I hope we’re all enjoying lockdown number five, I know I’m not.
If you haven’t noticed, and you’re a regular watcher of these updates, I’m playing around with some of the editing. I know. Money is quite boring. So I’m just going to try and jazz it up a little bit. Please bear with me, I’ve not got the best editing skills. But yeah, feedback would be appreciated.
So I want to chat about refinancing in the market because some things have changed there. I want to chat about the new first home loan deposit scheme, which is not new it’s the reiteration of it. Because it does mean, if you’re a first time buyer, you’re potentially getting in a lot quicker.
But it also does some things to the market. I want to chat about what’s actually happening in the market. Obviously, it’s still going gangbusters. But there’s been a slight change in the in the recent weeks.
And finally, I want to chat on the broader economy and talk to you about what old old Klaus Schwab and he’s mate’s have been up to. So let’s get into it.
Refinancing on the up
So in home loans, refinancing is on the increase. This is something I wanted to show people but what a lot of people don’t get is that the kind of consensus, I guess you could say on the news is that rates are going up, interest rates are going up, which isn’t 100%, right.
If you look at the treasury bonds for the US, they’ve actually been decreasing probably in the last few months. And that decreasing in bond rates has basically kind of come over to home loan rates. And now there’s a number of lenders that have actually reduced their variable rates.
I’m actually saving quite a lot of clients that can refinance and save quite a bit. So there is opportunity there for you to potentially refinance to a smaller lender. Because generally, it’s not the big four, but it is the smaller lenders, and I’m finding, you know, your average home loan, you might be able to save a couple of grand.
First Home Owner Schemes
Moving on to the first home loan deposit scheme. Yeah, the new iteration of the first home loan deposit scheme came out on July 1. And it’s the first home loan deposit scheme, plus the new home guarantee, which has already been in so there’s another scheme for building a new home.
And there’s also the the family homestead – I don’t even know what it’s called, it’s the one where you if you’re a single parent, and you can, you can afford the loan, the government will let you get in off a 2% deposit.
Which is crazy talk. But that’s, that’s, that’s what’s happening. So don’t know too many single parents that could earn the income to buy a house. But we will see what becomes of that.
Next with the property market news, I’m noticing more supply coming into the market. Having said that, it’s not as if the market has oversupply it’s just that before, say six months ago, there was literally no supply on the market.
And that was basically because we had a six month lockdown, everyone came out and went crazy and bought all the houses. And now that pent up demand from six months ago is is coming back to normal.
Having said that, if we go into another extended lockdown, then we may get the same sort of result happening. That’s probably got a bit of play out yet. So wait and see there.
I just want to show you this graphic which is from realestate.com.au which kind of shows you what the searching volume was the last 12 months. So you can so you can see as of March 2021 property searches were at an all time high. And you can see interestingly, if you look back at towards the start of the lock downs 2020 it was basically down 20% year on year so fell through the floor.
And yeah, kind of right at the zennith, you could say in March of this year, and since then the amount of searching for property has started falling a fair bit. So back towards normal levels still ahead of last year, but obviously last year, we were in lockdown here in Melbourne, actually, I think July, we’re just going back down into lockdown, two or three, I can’t remember.
But that gives you some idea of the demand. So the demand starting to fall off. But overall, I would say that we still want more demand and supply. So if you’re out there waiting to buy a property, because you think it’s going to go down. Good luck. I disagree with you.
Negative Interest Rates
Now onto the broader economy. I want to get onto negative interest rates which are still on the table. I just want to show you this paper here from APRA. And basically, it’s a letter to all of the banks saying that you guys need to have your systems and processes set up for negative interest rates.
I wanted to show you this because the narrative in the media is, oh, we better fear inflation. And the interest rates are going to go up because of that. Now, I’m not saying that’s not a possibility, indeed, inflation is what we’re getting in asset prices. But we also need to be aware that there are other possibilities that are on the table, and that is negative interest rates.
Old mate Hans
The other thing I want to chat to you about is on my Hans, Rob, what is, what is his name? Klaus Schwab? Klaus Schwab…..Hans Klaus, same difference. I wanted to talk about Hans, Klaus, I wanted to talk about Klaus Schwab, who is Klaus Schwab, he is basically the person who made the World Economic Forum.
The World Economic Forumis a network of businesses. But these businesses are the very top of the world. So they have that, that thing in Davos every year, where all the rich people come out, and the last kind of 15 years, all the world leaders have started attending it.
So basically, Hans, swings a lot of power in the world. And he’s recently coming out with a book, basically called The Great Reset. So him and his mates understand that the finance system that we run, is, is dying. And it’s probably on its last legs when I say last legs, maybe 10 years.
He wants to re set the world finances. And one of his quotes is “you own nothing and you will be happy”. This is by about 2030.
And why I am I saying is because this is important for everyone to understand how volatile this decade is going to be. These guys literally pull the strings on how economic system works. And they want to basically own anything. You got to remember, when they say you will own nothing, you will own nothing. It basically means you is poor people, that’s all of us. They’re going to own everything.
So I think paying attention to your finances is going to be very important in this decade.
So what’s the bottom line here?
I think you have to take responsibility for your finances, because this decade is going to be so volatile. And if you get the end, if you get caught on the wrong side of the volatility, it might wipe you out for decades.
So this is the main point of me doing this economic stuff because I can see a lot of people, I see everyone’s finances, I know the positions people are in. And all I’m saying is you need to prepare better. Most of you anyway, need to prepare better.
And this is my way of getting any out there.
I hope you guys get something out of it. And I hope it gives you some food for thought. If you’ve got any questions, you know, I’m always available. You can leave them in the comment section or you can just give me a buzz. have a chat. If you need any home loan stuff done, same thing, give us a buzz and I will sort it as per week per usual