Monday, October 31, 2011

Weekly Wrap up - Get up to speed, Valuers!

We are spending an extraordinary amount of time working with Valuers on sale prices for properties.
When you buy, the amount you can borrow against a property is determined mainly by two things. Your capacity to pay (usually a maximum of 30% of your gross income for ALL debt based repayments - including credit cards, car loans etc) and the valuation of the property (a maximum LVR - Loan to Value Ratio of 80% - 90%). The rush by First Home Buyers has caught a lot by surprise. Not the least of whom are the Valuers. We now have two sales by genuine buyers competing with others being threatened by valuers. Based on the feedback from the valuers, I suspect you will see a lot more before they 'get up to speed'. I'm not sure what extra evidence they need. The market has moved up in the last month for properties under $400k. No question. Like a lot of forensic reviewers, the valuers react AFTER the fact. Lets hope its not too late for First Home Buyers to benefit from no stamp duty.
Auction results: Sydney 54% with Melbourne 48%
As I write this, the Melbourne Cup has been run and won and the RBA has dropped official interest rates by 0.25%.
The retailers are doing it tough and Australians are hanging onto their money to pay out debt. Lets hope this move by the Reserve Bank will tempt some to spend for Christmas.
Quote for the week:
If we did the things we are capable of, we would astound ourselves.- Thomas Alva Edison

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