Gov’t to take on housing challenge

| 12/11/2019 | 91 Comments
Cayman News Service

(CNS): The premier has announced a number of measures that he claimed his government will be introducing over the next two years to tackle the mounting problem in the Cayman Islands of unaffordable housing. With rents soaring and developers concentrating on building luxury condos, working Caymanians can no longer afford to buy a home and the army of supporting expat workers are struggling to find places to live, as rents have become so high.

During his budget statement in the Legislative Assembly on Friday, Premier Alden McLaughlin described the property problem as unsustainable and said that the increasing cost of homeownership and the escalating costs of rents were major contributors to the high cost of living. Home ownership is a justifiably Caymanian aspiration but the dream was becoming beyond the reach of hard working young Caymanian families, he said.

While existing homeowners are benefitting from the strength of the property market, those wanting to buy for the first time are being priced out. McLaughlin said that in the new budget period his government had included new measures to bring home-ownership within the reach of more families.

He confirmed the continuation of stamp duty concession for first time Caymanian buyers on homes valued at $400,000 or less, which he said has proved effective. It was therefore being extended to include the first $400,000 on any home, regardless of its total value, he said, adding that government would continue to review the stamp duty concession and increase it if necessary.

McLaughlin also made a commitment to reinvigorate other programmes, such as the Government Guaranteed Home Assisted Mortgage Programme, which gives banks a government guarantee of up to 35% on the money they lend to local home buyers.

“Historically this programme has been very successful with negligible levels of default,” he said, as he also announced a review of the Build on Your Own Property Programme to help those with land find the money to build.

He also said his government would be funding the National Housing Development Trust with more affordable homes in East End West Bay and George Town, which, he said, “represent an important route to home-ownership for Caymanian families”.

But he accepted that the Trust alone cannot meet the need among Caymanians for affordable homes, with developers building more and more housing units aimed exclusively at the luxury end of the market. While he said there was an economic logic to developers’ choice, his government was going to work with them to look at how they might be encouraged to deliver more affordable homes, though he did not say what could entice the developers to do so.

The premier also noted the situation with the rental market and the problems at the lower end of the market, including for the families seeking housing support through the Needs Assessment Unit.

“We need to work with potential landlords to look at ways government might approach the market differently in order to encourage more supply,” he said, adding that government will talk to the housing trust about renovating or redeveloping some existing government-owned properties and bringing them back to the rental market.

Rents have proved a major problem for the economy for a while. With work permit holders struggling to find somewhere to live, given the low wages of many jobs in Cayman, even the Chamber of Commerce has labelled it as a priority that the government should address. Inflation has been fuelled by accommodation costs after a 20% increase in rents this year.

One of the reasons for the rent increases is the surge in local accommodation been placed on Airbnb and other social media platforms, where owners can command considerably more by renting rooms, studios, small apartments and even family homes to visitors rather than to long-term tenants.

The premier described the emerging a housing crisis, the increasing cost of living and low wages, coupled with Grand Cayman’s major traffic congestion issues, as “problems created by success”, which he said he sometimes refers to as “growing pains”.

McLaughlin said he would rather be contemplating these issues than the problems of the recession and hardship his government had inherited in 2013, as he lauded what he claimed was the success of the last two administrations he has led.


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Category: Business, Local News, Politics, Real Estate

Comments (91)

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  1. Right ya so says:

    Don’t worry everyone real estate prices will soon be dropping, the next recession is just around the corner. Sell high, buy low.

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    • Anonymous says:

      It will coincide with thousand of construction workers leaving, so there will be plenty of cheap lower end apartments to snap up, but no one to fill them. The government will blame it all on global economic forces. They will be lying.

    • Anonymous says:

      really?…when is the recession…please tell.

  2. Right ya so says:

    Yep. Cos they did such a good job the last time!

  3. Veronica says:

    You have Jamaica come here to work and the pay we get from the Caymanian cant pay rent and at the end of the day they expect us to do a good job at the work they give us to but dont want to pay us so we could sleep comfortable after a long day of work.the rent here or too high with the unkeeping of the dwelling Caymanian can go anywhere and make like but they dont believe in work hard.we need the job yet they say Caymanian first and they dont want/need the job yet still we cant get it.its so funny which I dont understand

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    • Anonymous says:

      Veronica you should take the English test. Your English is terrible. Truly you have the big US, Canada and the UK to go to for work. Caymanians aren’t keeping you here. Seek a better place with better opportunities for you and your family. Ignore us Caymanians when we say we don’t want to work. It is not your concern anyway. Your concern is your ability to make a life for yourself and your family. Go where you will find what you are looking for.

      • Anonymous says:

        Thanks – 10.00am. And to you Veronica you and the tens of thousands of you all that rely on Cayman and are continuously draining us, you all just need to go. My God you say you are not getting paid! Most of you are living high here and sending thousands of $’s back to your country (and you still live here better than most of us do). You all just need to be gone!!!! you mean us no good. You already destroyed your own country.

  4. Anonymous says:

    Basic food, shelter and healthcare are inherent rights of every human. After all, nobody asked to be born in the first place. But pay attention to the word BASIC. Since humans (TODAY) can’t survive without food, roof over one’s head and know nothing (unlike their ancestors) how to take care of common sickness and survive in a medical emergency, modern, developed societies must guarantee this very basic minimum to everyone. It must go without saying.

    More advanced and well off societies, like The Cayman Islands, can afford, and most importantly, obligated, to justly distribute financial windfall between all residents and set aside for future generations. There are many forms of wealth distribution. Housing/homeownership assistance is just one of them.

    The Cayman islands is in the midst of an affordable housing crisis despite overflow of Government coffers. CIG can support housing in two main ways: rental assistance programs and homeownership finance assistance programs. But ask yourself, “who will benefit?” Remember, distribution of wealth must be just, if not equal.

    When a newly elected first time MLAs receives $109,932 per year plus benefits + an additional $2,000 per month (despite their lack of experience), while low-income homeowners struggle to pay for housing from month to month and middle-income households paying more than 30 percent of their income on housing, how do you distribute country’s wealth among all beneficiaries equally?

    In other words how to avoid the already wealthy receiving 90 percent of the financial windfall (in the form of compensation, benefits and other perks such as lavish travel, vehicles, driver etc.), while households making less than $50,000 a little more than 1 percent, in the form of homeownership assistance programs?

    How about future generations? Where are they going to live, build their house on, if no land set aside to benefit them?

    These kind of questions people should be asking. But unfortunately there are no visionaries in your government who can answer. Succession planning doesn’t exist either.

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    • Anonymous says:

      I agree with you and Caymanians need to come together and fix our country and we need to put together a group chat on WhatsApp for Caymanians to talk about what change we are going to do for our country especially the younger generation need to talk together because I worry what Cayman has to offer me whenever I decide to have a family what will my kids benefit from living in Cayman and what will the education system be teaching them and most of all will the minimum wage in Cayman increase.

  5. Anonymous says:

    this all goes back to where they put goab….
    if they had of decentralised from gt to say bodden town… then affordable homes would have been built and developed in that area,
    As it stands now….no one want to live east of hurleys and all development from prospect in is high end and unaffordable.
    the cycle cannot be broken until cig dectralises from gt….which would also cure the traffic woes.

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  6. Anonymous says:

    Developers concentrating on luxury property? Not without planning permission they won’t.

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  7. Anonymous says:

    I haven’t raised my rent for my tenants in over 20 years. The people come. Stay for their 9 years, rollover and come back. Why don’t I raise the rent, because I’m not greedy. But….I am aware all my neighbors no longer have long term rentals and are all Airbnb. They kicked out everyone and now I worry if these places are drug houses or Airbnb tenants or what have you. When it was long term tenants I didn’t fear living alone. Now I do.

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    • Anonymous says:

      And your name is?

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      • Anonymous says:

        Why should the person provide their name? They don’t seem to have anything available if the tenants keep coming back. They don’t need to advertise that they aren’t greedy by publicizing their name. Not everyone wants to be boastful. The point is that landlords don’t need to increase rent many just want to.

    • Anonymous says:

      4:14 I applaud your decision to keep your rent the same. I, however, think it’s unfair to say that landlords who up the rent on their properties are “greedy”. Inflation has risen in Cayman as has the cost of living. The rise in rent reflects this adjustment. It may seem unfair to some but until the cost of living and inflation go down rent will be a bit on the high side.

  8. Local Overseas says:

    Alden, have you thought about changing the stamp duty law to make it payable by the seller rather than the purchaser? That should be a considerable help. It’s the sellers that are making the money so they should pay the stamp duty, not the purchaser. Makes sense to me.

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  9. Anonymous says:

    How about giving government workers access to their pension funds just like public sector to purchase a home?

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  10. Anonymous says:

    This is the best one yet. Create the problem with one hand, uncontrolled development, then try to fix it with the other hand. All the while trying to grow the population to 100,000. It wont be long until we will need that fifty story building to put all the poor caymanians in that cant afford a home!

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  11. Anonymous says:

    The rental stamp duty may be an option for a sliding scale to encourage cheap rentals while discouraging high end rentals – but it would require a scale suitable to pay for the enforcement of the stamp duty, and I have no idea what rental rates currently are, so the below are just examples of how it could work

    Rental Cost Per Person Per Month, i.e., families or sharers get a reduction
    $0-$500 0%
    $501 – $1K 1%
    $1k – $2K 10%
    $2K – $3K 25%
    $3K – $4k 50%
    $4K – $5K 75%
    $5K+ 100%

    So a family of 4 paying $6K per month in rent would pay an effective rate of 10%
    A couple paying $6K per month in rent would pay an effective rate of 25%
    Two people sharing an apartment for $1K per month would pay an effective rate of 0%

    the numbers aren’t important. What’s important is if people think this could drive rental accommodation costs towards the lower end of the market by discouraging demand for more expensive places? Or would it simply be punitive to the high end accommodations while not sufficient to occur low end development?

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    • Anonymous says:

      Do you think landlords will keep rents at the same level if the govt imposed a 50% stamp on their rent? Rents would simply increase to cover the stamp tax.

      Rent is expensive if you want to live in WB, GT and 7MB. People want to live in GT or 7MB but they don’t want to pay GT or 7MB prices. That’s the issue.

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      • Anonymous says:

        That’s precisely the point. Its easier for Government to charge a fee than to find a way to decrease a private sector charge. If rents go up artificially (because of the stamp duty) and price people out of the higher priced places it should mean more people looking for lower priced places, meaning a larger market, meaning more incentive for developers to target that market. Its trying to move the supply side of the supply&demand equation.

        I’m not suggesting this is the solution, I’m tossing it out there for discussion.
        1) We could argue that the demand is already there so its not a demand side problem.
        2) Or that the demand and supply are there but there’s some artificial barrier (travel time) to the demand being able to access the supply. Which means the problem isn’t the housing costs, its travel costs ($, time, convenience, etc.).

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    • Anonymous says:

      socialist much?

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      • Anonymous says:

        No. It doesn’t force the developer/renter to NOT build/rent high end places. It just disincentivises it. Calling this socialist is like calling duty breaks for developers socialist.

        Socialist would be … well, just about any other solution that’s viable (rent/price controls, forcing developers to develop a certain amount of ‘low rent’ places, etc.)

        If you want to avoid ‘socialism’ then the free market had better come up with a solution to the real problems like people being priced out of the housing market.

  12. Anonymous says:

    Must be an election coming up. Suddenly Alden cares.

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  13. Anonymous says:

    Its not a unique problem to Cayman, but Cayman does provide the chance to uniquely cure it’s ills. Not in any particular order:

    Prevent banks overcharging – mortgage rates; banking fees; the indefensible US$-KYD 80/82/84 spread, that must end as it simply pulls money out of the public pocket and into the banks

    Insurance – CIG should work with Storm insurance providers to stop the gouging there.

    CIREBA – really? how is this cartel operating without oversight? 10% on property under $100K?! 7% under $500K?? and so on, this is one of the greatest scandals in Cayman’s history.

    New Developments – whilst it’s nonsensical to suggest all new developments should have a broad mix of property types/values, its not out of reason to suggest forcing developers to ALSO create a similar # of lower value properties elsewhere on island. 60 condos on SMB? Well, we need 60 1 bed condos in Savannah also. It’s doable.

    Reclaim land – the north sound around airport and dump is dying anyhow, why not reclaim land like they do all over the world, and zone it low income, high density? it’s doable.

    Stamp Duty – only on 2nd and more homes? OR, stop charging it upfront? OR enable homeowners to wrap the stamp into their mortgages?

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    • Anonymous says:

      CIREBA – really? how is this cartel operating without oversight? 10% on property under $100K?! 7% under $500K?? and so on, this is one of the greatest scandals in Cayman’s history.

      Bingo.

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    • Anonymous says:

      Might as well add the following as well:

      Dampening the galloping cost of living – through active policy to regulate costs of utilities (power and internet especially)

      Increase Duty allowances for travelers – to effectively make merchants outside of Cayman competitors of the local retailers who charge 3-4 times the price charged outside of Cayman.

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  14. Anonymous says:

    i am a native ….indigenous caymanian….i choose to live in a very tiny house of less than 500 sq ft…bed..bath and kitchen…i make close to 100k ci per year….i love saving half of my salary every month….and living stress free……caymanians ..you can do it?

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  15. Anonymous says:

    My strata is increasing because of the one owner (born caymanian) who can’t afford to pay her share so the reset of us have to cover her. Too scared to take her to court I guess. Well, that and we do not want her homeless…

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  16. Anonymous says:

    Sometime you just have to compare.

    Affluent Qataris Seek What Money Cannot Buy
    https://www.nytimes.com/2010/05/14/world/middleeast/14qatar.html
    “On the surface, Qatar appears to be on a roll. This peninsula of sand jutting into the Persian Gulf has leveraged its oil wealth and unbridled ambition to garner a world-class reputation on many fronts: international relations, art, higher education. But at home, there is tension, anger and frustrations”

    • Anonymous says:

      “Qataris and foreigners alike described a social contract that offers material comfort and financial reward in exchange for not challenging the government’s choices.”

  17. Anonymous says:

    Such crap. He just realized this?! Nah he too busy trying to bag and destroy the cruise industry. While the garbage mounts and Caymanians can barely afford to eat.

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  18. Anonymous says:

    “Like traffic, housing is a crisis that is very much a result of lack of Government strategic planning and partnership with the private sector. The drive for population increase, encouraging Airbnb rentals and other growth strategies not supported firstly by infrastructure puts us where we are now. A similar situation is underway with the Cruise Berth Development.”

    Swiped this comment from Facebook but it deserved to be in the actual comment section. Hope the original poster and CNS doesn’t mind.

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  19. Anonymous says:

    total nonsense from the alden …he has zero understanding of market economics….

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  20. Anonymous says:

    Well the CIG should actually require a first time buyer access to the development being done, many cities require a certain percentage of projects be low income or first time buyer units. I propose that 10% square footage of development be this model, at least two bed two bath and sold at build cost only. The buyer must own it and live it in for 10 years after which they may rent it out or sell it at full market value to move up if they desire. This would allow all future development to benefit caymanians when they purchase or sell.

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  21. Anonymous says:

    Alden, the problems were not created by success. They were created by piss poor planning and arrogance.

    And success? For who exactly? Not the Caymanian people, that is for sure.

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  22. Anonymous says:

    How about rent control??? Like in every other civilized country who want their citizens not to be homeless 🙄

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  23. Anonymous says:

    Disband the CIREBA price fixing cartel

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  24. Anonymous says:

    Houses through the government here should only be for born Caymanians, not paper caymanians.

    Why are the cayman government killing themselves about expatriates.

    We cannot go anywhere that these 200 nationalties come from and make a life.

    We do not owe the rest of the world anything.

    Caymanians also rent, those who cannot qualify for any housing.

    Im so tired of the B/S on this Island, that should be for the younger generation .

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    • Say it like it is says:

      8.23pm Plenty of born Caymanians profiting from these high rents and house prices.You can also live and work in the UK and be treated as a born Brit with your British Passport. Stop whingeing, there is plenty of opportunity here for born locals with an education and the will to work, just follow the example of your 200 nationalities.

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    • Anonymous says:

      Never underestimate the power of ignorance.

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    • Anonymous says:

      “We cannot go anywhere that these 200 nationalties come from and make a life.”. Actually, you can. Many of those countries will let you come and work, in exactly the same way that Cayman allows foreigners to get work permits if they have skills or are prepared to do jobs that locals will not. Of course, you have to be prepared to go and work overseas – in the same way as expats who come here are prepared to travel to work. And if you don’t particularly want to work you can always go and live in the UK and access benefits and healthcare. But don’t let the facts get in the way of your victim hood.

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    • Anonymous says:

      If all the expats left then rents would certainly come down because of the glut of empty properties. Expats are squeezed by greedy landlords. I have friends whose rent increased by $600 a month! You’re not telling me that insurance increased by that. Nothing but unadulterated greed. Wringing every last cent from tenants as they know there is a lot of building going on and long term residents will start buying rather than rent.

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    • Anonymous says:

      We are born stateless until we register and get papers. The law makes no distinction when they got papers through birth or otherwise.

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    • Caymanian Donkey says:

      There is no such thing as a paper Caymanian, these people have contributed to the island over the last 15 plus years, a majority have earn the right to call the self’s Caymanian

      As for working overseas, Caymanians can go to the UK and currently to Europe, work, collect all Benefits not even having contributed any form of tax.

      We don’t owe anyone anything? What world are you living in, be honest here, if not for expats we would not be one of the best financial centres in the world, if not for foreign investment we wouldn’t be the best island in the Caribbean..

      Yes times are very tough, back in the 80’s it was very easy for us to get jobs but times have changed. We need to make sure our kids get a great education as the world requires higher standards, we can’t just walk into a job.

      We do have our problems here but beleive me we are doing alot better than the rest of the world, if you want us to be like Jam, Haiti or other Caribbean islands you are one idiot .

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      • Anonymous says:

        Aside from the “best”, I like your comment. One of the world’s financial centers, not best. You can’t be the best island 🌴 in the Caribbean with the Dump as it is. A load of $hit next to a luxury condo or a hotel significantly devalues these properties, it also stink no matter how much expensive perfume you’d spray(advertising).

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      • Anonymous says:

        Bullshit. I am a paper Caymanian and proud that decent Caymanians gave me the privilege to live in their islands a long time ago.
        I feel no need to step out of my boundaries and tell them what to do in their own islands. That would be disrespectful, yet plenty of us do it.
        I have another country to go to if things don’t work out as all other “paper” Caymanians have, so stop muscling into a gig that is not yours.
        Violent-minded people trying to subdue weaker people.
        Be careful how you treat other people’s homes.

        You may have the hearts of the politicians, but you will never win the hearts of the people with an attitude like that. Please rethink.

    • Hafoo says:

      Thats a very stupid comment..you seem to forget that many of these so call paper caymanians have several BORN Caymanian children…what should these children do?sleep under trees?you are Sooo selfish..please put your brain in gear before you open your mouth….

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    • Anonymous says:

      How about we force renters to rent at a social justice rate, determined by people in government wanting more votes from people who can’t pay their rent?

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  25. Anonymous says:

    I only increased my rent because my insurance premiums increased. This is the only thing that has increased the rent in the last four years and things will not change until the government can do something about the ever increasing insurance premiums.

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  26. BeaumontZodecloun says:

    I think a major, major contributor to the high cost of living is the lack of competition in the barge market. Also, I think the CIG should back off the duty on fuel a bit. Give us all some breathing room … … … IF the benefit of Caymanians is the goal.

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  27. Anon says:

    So Retirees being excluded again I see. They can’t downsize because to pay a Realtor plus Govt Stamp duty wipes out all their profits. Anyone who can afford a house for more than 400,000.00 should get no concessions. Rather the Premier should be waiving Stamp duty for anyone over 60 living on a Pension.

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    • Anonymous says:

      CIG just announced record breaking revenues. The $ coming into the government is not the problem. Its the overboard spending and ridiculous inefficiency and incompetence rampant with the CIG. The government should waive stamp duties for everyone period. They have more than enough money coming in.

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    • Anonymous says:

      They will, its in a previous article.

    • Anonymous says:

      Look, I know retirees have it hard but retirees get more attention than young people in this country. We cant even start a life most other generations are benefiting from the real estate boom and we can’t even get into the market because developers are focused on the high end product. So don’t begrudge us the measly offering from the government.

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    • Anonymous says:

      Retirees cannot get mortgages without a guarantor.

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      • Anonymous says:

        Retirees should not have a mortgage. If you didn’t have your hair & nails done weekly, new car every time you finished paying your loan & trips off island for shopping/vacations , designer shoes/bags/clothes you should have paid your house off in the 30 years before you retired. If not sell what you have & downsize. So many people 50+ ‘needing’ a bigger house & taking out a mortgage. Why?!

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        • Anon says:

          I’m a Retired single mother who worked 2 jobs, raised 5 kids with no help from ex-spouse & paid off my Mortgage. Sold 4 bed house but had to buy 2 bed Apt as I need a roof over my head. Guess what instead if a profit I ended up 15,000 in the Red so we do need Stamp duty relief and CIREBA fees to be limited to 2%.

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          • Anonymous says:

            You don’t have to use Cireba. I sold my house through word of mouth & just made sure I had a good conveyancing lawyer. He charged .5% & made sure everything was done right.
            Don’t listen to ‘if you sell it yourself in this market you are undervaluing your house’ rubbish. I got higher $ than similar sales in neighbourhood & didn’t pay CIREBA a dime. The smaller house I bought was advertised through Cireba but my offer was way below asking & it was accepted within 24 hours – they didn’t counter so must have known their agent had overpriced it.

        • Anonymous says:

          Exactly.

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