A Basic Guide To Home Contents Insurance

/0 Comments/in , , , , , /by

Basically, home contents insurance is insurance protection against the replacement cost that you would otherwise have to pay to replace the contents of your home in the event of then being lost, damaged or stolen. As is the case with home buildings insurance, the main factors contributing to grounds under which you can make a claim against your home contents insurance include theft/burglary, damage due to floods, burst water pipes or boilers, etc.

There are, however, two very important factors that you need to keep in mind when insuring the contents of your home:

First, in the case of home contents insurance, it is rarely the case that your mortgage provider is going to insist that you have this type of insurance as part of your mortgage agreement;

Second, regardless of whether you own or rent the property you are currently living in, you should still be looking to insure the contents of your home – as these are your personal possessions.

Two further aspects of home contents insurance also need to be considered carefully when you are checking out the different kinds of policies on offer. In some, but not all, cases you can be insured for your home contents even when the items listed in your home contents insurance policy are not actually physically located on the home ‘property’. So, for example,

First, it is possible to claim when you are transporting items from one place to another and they are stolen.

Second, home contents insurance is insurance against the replacement cost of the item being insured.
It does not, nor is it intended to, insure you against the nostalgic value of the item damaged/lost. So, for example, if you insure a picture your deceased grandmother gave you, which would cost £20 to replace, it makes little difference that it was your deceased grandmother who gave it to you and that it cannot, therefore, be replaced.

Although home contents insurance is, in all but a few very rare circumstances, a completely voluntary scheme of insurance to subscribe to, if you are in any doubt as to the value of this insurance scheme, take a quick mental inventory of the contents on your home and their value and then get a few quotes off the internet and you’ll soon be seeing the value of having your home contents properly insured.

 

KENWICK REAL ESTATE

FRIENDLY INSURANCE BROKER

Auto Insurance Tips

/0 Comments/in , , , , /by

1> Raising your deductible
Deductible is the amount you pay from your pocket before making an insurance claim. The disadvantage of raising your claim is when you make a claim, you will pay more. However, if you are a safe driver, you will overtime save more money by raising your insurance deductible. Look at your previous insurance claim history and make a discreet decision for yourself.

2> Older Auto – Drop comprehensive / collision coverage.
If your car is not worth much, why pay for comprehensive and collision insurance coverage. You can visit a myriad of online sites to find true worth of your car. Additionally your insurance broker might be able to pull up the true worth of your vehicle.

3> Taking advantage of low mileage
Some auto insurance companies will give discounts if you drive less than a certain number of miles or drive less than a certain distance to work.

4> Moving – Consider insurance costs.
If you are considering moving, it will be a good idea to call your insurance agent and get his opinion on the insurance costs in the new city or state.

5> Low profile vehicle
Your vehicle will also determine your overall insurance costs. Some of the cars are favorite for thieves since they fetch a good price. Some cars are more expensive to repair. It makes a lot of sense to do adequate amount of research before you make your auto purchase.

6> Make sure your vehicle is correctly listed by your insurance agent.
Many manufacturers offer somewhat similar model names for vehicles but insurance costs may vary. Additionally 2 or 4 door or the wrong model can impact your auto insurance quote.

7> Have your insurance broker check other insurance company discounts.
A lot of companies will offer discounts if you and your spouse are insured with the same insurance company. Additionally, if you seek home insurance, life insurance, auto insurance from the same insurance company, you will get some discounts. Check with your insurance agent on saving money.

TRUSTED INSURANCE BROKER

Australia Clocks Fastest Value Decline In A Decade

/0 Comments/in , , , , , , /by

2018 was an underwhelming year for the Australia housing market as values fell at the fastest rate since the global financial crisis in 2008.

The CoreLogic December home value index results showed that the downturn in Australian housing conditions accelerated through last year, recording a 4.8% decline. The drop was driven by the weakness in most capital cities, particularly Sydney and Melbourne.   Sydney led the yearly drop in home values, recording an 8.9% decline. This was followed by the downtrend in Melbourne (7%), Perth (4.7%), and Darwin (1.5%). While Sydney and Melbourne recorded the weakest conditions, the peak-to-current declines were much less severe relative to Perth and Darwin, where values have been falling since mid-2014.

While other capital cities recorded improvement, conditions were not as strong in 2017. This shows that the housing slowdown goes beyond Sydney and Melbourne, according to Tim Lawless, CoreLogic head of research.urne. “Although Australia’s two largest cities are the primary drivers for the weaker national reading, most regions around the country have reacted to tighter credit conditions by recording weaker housing market results relative to 2017,” he said.

 

 

Melbourne To Take Sydney’s Place As Major Housing Market Drag

/0 Comments/in , , , , , /by

The deterioration of Sydney’s housing market will likely continue to affect Australia’s overall property scene this year, but according to some industry analysts, the city will not be much of a drag as it had been before. Instead, they predict that Melbourne will take Sydney’s place as the major housing market burden.

On the other hand, dwelling values in Sydney are expected to decline by 3.3%, but the rate of decline would not be similar across housing categories. Moody’s Analytics economist Katrina Ell told The Daily Telegraph that detached house prices are expected to record higher price declines, as they saw faster growth in recent years.

On the other hand, the unit market is expected to become a bright spot as it rebounds with modest growth this year.  Moody’s Analytics also anticipates that value in Perth will decline by as much as 2.8% this year. In contrast, dwelling values in Brisbane and Adelaide are calculated to grow by of 1.2% and 2.6%, respectively.

Overall, the housing market downturn is set to persist over the following months, which Ell said could have implications for the wider economy.

“Given that most of the household wealth is in the relatively illiquid asset of housing, there would be greater systematic implications if debt repayment difficulties suddenly become a broader concern. If unemployment were to rise, it would force many households to sell at once,” she said.

 

TRUSTED REAL ESTATE AGENT

LOCAL MORTGAGE BROKER

REAL ESTATE NEWS

Why Some Say Turning The Debt Taps Back On Is Irresponsible

/0 Comments/in , , , , , , /by

Treasurer Josh Frydenberg welcomed the New Year by urging banks to continue approving housing loans in a bid to drive the Australian economy — a thing that, according to some market watchers, is very irresponsible to say.

Speaking in regional Victoria last week, Frydenberg told banks to keep their books open and to approve more home loan applications. “You have a social and economic responsibility to ensure affordable and accessible and timely loans to the broader public. It’s in the banks’ interests, it’s in the economy’s interests, and it’s certainly in the public’s interests,” the treasurer said.

These sentiments followed the release of the CoreLogic December home value index, which showed a 2.3% quarterly decline, the worst since 2008.

After more than a year of mortgage lenders tightening their lending screws in compliance with regulations, housing credit has slowed significantly. In fact, official figures show that credit growth moderated to 4.9% in November last year, well below the 10-year average of 6.3%. North said that allowing banks to lend more would not do any good, as home prices relative to income are significantly higher than in most other countries around the world.

“We have more than a million households with a mortgage who are struggling to make mortgage repayments today. We don’t want to stoke that fire more,” he said.  He added that it is only appropriate for banks to keep their lending standards tight and focus on the capacity of the borrowers to make repayments in assessing applications.

“Our analysis shows that around 40% of loan applications are now being rejected, compared with 5% a year ago, because people don’t actually meet the lending criteria,” he said.

Do High Rental Yields Always Translate to High Returns?

/0 Comments/in , , , , , , /by

When it comes to property investing, getting higher rental yields and achieving higher returns are the ultimate goals. However, new research shows that the former does not necessarily result in the latter.

According to a report by RiskWise Property Research, which analysed five-year trends across Australia’s housing market, higher rental yields do not automatically translate to high overall returns for investors. In fact, while properties in cheaper areas were able to give investors a steady stream of income in the short term, they resulted in lower overall returns in the medium to longer term. Closely looking at it, it does not seem surprising as home values in cheaper markets take more time to appreciate.

RiskWise chief executive Doron Peleg told The New Daily that low-rent houses would be able to realize a 63.1% increase in net equity assuming a 20% deposit. On the other hand, high-return homes would be able to clock only a 29.5% increase. This means that low-rent dwellings were able to improve their values by more than twice that of the high-rent ones.

“When you break down properties with high rental returns and low rental returns, you see purchasing the high rental returns is extremely affordable, whereas a low-rental-return dwelling costs roughly three times more, which generally means they are blue chip,” he said.

This also means, as Peleg puts it, that while many properties can “pretty much pay for themselves,” investors might be missing significant overall returns in the long run.

 

LOCAL REAL ESTATE AGENT

RELIABLE MORTGAGE BROKER

Is the Great Australian Dream a thing of the past?

/0 Comments/in , , , , , /by

Perhaps due to the current conditions of the housing market, many Australians think the Great Australian Dream of owning a home is a thing of the past.

A new survey by Real Insurance found that two-thirds of Aussies would rather have freedom and flexibility in life over the commitment of saving for a home. Nine in 10 respondents said that achieving happiness in life is more important than having accomplished the traditional Australian dream of owning a home

“So, it seems that putting happiness, including travel and freedom, above anything else in life is the new Australian Dream. There’s nothing more important in life, after all, and reiterates how adaptable and resilient us Aussies are when faced with a challenge,” Real Insurance said. While 70% still think it is important to personally own a home in the future, three in five prospective homebuyers might find it hard to do so, as they are locked out of the property market.

The study also found that for those who are saving for a home, clothing, hobbies, tech gadgets, and eating out are some of the most common things they spend less on. “Our research shows that us Aussies are a resilient bunch who love a bodacious dream to aim for in life. So, we’re adapting our dream to meet a more realistic reality in the face of high property prices,” the study said.

Watch Out For These 4 Housing Market Scenarios This Year

/0 Comments/in , , , , , , /by

They say the New Year brings an opportunity for things to improve, but market watchers are not getting their hopes up for Australia’s housing market as conditions remain dire.

In a market forecast, CoreLogic head of research Tim Lawless said there are four scenarios that are likely to play out over the course of 2019, with the general downturn still continuing throughout the year.

The housing downturn in Sydney and Melbourne will continue to be the main culprit of the housing downturn. On the other hand, while other capital cities are expected to lose some momentum, they are likely to witness positive growth in nominal terms. “There will be a few exceptions: with the improving trend in Darwin, it looks likely the top end market will continue what is likely to be a long and gradual recovery in 2019, while the Perth market could also move back into positive growth territory through the year,” Lawless said.

On the home loan front, tight credit conditions are expected to persist, limiting housing market activity to below-average levels. The unfavourable lending environment will also discourage potential homebuyers from breaking into the market. The strict lending conditions will also have a negative spillover into consumer sentiment, which is already projected to weaken as Australia approaches a federal election.

The third likely scenario is the continued downturn in the new unit market, particularly in Sydney and Melbourne. This is due to weaker conditions across the two markets brought about by slowing migration rates from both overseas and interstate, fewer domestic and overseas investors, low valuations for off-the-plan unit settlements and overall tougher lending conditions.

Despite these discouraging market projections, one part of the market is likely to buck the trend. Lawless said lifestyle markets along the coastline and hinterland locations adjacent to the major capitals will remain a bright spot in the market as they continue to see strong demand from a variety of market segments.

While growth conditions will not be as stellar as last year, values are expected to trend higher throughout 2019.

Western Australia’s mortgage ‘delinquents’: The stories behind the stats

/1 Comment/in , , , , , , /by

Ms Meerman’s team of three counsellors based at Midlas in the Midland CBD helped Perth’s north-east deal with more than $50 million worth of debt last financial year. In the past six months, half of their clients were having issues paying off their mortgage. Mortgage delinquency occurs when someone falls more than 30 days behind on their home loan repayments.

Despite slight improvements on delinquency rates across the country and in WA, it remains a rampant issue. Recent figures from Commonwealth Bank suggest more than 1.5 per cent of its WA customers were in arrears on their home loan, second only to the Northern Territory.

Moody’s April 2018 mortgage delinquency map showed four of Australia’s worst performing regions were in WA: the WA outback, the Wheatbelt, Mandurah and Perth’s north east, which includes Midland. While the numbers paint a concerning picture, behind them are thousands of families who have experienced job losses or sickness, which is causing huge financial strain and serious mental health issues.

 

“It is really sad and most of these clients coming into me, they’re in their 50s or early 60s, they have worked their whole life, they’ve never been out of a job this long.

“It’s about their identity as a person and they feel like they’re failures. They’re facing bankruptcy, they’re at the end of their life with nothing to show for a lifetime of work.”

Ms Meerman said these clients usually had great payment histories on their home loan and it was frustrating for her to see banks pursuing them relentlessly after missing payments.

 Construction woes trickle down to families

Waikiki resident Samantha*, her husband and teenage daughter are healthy but they were affected by the ailing WA construction industry.

Her husband lost his job in April for three months, which was a huge blow to the family income.

“It wasn’t his choice to lose the job … he works with timber and that feeds the building industry and when that collapsed his company started retrenching people, he was sort of the last one on so the first one to go,” she said. The family’s mental health was strained from the financial stress coupled with the often crushing nature of job hunting her husband was going through.

“I think (my husband) applied for over 100 jobs. He would go for interviews, sometimes three at the same place and not hear anything.

“It got to the stage where he would’ve gotten a job in Welshpool, and travelled three hours a day just to have a job to pay the bills.

With the help of a financial counsellor both Samantha and Adam were able to get the bank off their backs and navigate their ways out of financial strife in ways they would have never thought of themselves.

Ms Meerman said falling behind on mortgage payments was a complex and stressful time, which is why the free service the financial counsellors network provides was so important.

She said the first thing they asked was whether the lack of income was because of illness or injury.

“If that’s the case you want to get onto your insurances ASAP. Not just insurances you know you’re paying for but the ones you might not know you have on your loans and with your super.

“Some people are insured for quite a lot of money through their super. They can pay out their house.

“I have seen people lose their house when they could have actually paid it out.”

Visit financialcounsellors.org for more information.

LOCAL MORTGAGE BROKERS

 

 

Amid an epidemic of mortgage stress, a perfect financial storm is on the way

/1 Comment/in , , , , , /by

Homeowners, particularly in the mining states of WA and Queensland, are already grappling with a number of factors including unemployment, under-employment, stagnant wages growth and weak house prices.

Another looming threat is rising interest rates, with three of the four major banks raising variable home loan rates earlier this year independent of the Reserve Bank of Australia.

Andrew and Rachel Hayden built their dream home in Perth’s south-eastern fringe three years ago, but they are expecting a mortgage default notice from their bank within a month.

“We put probably $600,000 into it and [are] probably going to sell it for $480,000 — shocking,” Andrew Hayden said

He said he wanted to unlock his superannuation to pay his mortgage but couldn’t until the bank served him a default notice.

The couple’s financial problems began when Rachel Hayden fell ill 18 months ago.

The mother of five was forced to stop work and Mr Hayden had to shut down his business to care for her.

“[I feel] absolutely gutted,” she said. “You do everything by the book, everything. Gutted for the kids, they don’t do sports or anything and haven’t because you just can’t afford to.

“It took us so long to get here and we thought yes, no wasted rent money or anything like that

A perfect storm of rising mortgage costs

Credit Ratings agency Moody’s has predicted the situation will worsen as a growing number of interest only loans convert to principal and interest, adding about 30 per cent to monthly fees based on current interest rates

About 40 per cent of all mortgages funded by banks during 2014 and 2015 were interest only, and many of them included clauses which stipulated homeowners would have to start paying principal payments after five years.

Throw into the mix flat wages growth nationally, underemployment on the east coast and stubbornly high unemployment in the west, and according to Keith John, founder of Pioneer Credit — which buys debt off the banks once people default on their loans — you have a perfect storm.

“A perfect storm in the sense of, and I think we’re seeing it play out now, really low retail sales and a general lack of consumer appetite, and … people are desirous to paying down debt but don’t have the capacity that they did a year ago, or two or three years ago,” he said.

 

LOCAL RELIABLE BROKERS

FRIENDLY PROPERTY MANAGEMENT COMPANY