Preparation Protects from Property Pullback Predictions

Thursday, October 22, 2015

Market forces drive the value of property. You control the value of your debt. In uncertain times Matt Clayton, IMFG Mortgage Specialist, suggests focusing on what you can control. Prior preparation is key.

Is the run in property over? Focus on what you can control.

Home owners and property investors have experienced high capital growth in recent years - particularly property owners in Sydney and Melbourne.

Some pundits are now predicting property prices are due for a slow down. Macquarie Bank speculate that house prices will fall 7.5% from March 2016. Some economists believe this may trigger a recession. In fact Goldman Sachs believe the chance of recession is 1 in 3.¹ The attached article, and others like it, discuss the potential risks in the changing values of property.

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Whilst a period of slow growth in property values is possible, and may be troubling for some, we are more concerned about your cashflow and how you manage your debt.

"The best preparation for tomorrow is to do today's work superbly" William Osler

In our experience it pays to review loan facilities before a recession and before lenders tighten their lending rules. We are already seeing lenders, with some prompting from APRA and the RBA, beginning to tighten their credit criteria. If Australia does experience a recession or a property slump in the near future, it will pay to review your existing loan arrangements sooner rather than later. This is also the time for those who want to get their financial house in order should you want to take advantage of a potential future downturn.

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The market and the economy will determine the value of your property. Only you can determine how long you are constrained by your debt. To that end, we believe there is no better time than now to review your loan structure.
 
ABOUT THE AUTHOR:

Matt Clayton is a professional Mortgage Broker for successful people and their families in the Sydney area.  Would you like to reduce your debt sooner? Are you interested in preparing  yourself to take advantage of a downturn? Ask us about our Complimentary Second Opinion Service.

IMFG is a financial services business with a difference. Our clients are supported by a team of specialists, not generalists. We believe that the most successful people have their financial house organised within an elegantly simply framework aligned with their dreams, vision, values and goals.

  1. Goldman Sachs Australia research note dated 11 September 2015
  2. Source: Barclays Research as outlined in The Australian
  3. Source: JCP Investment Partners 

This article is intended to provide general information only and has been prepared without taking into account any particular person's objectives, financial situation or needs. Persons should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend persons obtain financial advice specific to their situation before making any decision regarding a financial product or decision.

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Identity McIntyre Pty Ltd and its specialist financial advisers Angus Dockrill, Scott Douglas, Dan Blatch, Lisette Walsh and Matthew Bull are authorised representatives of Apogee Financial Planning Limited, Australian Financial Services Licensee Registered Office at: Level 8, 171 Clarence Street, Sydney NSW 2000. These representatives are trading as IMFG.

Lending Corp Pty Ltd and Matt Clayton are authorised credit representatives of Loan Market Pty Ltd, Australian Credit Licence 390222 Registered Office at: Level 26,111 Eagle Street, Brisbane QLD 4000. These representatives are trading as IMFG Mortgages

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