Investment Perth

Reporter: Andrea Burns

When that bubble will burst is anyone's guess but I wouldn't expect it's going to burst any time soon. Nick says “West Australian property prices continue to surge and if you compare it to the rest of the country , we're marching on stronger than ever it seems” Want to know why your house has probably doubled in value in the past few years? cos eastern staters want to buy it. “There's been a lot of people, especially investors moving to WA to invest in property”

A boom in resources.. an economy powering the rest of the country.. lending for investor housing in WA jumped a staggering sixty one per cent in just the first five months of this year. “61% growth rate is phenomenal” says Garfield Wright - analyst with consumer finance research firm, Cannex. “Property investors especially moving out of areas like Melbourne and Sydney and taking their resources to Perth” Demand's up, prices too, the competition to buy is fierce. But even with all those players in the market, Garfield says you can get a good deal on a mortgage, IF you know exactly what features you want in a loan. “Redraw facility, whether or not you can make extra repayments on the loan , if you can make extra drawdowns , if you can split the loan between a fixed portion and a variable portion”

Cannex crunched the numbers... giving star ratings to mortgages on offer across the country, that are available in WA. When it came to the cheapest variable rates, taking into account the interest rate as well as charges, their five star performers included the Wizard Home loans rate breaker loan... A_M_O'S, Group Rate saver home loan...RESI Mortgage Corp'S Great Rate Home Loan... AIMS Home Loans -Super Rate Variable and Advantage Finance'S Choices Rate Reducer loan.

FIVE STAR PERFORMERS - VARIABLE RATES

Wizard Home Loans - Rate Breaker Loan

AMO - Group Rate Saver Home Loan

RESI Mortgage Corp - Great Rate Home Loan

AIMS Home Loans - Super Rate Variable

Advantage Finance - Choices Rate Reducer

source - www.cannex.com.au

Nick Bruining says “it has been extraordinary and it's terrific if you're an investor the fact that house prices have gone up so spectacularly in the past few years or so but to think that that this thing can march on sans any cap is where we start to see some problems” Despite the boom, financial planner Nick Bruining urges caution, “the hype is now that great that people are starting to lose sight of those fundamental calculations - what rent am I going to get on my investment property, what's going to cause it to keep going up you see we need to have sound reasons why things go up in value, not just because” Mums and dads are just some of the people who've borrowed four point one billion dollars so far this year to buy WA property. We've already had one rate jump -Nick says if another would leave you short - act now.Nick says “if you think you're vulnerable if interest rates rise, find out what those fixed rates are , look at locking them in for 3 or 5 years”

FIVE STAR PERFORMERS - FIXED LOANS

Rate Busters - 1 year fixed

Sapphire Mortgage Service - classic 2 year fixed

Advantage Finance - standard 1 year fixed

Home Path - 2 year fixed owner/occupier

Resident Home loans - I year fixed owner occupier

source - www.cannex.com.au

For fixed loans, the mortgages CANNEX found cheapest.

Rate Busters' one year fixed... Sapphire Mortgage Service - classic 2 year fixed...Advantage Finance's standard 1 year fixed

Home Path's two year fixed for owner occupiers and Resident Home loans' I year fixed - also for owner occupiers.

Garfield says “spend as much time looking for the home loan as looking for the home itself” Just as you wouldn't buy a truck when you need a motorbike, Garfield Wright says know exactly what all the bells and whistles of your mortgage are, before you agree to pay for them. He has some advice for every buyer, “it pays off doing a lot of homework”

INVESTOR

Check out "interest only loans" -

fix for up to 10 years.

If you're an investor - interest only loans are attractive, which some lenders let you fix for up to 10 years.

OWNER OCCUPIER

Don't pay for extras you won't use

example - offset account

Owner occcupiers, that's most of us look at the extras carefully, such as the offset account. it may not suit you, so don't pay for it.

FIRST HOME BUYERS

Cheapest is best

First home buyers, when every dollar has to work hard, the cheapest loan you can find is the one for you and forget about the bells and whistles. “You have to know what it is you want, you have to know what your strategy is for paying off this property and once you know that it'll be a lot easier for you to know what to look for”

Experts can't say when the property bubble will burst, but they do agree it's cyclical and the good times won't last. Nick says “I'm just concerned that there's are folks out there thinking they can buy today, thinking they can make a quick buck and sell out by the end of the year , that's not how it works property is a long term investment”