all types of residential and commercial property loans.<\/p>\r\n

In this episode of Property Showcase, head of mortgages at Rethink investing Son Pham joins host Tim Neary to unpack how an investor should approach getting a mortgage in place with banks tightening down on serviceability.<\/p>\r\n

Hear from\u00a0Son\u00a0about:\u00a0<\/p>\r\n

    \r\n
  • The pitfalls that he has seen people get into<\/li>\r\n
  • Interest only loans and if that is the way to go<\/li>\r\n
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    Whether it\u2019s building a successful property portfolio or investing in one of their Development Funds, Open Corp can help you through every stage of your investment journey. The team has 40 property specialists who collectively have been involved in over $4 billion worth of property transactions and the acquisition of more than 8000 homes and investment properties.<\/p>\r\n

    In this episode of Property Showcase, director of investment services for Open Corp Michael Beresford,\u00a0joins\u00a0editor of Real Estate, Tim Neary to share why he disagrees that the cooling market means that the best times are behind us.<\/p>\r\n

    In this episode, hear from\u00a0Michael\u00a0about:\u00a0<\/p>\r\n

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    • Why Brisbane is a good investment option right now<\/li>\r\n
    • How he wants to help clients take advantage of the current market<\/li>\r\n
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Mortgages in a tighter lending economy and why Brisbane is a good option
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Will Magee has had ambitions to enter into the Australian property market for quite some time, but it has been more than just finances holding him back.  Having been granted permanent residency just two weeks ago, Will is wasting no time and is now in the process of signing papers and finding his first investment property.

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In this episode of the Smart Property Investment Show, Will joins host Phil Tarrant to share why he is purchasing his first property in partnership with his brother, discuss the complications that can arise from such a strategy, and unpack the ongoing plan for building a joint property portfolio with his brother.

Will will also share how they approached saving for their first property, why he is taking out the mortgage in his name exclusively, and share their savings plan for the year ahead.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

From property in Australia to a ski lodge in Japan
Mortgage Trusts, an alternative first step for property investors
Should a real estate title be in one person’s name only?

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A property investment plan years in the making
object(stdClass)#1203 (52) {
  ["id"]=>
  string(5) "18287"
  ["title"]=>
  string(75) "Regional Victoria showing up Melbourne in price performance, new data finds"
  ["alias"]=>
  string(74) "regional-victoria-showing-up-melbourne-in-price-performance-new-data-finds"
  ["introtext"]=>
  string(139) "

Median house prices in regional Victoria outperformed that of Melbourne in the June quarter, the latest REIV figures reveal. 

" ["fulltext"]=> string(2323) "

Median house prices in the regions rose 4.0 per cent to $419,500 but in Melbourne they dipped by 0.6 of a percentage point to $840,000.

The result in Melbourne was due to a 0.8 of a percentage point fall in prices achieved at auction; this was despite a lift of 2.3 per cent in private sales.

Inner Melbourne suffered due to auction prices, where median prices fell by 4.9 per cent to $1,459,000 but it was middle Melbourne that was hardest hit, with a 5.4 per cent drop to $974,500.

Outer Melbourne had a good quarter with the median rising by 0.5 of a percentage point to $681,000.

Apartment prices in regional Victoria grew by 3.7 per cent to $304,500 while the metro media was up by 0.5 of a percentage point to $604,000.

REIV President Richard Simpson said that despite fewer sales, many sectors of the market were performing well.

“2017 was a bumper year and while the trendline has flattened, despite the fall in median house prices in the June quarter, median prices are still up this calendar year for both houses and units, in Melbourne and in the regions,” Mr Simpson said. 

In particular there was been strong growth in regional centres which is probably due to the first-home buyers’ concessions said Mr Simpsons.

“The first-home buyers’ concession has been a boon for regional areas. A new entrant to the property market buying a house at the regional median will pay no stamp duty, while a first home buyer of an apartment in Melbourne at the median price would pay stamp duty of nearly $25,000,” he said.

Mr Simpson said that more prospective buyers are looking towards regional Victoria which is also having an effect in Melbourne.

“Melbourne’s outer perimeter continues to grow. Small increases in the June quarter mean that the median prices for both houses and units have risen over 10.5 per cent from a year ago.

Mr Simpson said moving forward that vendors need more realistic expectations as the highs of 2017 are now over.

“Negative chatter about the future of the sector coupled with stronger lending controls by financial institutions has created some uncertainty and vendors need to be realistic with their price expectations,” Mr Simpson said.

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Regional Victoria showing up Melbourne in price performance, new data finds

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