Viking Market Overview
Market News - January to March 2021
Along with ushering in of the New Year we got to see an unexpected change in the US Government which seemed to trigger, at least in overseas markets anyway, a bit of a renewed confidence in the wider investment markets and a change in investment sentiment back in to some of the more mainstream and traditional Dow Jones top 50 companies.
With the incumbent government signaling that their important Jobkeeper Supplement would remain in place until the end of March, early April, and with the COVID-19 numbers well and truly back in check, a lot Australian Real Property Investors decided it was now time to start 'buying up residential properties' across Australia, because they must have figured that the low-interest rate environment as well as the all important lower than ever before RBA Cash Rate could only last for so long.
Unfortunately this situation has created a bit of a 'back-log of finance applications' and this remains the case up until Quarter's end, with several of our clients having had to experience some hefty delays with the processing of their residential finance applications, notwithstanding that some of our more active Private Lenders are still frantically offering up credit to Business Borrowers at record low interest rates, in order to try to stimulate some commercial lending activity which has been lacking for some time.
This is such a weird paradigm, on the one hand we have bank loans from 1.79% which are taking 4 - 6 weeks to process and an impending property bubble and on the other hand we have seen little or no commercial lending activities in the pipeline and so we have a case where construction & development loans are being offered out at a base rate from 5% p/a and residential stock re-financing rates are also being offered for not much more. Go figure?
I really don't know if I will ever understand the mechanics behind the property investment and related finance markets ? ... however, in saying this, I doubt if there has ever been a better time than NOW to do an inner-city property development or buy a residential home or investment property ! So happy hunting everyone !
Market News - April to June 2021
With the lingering COVID-19 strain, Delta, having established itself in various capital city metropolitan areas across the second quarter business has remained tough for many small business operators, in particular those operating in leisure and travel industries with many pockets of the country literally deserted.
Obviously the impact of these on-going lockdowns across the country have continued to wreak havoc across a variety of industry sectors, notwithstanding the rapid decline of tourism, but add to this the impact of deteriorating trading conditions with China and we are now seeing a significant downturn in property development and building across the country.
With a lack of readily available building materials from China, coupled with a current 'residential housing property boom' in the Eastern States, which has been primarily brought about by prolonged lower than ever bank interest rates, the construction industry has also seen a significant drop-off in small to medium sized development projects and so right now we are doing a lot of consumer lending assignments as opposed to our favored line of business being construction funding.
The irony of all this however, is that right now has never been a better time to borrow money for a property development because right across the board, Australian Fund Managers are struggling to get money 'out the door' for the benefit of their investors and so construction funding has never been so cheap.
What a strange world we are living in at the moment. Gold & Oil Investments are treading water, the building industry in huge decline materials, prertty soon you ont be able to buy an inner city house in Brisbane for less than $1M and Crypto Currency looks like its taking over the World. What on earth could be next?