"Brisbane, Mortgage insurers & Valuers"

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From: Brett Burt


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After a number of enquiries regarding mortgage insurance I have formed =the view that the 'true power' resides with them.

Last week my brother was reduced to applying for max LVR 80% (not =90-95%) as the mortgage insurers (Gemico) thought that the security, =house in Dubbo and a unit in Cooparoo in Brisbane were poor markets =where the likelihood of appreciation was slight, and the likelihood of =going backwards was on the cards. Unbelievable. Or do they know =something that we/I don't about Brisbane property markets? I have been a =supporter of Brisbane property over the last 5 lean years (compared to =Sydney) but I am slowly starting to feel that it is a basket case. In =addition the valuers are even saying Brisbane is not going anywhere. =This reflected in a few valuations we had which showed that the =properties had appreciated less than 2% p.a in last 5 years. (Two tiered =marketing did not play a role here as the original valuations were =independent and reasonably close to sale price.)

Do we sell the Brisbane investments, they don't seem to be going =anywhere and having them hurts our chances with mortgage insurers =(apparently).

Any thoughts on mortgage insurers and Brisbane property ?

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After a number of enquiries regarding mortgage =insurance I
have formed the view that the 'true power' resides with them. =

Last week my brother was reduced to applying for max =LVR 80%
(not 90-95%) as the mortgage insurers (Gemico) thought that the =security, house
in Dubbo anda unit in Cooparoo in Brisbane were poor markets where =the
likelihood of appreciation was slight, and the likelihood of going =backwards
wason the cards. Unbelievable. Or do they know something that we/I =don't
about Brisbane property markets?I have been a supporter of =Brisbane
property over the last 5 lean years (compared to Sydney) but I am slowly =
starting to feel that it is a basket case. In addition the valuers =are
evensaying Brisbane is not going anywhere.This reflected in =a few
valuations we had which showed that the properties had appreciated less =than 2%
p.a in last 5 years. (Two tiered marketing did not play a role here as =the
original valuationswere independent and reasonably close to sale
price.)

Do we sell the Brisbane investments, they don't seem =to be
going anywhere and having them hurts our chances with mortgage insurers
(apparently).

Any thoughts on mortgage insurers and Brisbane =property
?

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Reply: 1
From: Rolf Latham


Hi Brett

Mortgage Insurers are a funny lot. Its almost like yes, we will insure your car, providing you dont drive it out of the garage.

If its a strong deal try Homeside through a broker you may get 85 to 90 % without LMI.

95 is ALWAYS a big ask, especially in regional areas.

Ta
Rolf

Rolf
 
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Reply: 2
From: Denise Macadam


Hello Brett,

Sorry to hear of your situation - Gosh don't give up on Brissy housing,but i think now more than ever, Location -Location _Location.Cooparoo is flooded with Units I feel that is where the problem lies.
If you had a house instead, you would have been in a much better position.
I live and invest on my side of town - Hawthorne, Bulimba, Balmoral - 10% increase in this area within the last 12 months.and I will always stick to house vs units etc.
My husband sells in this area and they have the Market share - prices have been amazing, he said it appears to be stabilizing somewhat,now. The high middle prices were walking out the door a few weeks ago and have just now slowed - Good Luck Brett,
I wish you well
Denise
 
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re Brisbane

Reply: 2.1
From: Brett Burt


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Still cannot get over the mortgage insurers (GEMICO) stating that =Brisbane in their view is a no go area ! These guys are the ones that =decide whether or not you get a loan off the lender ! So if they are =saying that, it really does hurt valuations. Thanks for the information, =but even though you and hubby believe Bulimba etc have appreciated by =10% in 12 months, try selling one of your properties for 10 % more. You =may be (unpleasantly) surprised. Regards Brett

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Still cannot get over the mortgage insurers (GEMICO) =stating
that Brisbane in their view is a no go area ! These guys are the =ones that
decide whether or not you get a loan off the lender ! So if they are =saying
that, it really does hurt valuations. Thanks for the information, but =even
though you and hubby believe Bulimba etc have appreciated by 10% in 12 =months,
try selling one of your properties for 10 % more. You may be =(unpleasantly)
surprised. Regards Brett

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re Brisbane

Reply: 2.1.1
From: Denise Macadam


Hello Brett,

Yes I still believe Brisbane house prices have been great (Balmoral, Hawthorne, Bulimba)- houses under $300,000. are still walking out the door for the asking price or a bit more.More than that and it has slowed a bit, buyers are taking a wait and see approach for the higher priced homes.
Example, Balmoral 20 perches two bedroom Queenslander - bought June 2000 $180,000. one "cheap Barrys" kitchen installed - sold Oct 2001 $280,000. One new replica Queenslander 20 perches off Oxford Street, bought $300,000. sold exactly 12 months later nothing spent on it $400,000.
My own residence in Hawthorne - 12 months ago bank valuation for $280,00.00, bank valuation 5 weeks ago for $340,000 to $350,000 was what he said he would put in writing for the bank, but told me on the "real market" $360,000 - $370,000. (one $6,000.00 paint job)Borrowed 110% against it for another IP
So i still have a lot of faith in these areas, I feel Brisbane is so different to other states it does make it hard to pick. in other states you have your up market areas and they are obvious,the prices within these areas are generally similar dependant on house style etc etc- in Brissy you have a great area with great prices and then you have "pockets" of low value housing contained within that high priced area - it is a bit of a challenge that is for sure.
I will be interested to hear what you do with your Brissy Ip.
Good Luck,
Regards Denise
 
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