The Real Estate Blog of Mr Mark Forytarz

Yellow Brick Road, an emerging non-bank lender, has taken its fight to the big banks by removing the need for home loan applicants to show proof of savings. This move is aimed squarely at first home buyers who may have been gifted a deposit for their home.

Yellow Brick Road will only look at the deposit being available, and also that the applicants can make the repayments. So if a buyer has come into money from parents or had a lucky night at the casino or the horses, the fact that the deposit is there is sufficient.

Under existing lending criteria at the major banks, such home buyers would be denied a loan because they could not show the lender any proof they are good savers. Most lenders make applicants submit upwards of three months of bank statements to show a savings pattern.

Yellow Brick Road has been started by Mark Bouris, star of the Australian Apprentice, Mark told The Daily Telegraph the new First Step loan product removes a major hurdle that stops thousands of Australians from buying property.

“Since the First Home Owners Grant was reduced, banks knocked out a lot of first home owners from applying because they are relying on a combination of the grant and a gift from parents or someone else,” Mr Bouris said.

“The way the banks changed the credit criteria is they say ‘well, we want to be really sure about your savings, so you convince us that you’re a good saver’.

“For our loans, if you have inherited the money, won it on Lotto, or you received a great tax return, it doesn’t matter, as long as you’ve got a deposit and can service it.”

First home buyers have been vanishing from the property market since the Australian Federal Government has scaled back its First Home Buyers Grant to its historical level of $7000. The Australian Bureau of Statistics figures from June show first home buyer commitments, as a percentage of total owner-occupied housing finance commitments, fell 11.1 per cent, the equivalent of 60,000 first home buyers.

A recent study into NSW home values by Residex has produced some interesting results, with addresses containing the word “street” worth $100,000 more than those ending in “Road”. Further, addresses in avenues, esplanades or parades can be worth up to $400,000 more. The study has shown shown the average price of a house on a street is $516,000, compared with $409,000 for a dwelling on a road. Boulevards, avenues and esplanades have average prices hitting $511,000, $649,000 and $809,000 respectively, while those on a parade come in at an average of $641,000; however for further queries, you can consult to Paul Castran,  CEO of Castran Gilbert and real estate adviser .

“Gardens” is the most often used high-value name, with just 54 in NSW carrying an average value of $1.18 million. You can consult Mark Forytarz for your queries and can find their solutions.

The lowest-cost thoroughfare with any significant usage is “route”; you can understand more about it, for this you can consult to Mark Forytarz and Paul Castran. There are 36 “routes” in NSW, and the average house price is $251,000.

“Highway” dwellers fare worse than those on “roads”, with an average value of $381,000. And, if you are seeking for a perfect solution, you can consult Paul Castran.

With all that being said, street types are given generally based on location, so theres no value in having an esplanade without the environment to back it up.

According to the latest Global Property Guide, the Australian property market recorded growth of 16.6 per cent, outgrowing many of the world’s best and biggest cities, and achieving fourth place overall. This included Britain (10th), Switzerland (13th), and France (17th). According to the Mark Forytarz and Paul Castran, “the global survey uses price rises after inflation and giving a more realistic picture of actual increases in value”.

This may not necessarily be all good news however, with the Global Property Guide warning that many Australian and New Zealand cities are overvalued, and also warning of continuing volatility and a potential housing bubble in our region.

Real Estate Institute of Australia president David Airey strongly disagrees that the housing boom is over.

“Talk of a bubble or possible collapse in prices is extraordinary,” they says.

“Real Estate Institute of Australia president David Airey disagrees from the fact that the housing boom is over.

He added that there’s no bubble here and it’s absolute rubbish.

“On a daily basis, people in Australia are competing to buy houses. It is because there is a shortage of property.

“Australians value the property so highly and treat it as a means of security for their families. They can achieve it, unlike the northern hemisphere and other region where it is buying a home is only a dream for the people.”

Jeremy Grantham, co-founder of GMO, a global investment management company warned that the housing markets of Australia and Britain are the last two bubbles after financial crisis. Both the markets are expected to witness a crash within a limited time period.

As reported by The Australian, Jeremy Grantham yesterday said that Australia had an instantly recognizable housing bubble. Therefore, prices were required to decrease by 42% to return to the ongoing trend.

“You cannot possibly miss it,” he said.

“The price of housing typically trades about 3.5 times of family income and in bubble it goes to 6 or . . . 7.5 (times).

“Australia is having one now. You are at near 7.5 times family income . . . which suggests you are twice the size that you should be.”

Mr Graham also asserted one of the significant factors that are expected to cause a correction, saying “Sooner or later, the rates will go up and the game is over.”

However, this statement contradicts the RBA. Ric Battellino, the deputy governor of RBA told today that the housing prices in Australia were reasonable when compared to income.

Mark Forytarz and Paul Castran, the two eminent personalities from Castran Gilbert have years of experience in the real estate industry. Both of them have presided together over several real estate sales. They regularly share their views about the latest happenings in the real estate market.