Investment tip: 2019 is not a year to be aggressive, says mortgage broker
1 minute read

Investment tip: 2019 is not a year to be aggressive, says mortgage broker

Investment tip: 2019 is not a year to be aggressive, says mortgage broker

by Bianca Dabu | February 07, 2019 | 1 minute read

Despite a ‘big year’ predicted for the Australian property market this 2019, one expert encouraged investors to practice caution when transacting across the real estate sector. How can investors succeed in today’s changing market?

Calendar 2019
February 07, 2019

As investors are given more financing options following the removal of cap on interest-only loans in the beginning of the new year, mortgage broker Ross LeQuesne said that there will be a lot of opportunities in the property market over the coming months, particularly for those with existing loans.

Several areas also have new properties coming in, further improving buying opportunities.

“There's going to be new opportunities in the market, especially out in Rouse Hill. It's booming out there,” Mr LeQuesne highlighted.

However, despite a lot of markets turning into buyer’s markets, he cautioned investors about buying too aggressively.


According to him, this year will be all about good preparations and, ultimately, ‘buying well’ instead of buying all.

The mortgage broker said: “There's some real opportunities to buy well. They need to simply review their portfolio and just see what they can do to bunker down some cash flow to make sure that they're ready when the opportunity comes.”

Game of finance

One of the challenges that investors are facing nowadays is the tightening of credit conditions as a result of regulatory interventions by the Australian Prudential Regulation Authority (APRA) and other governing bodies as well as the recently-concluded banking royal commission.

For instance, a great amount of focus has been shifted on living expenses as the primary determinant of loan eligibility.

Where borrowers used to depend on the Household Expenditure Method as a baseline for determining the living expenses based on the size of the household, they must now be able to justify their expenses in order to have their mortgage applications considered—down to the smallest coffee and the cheapest app subscriptions.

“Property is always a game of finance, but in 2019, it's definitely going to be defined by being a game of finance,” Mr LeQuesne said.

As a result, consumer confidence started to wane, thus affecting the balance of supply and demand across property markets.

“The phone has actually been running hot since we have come back from holiday, but there is also a mix of people that are listening to whatever excuses they want, whether it's the election or the slowdown in the property markets. All they ever have is a reason not to do it.”

While there’s definitely nothing to be afraid of in today’s market, practicing caution might do investors well over the coming months.

Personally, Mr LeQuesne opt to go through the process of refinancing his existing loans and fixing or extending his interest-only loans to ultimately improve the value of his portfolio over the long-term.

If he ever decides on purchasing new assets, he will be focusing on commercial properties, which could provide him good yield, stabilise his cash flow and give him an opportunity to expand his safety buffer.

According to the mortgage broker: “2019, I would say, is a year to really not be aggressive but to take advantage of opportunities as they arise, whether that be as simple as to renegotiate your rates or your rents.”

“There will be some real buying opportunities, so as they come up, don't be afraid to act when you know it's a good thing. Be finance-ready.”

Ultimately, those who get ahead in the property investment landscape are the who make well-informed decisions backed by knowledge and necessary due diligence, Mr LeQuesne said.

Analysis paralysis

Exactly how long does it take to be well-prepared for an investment opportunity?

While there’s no definite schedule for preparing for property investment, there’s certainly a point of saturation from all the information available to the public, according to Mr LeQuesne.

Often, ‘information overload’ stops budding investors on their tracks, ultimately defeating the purpose of preparing for their investment journey.

“There’s what we call in the industry as analysis paralysis—investors who have listened to every podcast under the sun or read a lot of books, only to get to the point where they're just confused. They've taken in so much information that it stops them from taking action,” the mortgage broker said.

At the end of the day, preparation should come with action, whether purchasing a property or simply updating terms on existing assets.

As the game of finance plays out in the property investment landscape, investors are advised to keep moving forward despite the tighter lending environment. After all, the market will continue to create opportunities—it will only be a matter of who is ready to grab them.

“It could be purchasing a property, or it could be simply renegotiating your rates. Property is never a passive game. It's not something that you worry about—it's something that you have to constantly take action in,” Mr LeQuesne concluded.


Tune in to Ross LeQuesne's episode on The Smart Property Investment Show to know more about the strategies that will help property investors win this 2019.

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