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Buy a house in Moreton using bitcoins?

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Moreton Investor, Bitcoins, Bitcoin property purchase, Investment properties, Real estate Moreton, Mortgage Broker Moreton, Moreton property market, Moreton property prices, rental properties

Digital dollars  ‘bitcoins’ can be used to buy just about anything – even houses, it seems.

Moreton Investor, Bitcoins, Bitcoin property purchase, Investment properties, Real estate Moreton, Mortgage Broker Moreton, Moreton property market, Moreton property prices, rental properties

The bitcoin has gained a foothold in one of the hottest business sectors in the world: Manhattan real estate. But are we ready to accept bitcoin as payment for property in Moreton?

Bond New York, a Manhattan-based real estate broker, has started accepting the digital currency for real estate transactions, the New York Post reports .

Bond New York believes it is one of the first real estate brokerage firms in the US to accept bitcoin.

“Real estate brokerage is a service industry,” said Noah Freedman, a co-founder of Bond New York.

“Our job is to make real estate transactions easy for our customers. Bitcoins are just another mechanism to help people facilitate transactions.”

Several larger real estate brokers are not sold on the idea and have no plans to set up bitcoin accounts any time soon.

“We don’t accept them, and we have no plans to accept them,” Pam Liebman, CEO of the Corcoran Group, said Friday. “We prefer the American dollar.”

“Bitcoins could be here today and gone tomorrow,” Ms Liebman explained.

“How do you trade them? What happens if people decide not to accept them anymore?”

Howard Lorber, President and CEO of Vector Group and chairman of Douglas Elliman, a Vector subsidiary that is the largest real estate brokerage in the New York area, agreed.

“We’ve never had anyone ask to use them, and we wouldn’t accept them,” Mr Lorber said.

While bitcoins trade on a few small exchanges, Mr Lorber said that one of the main problems is that there is no government “to step in and take care of problems” when they arise.

 

BITCOINS AS PAYMENT FOR AUSSIE HOMES?

Last month a Perth Hills home was listed for $1.4 million requesting bitcoin payment only. The sale would make the property the first in Australia to be sold for digital dollars.

But even bitcoin enthusiasts are shocked by the offer, as the value of the currency fluctuates wildly.

The price of a single unit, which can be traded in online exchanges or “mined” through powerful computers that crack complex algorithms, has surged tenfold since the start of the year, hitting a high of more than $1000 late last year before falling heavily.

Bret Treasure of the Australian Web Industry Association and a board member of Bitcoin Australia, believes it’s the first bitcoin house sale in Australia.

“The seller obviously believes the value is going to appreciate because to mine that much bitcoin you would need a bloody supercomputer,” he said.

Mr Treasure’s son, Leo, 28, last year took out a $20,000 loan to buy bitcoins.

He now owns “a bit over 1000” bitcoins, worth about $750,000.

He is also importing Australia’s first bitcoin kiosks, which will allow people to exchange cash for bitcoin.

UWA Winthrop Professor of Economics Ken Clements said the bitcoin’s long-term viability would be determined by its rate of inflation.

“It’s uncertain what their supply is going to be in the future, so it’s uncertain what their value is going to be,” he said.

WHAT IS BITCOIN?

Bitcoin is a decentralised digital currency launched in 2009 by a programmer who goes under the pseudonym Satoshi Nakamoto. It can be exchanged through a peer-to-peer network without the need for a financial institution.

WHO ISSUES BITCOINS?

Bitcoins are not issued from a central bank in the same way as dollars are printed. Instead, the currency is awarded to users of Bitcoin software, known as miners. The miners use computers to perform complex calculations which are needed to confirm Bitcoin transactions.

HOW DO YOU BUY BITCOINS?

Bitcoins can be bought from currency exchanges for those who don’t have computer hardware to mine for the currency. These exchanges allow users to buy and sell bitcoins for other real world currencies.

WHAT ARE THEY WORTH?

Fuelled by speculators, the value of Bitcoin fluctuates wildly. In late November the price surged to more than $1000 (AUS) per Bitcoin, more than 10 times its value at the start of the year. As of Friday, a single Bitcoin cost about $750.

WHERE CAN YOU SPEND THEM?

Bitcoin can be used for private transactions between users, but many businesses are also adopting the currency.

 

Original article published at www.news.com.au  by Jennifer Gould Keil, News Limited Network 7/1/2014

Finance

APRA Moves to Scrap 7pc Loan Buffer

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APRA Moves to Scrap 7pc Loan Buffer

In a move that is most likely to benefit owner-occupiers and the wider property market, the Australian Prudential Regulation Authority is proposing the 7 per cent serviceability buffer on home loans be removed.

With housing prices continuing to fall sharply in Sydney and Melbourne, APRA’s unwinding of its restrictions is part of a coordinated action by the prudential regulator, central bank and government.

The decision, in the wake of the weekend’s federal election, will provide banks with credit growth and reduce pressure on margins by lessening the need for rate cuts.

This may be more good news for the banks, following their big rise in the markets on Monday, but the news could also have negative implications on Australian household debt levels.

The banking regulator said it was putting its 7 per cent minimum interest rate “floor” under review, because the policy may have reached its use-by date after reviewing its “appropriateness”.

APRA first introduced the serviceability guidance in December 2014 as part of its efforts to reinforce sound residential lending standards in an attempt to temper ballooning house prices and surging housing investor loan growth.

They required the banks to assess all home loans against a floor of 7 per cent or 2 per cent above the rate paid by the borrower, whichever was higher.

Banks have typically added a further 25 basis points to the 7 per cent threshold taking it to 7.25 per cent and a buffer of 2.25 per cent.

If the changes were to go ahead, authorised deposit-taking institutions (ADIs) would “be permitted to review and set their own minimum interest rate floor for use in serviceability assessments”.

“APRA introduced this guidance as part of a suite of measures designed to reinforce sound residential lending standards at a time of heightened risk,” APRA chairman Wayne Byres said.

“Although many of those risk factors remain – high house prices, low interest rates, high household debt, and subdued income growth – two more recent developments have led us to review the appropriateness of the interest rate floor.

“With interest rates at record lows, and likely to remain at historically low levels for some time, the gap between the 7 per cent floor and actual rates paid has become quite wide in some cases – possibly unnecessarily so.

“The changes, while likely to increase the maximum borrowing capacity for a given borrower, are not intended to signify any lessening in the importance that APRA places on the maintenance of sound lending standards.

“Rather, it is simply recognition that the current interest rate environment does not warrant a uniform mandated interest rate floor of 7 per cent across all products.”

The proposed revision comes as financial markets are anticipating the Reserve Bank will lower official interest rates to 1.25 per cent in the coming months.

In an attempt to rebound lending growth, APRA has been quick to support the banking sector, removing its 10 per cent growth cap on investor lending and 30 per cent limit on interest-only lending.

Lowering the floor could also provide some welcome support for the stricken housing market, following a 10 per cent slide in national house prices.

APRA has set a four-week consultation period on the proposals, closing on 18 June, but they are expected to be confirmed.

Source: brisbaneinvestor.com.au

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Aussie hotspots enjoying a sudden property boom

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Aussie hotspots enjoying a sudden property boom

Property prices across the country saw their steepest fall in 15 years in 2018, bringing them back to 2016 levels in what has been a housing downturn like no other.

But it’s not bad news everywhere – while investors shy away from Sydney and Melbourne, there are some hotspots which are enjoying a sudden property market boom, according to news.com.au.

Queensland

The South East and Gold Coast regions are seeing the most buying activity, with Brisbane, Moreton Bay, the Sunshine Coast and Ipswich booming along with the Gold Coast, Tugun and Burleigh Heads.

Tasmania

Unsurprisingly Hobart is the strongest property market, although activity has spread beyond the inner city and into the middle and outer rings, while Launceston has also recorded solid interest.

South Australia

The entire South Australian capital is booming, although most activity is happening in the inner city and Adelaide Hills.

New South Wales

While many investors have deserted Sydney, areas such as Paddington and Winston Hills and the nearby Central Coast are doing well.

Other booming areas are further north in Tweed Heads and Byron Bay.

View from the experts

Daniel Walsh of investment buyer’s agency Your Property Your Wealth, told news.com.au that investment activity has now firmly shifted to Queensland.

“We’re seeing rising demand particularly in the housing sector in southeast Queensland where yields are high and jobs are increasing due to the amount of government expenditure around infrastructure which is attracting families to the Sunshine State,” he said.

“With Brisbane’s population growth at 1.6 per cent and surrounding areas like Moreton Bay at 2.2 per cent, the Sunshine Coast at 2.7 per cent and Ipswich at 3.7 per cent, we are forecasting that Brisbane will be the standout performer over the next three to five years.”

Realestate.com.au chief economist Nerida Conisbee agreed, telling news.com.au Sydney investors especially had started to turn their attention north.

“Interest is strong in the Gold Coast across the board although there’s more action on the south side in places like Tugun and Burleigh Heads,” she said.

She added there was also a notable trend towards Tasmania, Adelaide and pockets of NSW such as Tweed Heads and Byron Bay.

Adelaide has also been flagged as finally booming after recently hitting the highest median house price ever recorded, largely driven by jobs and economic growth off the back of defence contracts, the announcement of the new Australian Space Agency and other investment in the area.

“Inner Adelaide, beachside and the Adelaide Hills tend to have the most activity but there’s also quite a lot of rental demand in low-cost suburbs so we’re expecting to see a bit more investment there in those really cheap suburbs over the next 12 months,” Conisbee said.

“There you can get houses for $250,000 so for an investor, it’s a relatively low cost in terms of outlay and the area is seeing really strong rental demand which means you’re more than likely to get tenants, so for investors it’s a really attractive area,” she said.

Source: brisbaneinvestor.com.au

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Why equity can help you buy again

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Why equity can help you buy again

Unlocking the equity in your home could help you purchase another. Chief executive of property advisory firm Property Mavens used her home’s equity to buy a Preston investment property. Picture: Lawrence Pinder

WE’VE all heard of the benefits of refinancing to get a better deal on your home loan, particularly a more competitive interest rate.

But what if refinancing could also help you buy an investment property?

“Borrowers may be able to refinance their existing home loan to access equity they may have built in their property, in order to buy an investment property,” Mortgage Choice chief executive Susan Mitchell said.

Refinancing with the aim of buying an investment property could allow borrowers to grow their wealth, according to Ms Mitchell, as, generally speaking, property was considered a safe asset class in Australia with decent returns over the long term.

“CoreLogic found that over the 10 years to June 2018, national dwelling values increased by over 40 per cent, a good return on investment,” she said.

But she cautioned there were a number of costs associated with refinancing, so it was important borrowers made an informed decision before jumping in.

Why equity can help you buy again
Leveraging your home’s equity could help you to buy another.

The nuts and bolts

So, how does refinancing using equity work?

The Successful Investor managing director Michael Sloan explained that lenders would typically lend you 80 per cent of the market value of your home, less the debt you still owed against it.

“This is your usable equity as banks hold some back as security,” he said.

“So, say, for example, you have a $500,000 property and a $200,000 loan. Your usable equity will be $200,000,” he said.

As to what value investment property you could buy, Mr Sloan said a simple rule of thumb was to multiply your usable equity by four.

“But remember that one of the risks of property investing is spending too much,” he said.

“You need to buy well below the median house price ($742,000 in Melbourne, according to CoreLogic), in fact you shouldn’t be within $200,000 of it.”

Ms Mitchell said the figure depended on how much a lender determined a borrower could afford to repay.

“Available equity is important but the key factor a lender needs to consider is how much a borrower can afford,” she said.

“If a borrower does not have additional capacity to repay a proposed new loan, they may not be able to borrow, irrespective of how much equity they may hold,” she said.

Why equity can help you buy again
Consulting an independent broker may be helpful for would-be investors.

Where do I sign?

And there’s the rub: having equity in your home is not a guarantee you’ll be able to access it.

“You can have a million dollars of equity but if you don’t satisfy the institution’s lending criteria, they are not going to loan you any money,” Mr Sloan said.

“The bottom line is they will take everything into consideration: for example, how many children you have, as the more you have the less you can borrow, your work situation and how much you spend on everything from your daily coffee to the tyres on your car.”

Lenders have also tightened their assessment procedures as a result of recent regulatory measures, such as The Australian Prudential Regulation Authority (APRA) imposing a 10 per cent benchmark in growth on investment lending last year.

This was introduced in a bid to curb activity in the housing market, Ms Mitchell said.

“These regulatory measures have resulted in lenders increasing their scrutiny of a borrower’s ability to service a loan,” she said.

“When deciding if an applicant can afford a mortgage, a lender will consider a borrower’s available ongoing income and from this allow for existing debt commitments and living expenses,” she said.

“Their decision will also factor in a buffer for potential increases in interest rates.”

But it’s not all doom and gloom. Ms Mitchell advised that borrowers could overcome the increased scrutiny by getting “financially fit”.

“Get out of debt, spend your money wisely and adopt a disciplined savings strategy to show lenders you can service a loan,” she said.

Air Mutual director Damien Lawler advised would-be investors to consult an independent broker who could access a range of lenders, which might have varying assessment procedures.

“Everyone is talking about the banks tightening up – which they are – but there are banks, particularly the smaller, tier-two banks, who are still lending,” he said.

Why equity can help you buy again
Getting the right structure for your loan is essential.

And finally …

Mr Sloan said his No.1 piece of advice for would-be property investors was to play it safe and to have some funds in reserve if things go wrong.

“You should never buy (another) property if you have no extra money available to you after you settle, so you need to have a buffer. And protect what you are building with income protection and life insurance, if you have a partner,” he said.

Source: brisbaneinvestor.com.au

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