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Getting Your First Home Loan Does Not Have To Be The Hassle Everyone says! Learn How You Can Make Your First Home Loan Application A Breeze.

Getting Your First Home Loan Does Not Have To Be The Hassle Everyone says! Learn How You Can Make Your First Home Loan Application A Breeze.

You’ve saved up, despite the low interest rates making it more than a challenge, and now you are ready to take the next step in getting your dream house. Many first time buyers don’t realise that the next step in the process, your home loan application, can be just as important to your property goals as saving is.

Although the process is an important one, we feel that it doesn’t have to be like pulling teeth. So with that in mind, here are some tips to make the most out of your first home loan application.

First off, before you even begin looking at places to buy, you need to make sure you have settled on a budget that gives you a clear indication on what you can spend per month on your loan. Contacting a mortgage broker is a great way to get an independent assessment that will show what you can reasonably be expected to borrow, and even get you pre-approved before you’ve even begun your property hunt.

To make sure your assessment goes smoothly, you have to make sure that you include all your income statements, wage slips and any other information about assets or liabilities you have, like credit cards or personal loans, and even your PAYG and tax returns. Don’t skimp on anything, even if it’s a gift saving’s account set up by your parents. If you provide a complete picture of your financial security, the easier it will be for your broker to do their job, and get you the loan you want.

The loan provider will take all this information, and perform a detailed check on your credit history to see how punctual you are when it comes to paying your bills, or if you have any credit black marks in your credit history.

Some people might be embarrassed, or think that they can hide credit faux pas, but ensuring that your broker or bank gets all the info they need, helps them to give you a realistic figure, and they might even be able to help guide you in the right direction if you have a credit issue that needs solving.

When and if you get home loan offers, it’s equally important to make sure that you can afford the payments, seeing as there is a possibility that a loan offer might require payment that falls outside your initial budget.

In the end, getting your home loan approved doesn’t have to be the excruciating process most make it out to be. If you want any more information regarding a home loan application, or just need some info, don’t hesitate to contact us.

 

 

Right investment? Maximise the benefits of being an Expat – 10th August 2017

Join us on the 10th August – Right investment? Maximise the benefits of being an Expat

 

August 10th, 2017  |  6:30pm

 

Seminar Description

An exclusive seminar with property investment expert, Dr Andrew Unterweger. The topic of the seminar is Maximizing the benefits of being an expat and you’ll discover exactly how to invest in the right property whilst living in Singapore or offshore. There will be a presentation followed by drinks and nibbles and an opportunity for you to ask Dr Unterweger your questions about your own properties or investment goals.

Are you interested in learning about the 2017 Australian Budget and how it may impact Expats? Learn about key changes to Australian property lending, repatriation strategies and the economic outlook for 2017.  You will learn how to legally reduce your taxable income in Australia, how to successfully build your property portfolio and other key information for a financially successful return to Australia. We will be covering repatriation strategies and the economic outlook for 2017.

What you’ll learn

– The key ingredients to finding the right investment property
– How to buy a brand new investment property with very little or no down payment
– Location, location! The key areas to invest in for 2017
– Winning strategies to build your own property portfolio

Who should attend this Seminar?

This seminar is suitable for anybody starting out investing in Australian property or those investors looking to continue to accumulate and expand their property portfolios.

Seminar Details

Date:  10th August 2017

Time: 6:30pm – 8:30pm

Suitable for: Those interested in Australian property

Location:  One Shenton, 1 Shenton Way, Singapore 068803

RSVP: info@aussiepropertyguru.com or on link below.

 

** Food and fine wines provided **

 

 

Register Today!

Register for this seminar by clicking on the link below or sending us an email at info@aussiepropertyguru.com and we’ll respond to you to confirm your registration

REGISTER NOW 

Everything You Needed To Know About The Upcoming Off-The-Plan Stamp Duty Concession Changes

Everything You Needed To Know About The Upcoming Off-The-Plan Stamp Duty Concession Changes

Whether you’re purchasing an Australian property for personal use or investment, you’ll no doubt have resigned yourself to the reality of having to pay a costly Stamp Duty. Thankfully, there are concessions, but in a few months there will be a change to the off-the-plan stamp duty concessions available to Victoria property purchases.

From July, those investing in a non-residential development won’t be eligible for this concession if the contract of sale is made after the date. Only first-time home buyers purchasing a property valued at $750,000 or less will benefit, and first time home buyers purchasing a property of less than $550,000 will be entitled to a principal place of residence stamp duty concession.

So if you don’t fall into the above categories, what else do you need to know?

If your aim was to make an investment purchase in Victoria, you should be aware that from next year the Vacant Residential Property Tax will also come into effect, as part of local government’s aim to make more properties available to buyers and tenants for actual residential use by annually taxing vacant residential properties in an amount equal to 1% of its Capital Improved Value. This means that if you’re considering finalising an investment after these dates you will need to sit with your property manager and advisor and discuss your rental options, as you will incur the fee if your property lies vacant for six months or longer.

Furthermore, if you are planning to transfer the investment property to your spouse in order to escape paying tax, you will also no longer be able to take advantage of this loophole after July 1st.

While details of the law are yet to be finalised, it would be in your best interest to clarify the status of your off-the-plan investment purchase as soon as possible so that you aren’t saddled with any unexpected costs in the future. By sitting down and discussing your needs and expectations with one of our team at an organisation like the Aussie Property Group, you will be prepared for whatever happens.

 

LEARN HOW TO MAXIMIZE THE BENEFITS OF BEING AN EXPAT – 24th May 2017

Join us on the 24th May – LEARN HOW TO MAXIMIZE THE BENEFITS OF BEING AN EXPAT

 

May 24th, 2015  |  6:30pm

 

Seminar Description

An exclusive seminar with property investment expert, Dr Andrew Unterweger. The topic of the seminar is Maximizing the benefits of being an expat and you’ll discover exactly how to invest in the right property whilst living in Singapore or offshore. There will be a presentation followed by drinks and nibbles and an opportunity for you to ask Dr Unterweger your questions about your own properties or investment goals.

Are you interested in learning about the 2017 Australian Budget and how it may impact Expats? Learn about key changes to Australian property lending, repatriation strategies and the economic outlook for 2017.  You will learn how to legally reduce your taxable income in Australia, how to successfully build your property portfolio and other key information for a financially successful return to Australia. We will be covering repatriation strategies and the economic outlook for 2017.

What you’ll learn

– The key ingredients to finding the right investment property
– How to buy a brand new investment property with very little or no down payment
– Location, location! The key areas to invest in for 2017
– Winning strategies to build your own property portfolio

Who should attend this Seminar?

This seminar is suitable for anybody starting out investing in Australian property or those investors looking to continue to accumulate and expand their property portfolios.

Seminar Details

Date:  24th May 2017

Time: 6:30pm – 8:30pm

Suitable for: Those interested in Australian property

Location:  One Shenton, 1 Shenton Way, Singapore 068803

RSVP: By Friday 22nd May 2017

 

Register Today!

Register for this seminar by clicking on the link below or sending us an email at info@aussiepropertyguru.com and we’ll respond to you to confirm your registration

REGISTER NOW 

THE NEW RBA 1.5% RATE: WHAT THIS MEANS FOR AUSTRALIAN PROPERTY INVESTORS

THE NEW RBA 1.5% RATE: WHAT THIS MEANS FOR AUSTRALIAN PROPERTY INVESTORS

 

As I speculated last Monday, the June quarter CPI report gave the Governor enough ammunition to act.

 

The Reserve Bank said a rate cut will create “room for even stronger growth” as the inflation rate is set to remain below its target range and risks in the housing market abate.  read more..

The Reserve Bank of Australia (RBA) reduced its official cash rate to a new record low of just 1.5 per cent at its August board meeting.

 

We expect this move to stimulate the country’s property market further, given that the RBA’s decision to trim the rate was mainly aimed at stimulating the economy and boosting employment. Notably, inflation data for the June quarter showed that consumer prices increased by only 1 per cent year-over-year. This pace was well below the Reserve Bank’s target of 2 to 3 per cent.

 

What’s remarkable in the RBA’s recent rate cut is that the monetary agency has apparently adopted a relaxed stance about the east coast’s housing market. Reserve Bank Governor Glen Stevens was quoted as saying in the rate cut announcement that home price increases are “rising only modestly” so far this year, thus allaying some fears that the Australian real estate market is overheating.

 

Stevens also noted the apartment construction boom in the east coast cities which would boost housing supply in the next two years. In this context, upward pressure on prices can be expected to diminish and hence the need for the rate cut to pump-prime borrowing as well as consumer spending.

 

The RBA governor likewise stressed that lending growth in housing has slowed somewhat this year. This slower pace suggests that the probability of lower interest rates increasing the risks in the housing market has lessened.

Prospective property investors and home loan borrowers who wish to take advantage of the recent interest rate cuts, however, need to be selective and shop around for the best products and rates. The same is true for homeowners with mortgages, as not all banks are passing the recent RBA rate reduction on in full.

 

The big banks, in particular, are passing on less than half the cut. The reduction in interest rates ranges from 10 basis points (NAB) to 14 basis points (Westpac). Notably, NAB and the other big banks passed on the full cut when the official rate was cut in May this year.

At least one smaller bank, on the other hand, passed on the rate cut in full, while customer-owned Bank Australia trimmed its standard variable mortgage rate to 4.74 per cent. It is therefore vital that people with mortgages re-examine their current home loans to check how much of the interest rate cut is being passed on to them.

 

In one estimate, some $16,000 could be slashed over the entire life of a $300,000 mortgage having an average variable rate of 4.93 per cent which received the full 0.25 percentage-point interest rate reduction

Offset mortgages likewise present windows of opportunity for prospective investors and property buyers. Blending a traditional mortgage with a deposit account now looks quite attractive as together with the rate cuts, major banks are passing on a rate increase of as much as 50 basis points on new term deposits.

 

Moreover, here’s the thing. There are expectations that while interest rates may remain steady at 1.5 per cent this year, the RBA could cut the rates twice more during the first half of 2017. We are certainly abreast of these recent market developments and definitely have more to share on the opportunities that the current RBA interest rate regime presents to investors.

 

Best Regards

Dr Andrew Unterweger

MBBS, CFP®, Dip FP,FPA, AFA, SMSF
Chairman

Rate Cut or Not ?

Rate Cut or Not ?

Rate Cut or Not ?

Commentators are divided as to the likelihood of the Reserve Bank of Australia announcing another interest rate cut in August, especially in light of the June Quarter CPI report that has just been released.

The uncertainty surrounding Tuesday’s decision is reflected in the market, where pricing for a rate cut is about 50-50. The vast majority of economists still expect an easing.
In general, the market tends to get the RBA right rather than economists but we also need to look at what the market thinks via the strength of the Aussie Dollar which is trading near its recent highs above 0.76 USD.

I believe the RBA has sufficient data to warrant a cut to 1.50 % but can also see a delay till November as the Housing Market has been showing some resilience in the last quarter, even with APRA and the banks tightening credit policy to limit the amount of investment lending being made available to property investors.

Its interesting to note that we live in a world that is awash with QE but there has not been any market commentary on the possibility of the RBA actually using anything else than monetary policy to stimulate the economy.
It is reassuring to note that the RBA have considered what lessons can be drawn for Australia by looking at the experience of other Central Banks in the US, Japan and Europe that have adopted various methods of deploying monetary stimulus beyond rate cuts.

In contrast to where central banks see the state of their economies in terms of trying to stimulate growth, global markets are surging again after a short correction post the Brexit vote and asset price growth continues unabated as investors continue to chase yield.

This state of affairs does make the decision to invest in quality Australian residential property assets a far more reassuring one, especially when borrowing in AUD to fund these purchases.
We need to remain focussed on what the research can show us and not chase assets that have seen too much short term price appreciation in this cycle.

Always remember not to lose sight of the fundamentals as that will reduce the chances of making the sort of mistakes that many investors tend to make.

Let’s see what Tuesday brings us !

 

Best Regards,
Dr Andrew Unterweger MBBS, CFP®, Dip FP,FPA, AFA, SMSF
Chairman

 

 


bloomberg

Aussie Inflation Delivers RBA Smoldering, Not Smoking Rate Gun  The gasps following the previous inflation release were absent this time. Consumer-price growth in Australia remained subdued in the second quarter, but not as weak as some economists feared. And it didn’t suggest the country was being dragged even further into the disinflation vortex. So while most economists are sticking to their prediction the Reserve Bank of Australia will cut interest rates in six days’ time, the couple who changed their calls presented compelling cases for doing so… Read more

 

 

 

 

RBA’s sober assessment of the labour market and housing: Westpac’s Bill Evans 

The minutes of the July monetary policy meeting of the Reserve Bank Board confirmed the importance of next week’s June Quarter inflation report. The key sentences in the concluding paragraph of the “Considerations for Monetary Policy” section state: “The Board noted that further information on inflationary pressures, the labour market and housing market activity would be available over the following month and that the staff would provide an update of their forecasts .. Read more

 


 

 

Australia’s Central Bank Would Mix Stimulus Tools in Extreme
Scenario

Australia’s central bank has studied the examples of unorthodox policy conducted by its peers, and would favor a multi-pronged stimulus if economic conditions unexpectedly deteriorated to the point where it had to head into uncharted territory.The Reserve Bank of Australia currently still has room for traditional interest-rate cuts, with its benchmark at 1.75 percent. However, economists anticipate another reduction as soon as next month, and Deputy Governor Philip Lowe — who will take the RBA’s helm in September — has indicated that lowering the rate on its own would lose effectiveness as it approaches 1 percent..

Read more

 


 
 

Focus Shifts to AUD/USD Amid Bets for RBA Rate-Cut
Talking Points:
– AUD/USD Preserves Near-Term Bullish Formation Ahead of RBA Rate-Decision.
– USDOLLAR Extends Losses as 2Q GDP Report Disappoints.
  • Even though AUD/USD largely preserves the upward trend carried over from the end of May, the near-term outlook remains clouded amid the divergence in the Relative Strength Index (RSI); need a break of the bearish formation in the oscillator to favor a larger advance in the exchange rate.    Read more

 


 
Headline inflation at weakest annual pace in 17 years

Headline inflation has unexpectedly slowed to the weakest pace in 17 years, ramping up speculation the Reserve Bank of Australia will cut the official cash rate to 1.5 per cent next week.

The consumer price index rose 0.4 per cent in the June quarter from the previous three months, and 1 per cent from the same period a year earlier, the Australian Bureau of Statistics said on Wednesday. Economists surveyed by Bloomberg News had forecast inflation of 0.4 per cent and 1.1 per cent.More importantly, measures of so-called core inflation that are closely watched by the Reserve Bank showed price weakness continues to be soft, exacerbated by the lowest wages growth on record, the ongoing deflationary impulse of a sluggish global economy, and a lack of pricing power by retailers in..

Read more

 


 

 
 

Meet Dr Andrew Unterweger

Dr Unterweger is a highly qualified financial and property adviser, experienced venture capitalist and successful investor

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Negative Gearing – Should it Be Abolished?

Negative Gearing – Should it Be Abolished?

SHOULD NEGATIVE GEARING BE ABOLISHED?

 

by Andrew Unterweger | 5th May 2016

With the release of the Australian Budget earlier this week, we have seen much of the negative gearing discussion put to bed…for now. Should negative gearing be abolished? Should it be changed and only allowed on new properties? What would be the impact of such a change.

This debate may be something we would need to consider if the Australian Labor Party were in government, however, that is not the case and I think sufficient common sense prevails in the Turnbull Government so that we can safely put this back into the closet until this time next year.

One of the largest independent research houses in the sector, BIS Shrapnel, have prepared a detailed report in relation to the Labor Party’s proposed negative gearing changes. The Labor Party has outlined that its policy:

• is to halve the 50% capital gains tax discount for investors to 25%
• to limit all new negative gearing to new homes from July 1, 2017
• will raise $32 billion over 10 years and generate an extra 25,000 construction jobs annually because of the demand of new housing.

The BIS Shrapnel Report claims Labor’s negative gearing plans :

• will increase rents by an average of 10 per cent, or $2600 a year,
• depress new home construction by 4% ,
• shrink gross domestic product by $19 billion a year,
• lead to 175,000 fewer jobs over 10 years,
• shrink government tax revenues by $1.65 billion a year, and
• put 70,000 households into rental stress.

Obviously, this is not a positive outcome for the Australian public and must be taken into consideration by the Labor Party. As property investors, it’s important to remain vigilant and plan appropriately to allow you to build your property portfolio over time without taking on unnecessary risk.

 

To Your Property Investing Success!

Aussie Property Guru is your expert adviser for investment in Australian property. We provide a full tailored concierge service for each of our clients from finding the right property based on your own situation, projecting and managing your cash flows, structuring and arranging your financing and working with a team of professional settlement agents and property managers to ensure your property is tenanted, saving you time and money. Book your complimentary consultation with our team here.

Disclaimer: This information on this site is for general information purposes only. It is not intended as financial, tax or investment advice.

RATES FORECAST TO FALL TO 2PC

By Smart Property Investor Staff Reporter

Friday, 06 February 2015

Two prominent economists have praised the Reserve Bank of Australia’s decision to reduce the cash rate and have predicted at least one more cut to come.

Domain Group senior economist Andrew Wilson said the Reserve Bank had made the right decision to reduce the cash rate from 2.5 per cent to 2.25 per cent.

Dr Wilson also said that another cut is likely, given that the economy received minimal stimulus from the succession of rate cuts between October 2011 and August 2013.

 

“We haven’t had much action from cutting from 4.75 per cent to 2.5 per cent, so I’m not sure what a 0.25 per cent improvement is going to do,” he told Smart Property Investment's sister publication Real Estate Business.

“Certainly the Reserve Bank had to act – it’s really the only tool in the box that we’ve got left.”

read more...

Pricing gaps across product types and capital cities are widening

by Cameron Kusher

30 January 2015

The cost of Sydney housing relative to other capital cities is widening and the cost of buying a house as opposed to a unit is increasing as a record number of units commence construction.

The cost of Sydney housing relative to other capital cities is widening and the cost of buying a house as opposed to a unit is increasing as a record number of units commence construction.

According to median selling prices over the three months to December 2014 published in the CoreLogic RP Data Home Value Index report, the gap between capital city house and unit prices has never been greater. As at December 2014, the capital city median house price was almost 20% higher than the capital city median house price. In dollar value terms, median house prices are $100,000 greater than unit prices. read more...

 

John McGrath ignites Sydney's "hot forever" inner ring debate

by Jonathan Chancellor

1 FEBRUARY 2015

John McGrath has always been passionate about the property prospects of Sydney’s inner ring suburbs. But last week he went a little further, saying suburbs close to the city are becoming so desirable that they will be “hot forever”

But last week he went a little further saying suburbs close to the city are becoming so desirable that they will be "hot forever".

The high profile agent stopped short of declaring inner city property prices were immune from price falls.

But the chief executive of McGrath Estate Agents told Fairfax Media these areas would always be attractive to buyers.

"There is just no end of demand from overseas and local buyers who want to live in those precincts," McGrath said.

read more..

 

 

 

 

Sydney property bubble to pop when rates rise, says HSBC

Wednesday, 11 Feb 2015   |

James Mitchell

0

·

·        A fresh round of cheap credit is further inflating Sydney’s investor-driven property prices.

In a research note released yesterday, HSBC economists Paul Bloxham and Daniel Smith predict strong national housing price growth to continue at seven to eight per cent, driven by record-low mortgage rates.

“We see Sydney prices rising by 9 to 10 per cent in 2015 and expect that, when rates do eventually rise, there is now a high risk that Sydney will see price falls,” the economists said.

“Although we do not see a national housing bubble, we believe that growth in Sydney housing prices is currently running at an unsustainable pace and that any further growth is likely to be met by housing price declines in future years, when interest rates do begin to rise,” they said.

A signal of the growing risk of overinflation in the Sydney market is the high level of investor demand, according to HSBC.

Read more…

https://www.mortgagebusiness.com.au/breaking-news/8152-sydney-property-bubble-to-pop-when-rates-rise-says-hsbc

 

 

 

 

 

JESSIE RICHARDSON | 10 FEBRUARY 2015

Melbourne growth to stand out in 2016: HSBC's Paul Bloxham

Melbourne will see the highest price growth of any capital city next year, HSBC has forecast.

In the latest HSBC Australia Downunder Digest report, HSBC Australia chief economist Paul Bloxham forecasts 4% to 8% price growth in Melbourne for 2016, after 7% to 8% growth in 2015.

Bloxham expects that in 2015, Melbourne and Sydney will "continue to outpace the rest of the nation", noting that from its mid-2012 trough, Melbourne's housing prices have increased by 20%. Read more

http://www.propertyobserver.com.au/finding/residential-investment/40049-melbourne-growth-to-stand-out-in-2016-paul-bloxham.html

 

Commonwealth Bank posts 8pc half-year profit rise to $4.5b

By business reporter Michael Janda

Updated 11 Feb 2015, 5:49am

 

PHOTO: The Commonwealth Bank has posted its half-year results. (ABC News: Nic MacBean, file photo)

The Commonwealth Bank has reported an 8 per cent rise in half-year profit to $4.54 billion.

The bank's preferred cash measure of net profit, which adjusts for some accounting items, also rose 8 per cent to $4.62 billion.

CBA said its improved profit came on the back of a 5 per cent increase in revenue, despite subdued conditions in the lending market.

It also said it had lowered its cost to income ratio by 70 basis points to 42.2 per cent, as productivity initiatives continued to contain business expenses.

Read more…

 

http://www.abc.net.au/news/2015-02-11/cba-half-year-profit-result/6084926

 

 

 

 

 

Negative Gearing – Should it Be Abolished?

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The Negative Gearing Debate and the pre-Budget News

The Negative Gearing Debate and the pre-Budget News

The Negative Gearing Debate and the pre-Budget News

We have come to the annual pre-budget season once again where the usual rhetoric in relation to the removal of Negative Gearing and other unpopular outcomes make their way out of the closet to give the media some new doom and gloom scenarios to throw at us.

This debate may be something we would need to consider if the Australian Labor Party were in government, however, that is not the case and I think sufficient common sense prevails in the Turnbull Government so that we can safely put this back into the closet until this time next year.
BIS Shrapnel have prepared a detailed report in relation to Labor’s proposed negative gearing changes:

  • Labor says its policy – is to halve the 50% capital gains tax discount for investors to 25%
  • to limit all new negative gearing to new homes from July 1, 2017
  • will raise $32 billion over 10 years and generate an extra 25,000 construction jobs annually because of the demand of new housing.

The BIS Shrapnel Report claims Labor’s negative gearing plans

  • will increase rents by an average of 10 per cent, or $2600 a year,
  • depress new home construction by 4% ,
  • shrink gross domestic product by $19 billion a year,
  • lead to 175,000 fewer jobs over 10 years,
  • shrink government tax revenues by $1.65 billion a year, and
  • put 70,000 households into rental stress.

When I look back over the first quarter of 2016, the most positive outcome has been the sharp rally in oil and commodity prices in general, a decline in the USD and strength in the AUD.

I think this is largely a momentum driven rally including a large amount of short covering and as such lacks any real substance to continue for the rest of the year.

The positive in this is that it has allowed us to adjust the asset allocation and underlying investments in our clients non-property exposures to take on an even more defensive tactical position and overweight Cash (particularly USD) to be better positioned for the continued volatility that I expect in both Equity and Bond markets over the next year or so.

The economic backdrop continues to be broadly supportive for the Australian residential property market as the RBA has remained on the sidelines in relation to current monetary policy and has left the door open for some further easing in the official cash rate which the markets have already priced in.

The ANZ Research report below shows that there is still a fairly large undersupply of housing in the Australian market which is supportive of the current market cycle. That being said, it is still very important to be very aware of the value gap between the Nation’s Capital Cities and keep an eye on areas of oversupply which are typically found in any of the CBD areas. A number of Banks have blacklisted suburb postcodes which they are not willing to give new loans for due to supply and demand issues which do not support property prices in those areas.

We will continue to monitor all these factors over the year and share some insights along the way.
I wish you every success for 2016…

Best Regards,

Dr Andrew Unterweger MB BS, CFP®, Dip FP, Dip FNS, MFAA, AFA, SMSF, REA


Negative gearing reform could lead to lost decade: BIS Shrapnel

The consequences of limiting the tax deductibility of negatively geared residential properties would impact any expected tax savings, according to a new report from BIS Shrapnel.

BIS Shrapnel’s report, Economic Impact of Limiting the Tax Deductibility of Negatively Geared Residential Investment Properties, said changes to the current negative gearing setup would go well beyond any saving of the income tax concession, to a multitude of unintended consequences.  read more


Is there still a housing shortage in Australia? ANZ Research says about 250,000 dwellings

 

unnamed-4.png

The national shortage of housing in Australia is nearly 250,000 dwellings, lower than previously estimated, but still a long way from being in structural surplus, according to ANZ Research’s latest Economic Insight.
The study forecasts that housing construction and underlying housing demand will see a modest unwinding of the current housing shortage in coming years. This easing will, however, challenge the short-term support to dwelling sales and price growth from the underlying … Read More


Australia’s Property Tax Perks Are in the Crosshairs

 

  • Labor targets landlord tax breaks in election-year pitch
  • Concessions helped fuel 50% home-price surge since 2008

Australian investors enjoy some of the most generous tax concessions in the world when they buy real estate. That could be about to change.

unnamed-3.png

Negative Gearing

About 1.2 million Australians use so-called negative gearing, where they reduce their tax bill by deducting the costs of owning
a rental property, including mortgage interest payments, from their taxable income.
Some countries including Britain and the U.S. allow property investors to deduct costs from investment income; Australia is
unusual because it allows the deduction against wages… Read more.. 


Hedge Funds Turn Bullish on the Aussie

 

  • Australian currency has rebounded from a nearly seven-year low
  • Traders were last positioned for Aussie gain in May: CFTC data

Hedge funds and other large speculators turned bullish on the Australian dollar last week for the first time since May 2015, while Macquarie Bank Ltd. said selling South Korea’s won is now the favoured way to bet against China.

Although Asia’s largest economy is the primary destination for both Australian and South Korean exports, the Aussie’s 0.8% drop this year pales in comparison to a 4.6 percent slump in the won that’s come as China’s benchmark equity index has plunged.
Expectations of relative price swings for the Australian dollar are the lowest since the first half of 2015 when compared with a
JPMorgan Chase & Co. index for the overall currency market.

unnamed-2.png

The Aussie dollar has climbed about 6 percent from a near seven-year low reached in January amid signs Australia’s labor market is recovering enough to allow the Reserve Bank to extend a nine-month stretch in which interest rates have remained unchanged. Read more…

 

 

 


Brisbane’s Apartment Pipeline – 2016 to 2018

Brisbane is under construction. Anyone driving through the Valley, Newstead or South Brisbane can see that. The streets are
lined with hoarding plastered with impossibly beautiful vistas of the CBD from across a computer-rendered infinity pool.
Buyers want to know what Brisbane is going to look like in three years’ time. How will the landscape of this city change as a
result of the recent surge in apartment construction? We will discuss the future apartment market in Brisbane. How many and
what types of apartments will be built and where they will be built.

unnamed-1.pngThere are currently 18 projects under construction across the inner city that have recorded complete sell-outs, totalling approximately 2,600 apartments. There are a further 9,170 apartments under construction across 50 buildings that are actively being sold and advertised to the market-place. Many of these have had significant levels of enquiries and sales in recent years.

On top of this, 33 brand new developments are being marketed and are in the pre-construction sales phase.
There is a further pipeline of more than 21,000 apartments that have not yet hit the market. These projects are in planning and the likelihood of them making it into the marketplace depends on a variety of factors, the biggest of which surrounds finance and risk. Read more …


Oversupply being extended by new construction

 

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“The property made its way onto the market back in July 2013 with the vendor originally asking for offers above $650,000. Since then the vendor has reduced the price down to $465,000, a total reduction of $185,000,” he said. Read more…

 


Meet Dr Andrew Unterweger

Dr Unterweger is a highly qualified financial and property adviser, experienced venture capitalist and successful investor

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Everything You Need To Know About Australia’s Property Market Cycles

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2016 Investment Outlook and Australia’s property market implications

2016 Investment Outlook and Australia’s property market implications

2016 Investment Outlook and Australia’s property market implications

by Dr Andrew Unterweger | 15th January 2016

I would like to wish everyone a wonderful 2016 and every success in navigating what should be another challenging year ahead in terms of making some prudent investment decisions given the somewhat uncertain global macro-economic backdrop that we are faced with.

If I look at the newsletter I sent out at this time last year and the predictions for the year just passed, I think the only outcomes that were unforeseen, were the extent of the continued increases in property values in both Sydney and Melbourne. From a global perspective, similar themes that existed in 2015 will continue this year with the main change being the long anticipated lift off in the Fed Funds Rate and the likelihood of a further three or more such increases during the course of 2016.
The other main concern, especially for Australia and with a direct impact on the Australian property market is China, which, as everyone is aware is Australia’s major trading partner, however, the IMF forecasts suggest that China’s GDP growth could slow in percentage terms over the coming years (from double-digit rates to still rapid high single-digit rates.) and that US growth could pick up, but it still expects China to be the single largest contributor to global GDP growth in USD terms over the coming five years. Also, China’s economy is now much larger than it was when it sustained double-digit growth rates, which makes it harder to grow as quickly as it did and means that even high single digit growth rates deliver significant additions to global demand.

China’s growth is expected to have slowed to around 7% in 2015 from 10.6% in 2010, but because China is a lot larger than it was in 2010 (89% larger in USD terms and 69% larger in local currency terms) the IMF estimates that this year’s GDP growth is estimated to be equivalent to USD1,028 bn, which is slightly more than the addition to GDP in 2010 of USD 980 bn . More importantly, China’s recent Fifth Plenum, which included a significant focus on the 13th Five-Year Plan (2016-2020), saw policymakers set economic growth as a top priority. Policymakers reiterated the goal of “doubling GDP and people’s income by 2020”, which implies a minimum growth rate of around 6.5% a year over the next five years which bodes well for the Australian economy at least in the medium term although I expect this position to continue into the foreseeable future. The major risk that I can see facing the Chinese economy is the expansion that has occurring in their banking system over recent years and hence the potential for a large increase in bad debts if economic growth slows too much, which would then have a global impact.

What we as property investors need to always be mindful of is the likely interest rate environment and, as we saw in the last few months, the impact that regulatory pressures from the likes of APRA can have on both the cost and availability of bank funding to enable us to continue with our investment strategies. I think the RBA will have an even more difficult time in 2016 in terms of setting monetary policy to cope with the continuing decline in the mining sector of the economy, the resilience of the AUD and trying to manage the price growth of some of the nation’s property markets. We have seen the banks come to the aid of the RBA in terms of increasing borrowing rates out of cycle and I anticipate this could well be repeated during the year as they face more margin pressure and slowing lending growth. I am sceptical that the Banks will pass on any interest rate cuts if the RBA does cut the benchmark rate and I think the present scenario continues to favour longer term fixed rates from an investor’s viewpoint.

To summarise, I think the continuing decline in commodity prices, a strengthening USD and weakening AUD combined with a supportive monetary policy from the RBA should assist the Services and Tourism sectors of the Australian economy to continue to expand, which will be broadly supportive for the residential property market. This will continue to drive quite different outcomes for the property markets of the various states of Australia and we should see some easing in the growth rates for Sydney and Melbourne. We continue to favour Brisbane and in particular the inner middle ring ( 3 to 10 km from the CBD ) as being better placed to find value and scope for sustainable longer term growth.

We will continue to monitor all these factors over the year and share some insights along the way.

I wish you every success for 2016.

 

Best Regards,

Dr Andrew Unterweger

MB BS, CFP®, Dip FP, Dip FNS, MFAA, AFA, SMSF, REA

Meet Dr Andrew Unterweger

Dr Unterweger is a highly qualified financial and property adviser, experienced venture capitalist and successful investor

RATES FORECAST TO FALL TO 2PC

By Smart Property Investor Staff Reporter

Friday, 06 February 2015

Two prominent economists have praised the Reserve Bank of Australia’s decision to reduce the cash rate and have predicted at least one more cut to come.

Domain Group senior economist Andrew Wilson said the Reserve Bank had made the right decision to reduce the cash rate from 2.5 per cent to 2.25 per cent.

Dr Wilson also said that another cut is likely, given that the economy received minimal stimulus from the succession of rate cuts between October 2011 and August 2013.

 

“We haven’t had much action from cutting from 4.75 per cent to 2.5 per cent, so I’m not sure what a 0.25 per cent improvement is going to do,” he told Smart Property Investment's sister publication Real Estate Business.

“Certainly the Reserve Bank had to act – it’s really the only tool in the box that we’ve got left.”

read more...

Pricing gaps across product types and capital cities are widening

by Cameron Kusher

30 January 2015

The cost of Sydney housing relative to other capital cities is widening and the cost of buying a house as opposed to a unit is increasing as a record number of units commence construction.

The cost of Sydney housing relative to other capital cities is widening and the cost of buying a house as opposed to a unit is increasing as a record number of units commence construction.

According to median selling prices over the three months to December 2014 published in the CoreLogic RP Data Home Value Index report, the gap between capital city house and unit prices has never been greater. As at December 2014, the capital city median house price was almost 20% higher than the capital city median house price. In dollar value terms, median house prices are $100,000 greater than unit prices. read more...

 

John McGrath ignites Sydney's "hot forever" inner ring debate

by Jonathan Chancellor

1 FEBRUARY 2015

John McGrath has always been passionate about the property prospects of Sydney’s inner ring suburbs. But last week he went a little further, saying suburbs close to the city are becoming so desirable that they will be “hot forever”

But last week he went a little further saying suburbs close to the city are becoming so desirable that they will be "hot forever".

The high profile agent stopped short of declaring inner city property prices were immune from price falls.

But the chief executive of McGrath Estate Agents told Fairfax Media these areas would always be attractive to buyers.

"There is just no end of demand from overseas and local buyers who want to live in those precincts," McGrath said.

read more..

 

 

 

 

Sydney property bubble to pop when rates rise, says HSBC

Wednesday, 11 Feb 2015   |

James Mitchell

0

·

·        A fresh round of cheap credit is further inflating Sydney’s investor-driven property prices.

In a research note released yesterday, HSBC economists Paul Bloxham and Daniel Smith predict strong national housing price growth to continue at seven to eight per cent, driven by record-low mortgage rates.

“We see Sydney prices rising by 9 to 10 per cent in 2015 and expect that, when rates do eventually rise, there is now a high risk that Sydney will see price falls,” the economists said.

“Although we do not see a national housing bubble, we believe that growth in Sydney housing prices is currently running at an unsustainable pace and that any further growth is likely to be met by housing price declines in future years, when interest rates do begin to rise,” they said.

A signal of the growing risk of overinflation in the Sydney market is the high level of investor demand, according to HSBC.

Read more…

https://www.mortgagebusiness.com.au/breaking-news/8152-sydney-property-bubble-to-pop-when-rates-rise-says-hsbc

 

 

 

 

 

JESSIE RICHARDSON | 10 FEBRUARY 2015

Melbourne growth to stand out in 2016: HSBC's Paul Bloxham

Melbourne will see the highest price growth of any capital city next year, HSBC has forecast.

In the latest HSBC Australia Downunder Digest report, HSBC Australia chief economist Paul Bloxham forecasts 4% to 8% price growth in Melbourne for 2016, after 7% to 8% growth in 2015.

Bloxham expects that in 2015, Melbourne and Sydney will "continue to outpace the rest of the nation", noting that from its mid-2012 trough, Melbourne's housing prices have increased by 20%. Read more

http://www.propertyobserver.com.au/finding/residential-investment/40049-melbourne-growth-to-stand-out-in-2016-paul-bloxham.html

 

Commonwealth Bank posts 8pc half-year profit rise to $4.5b

By business reporter Michael Janda

Updated 11 Feb 2015, 5:49am

 

PHOTO: The Commonwealth Bank has posted its half-year results. (ABC News: Nic MacBean, file photo)

The Commonwealth Bank has reported an 8 per cent rise in half-year profit to $4.54 billion.

The bank's preferred cash measure of net profit, which adjusts for some accounting items, also rose 8 per cent to $4.62 billion.

CBA said its improved profit came on the back of a 5 per cent increase in revenue, despite subdued conditions in the lending market.

It also said it had lowered its cost to income ratio by 70 basis points to 42.2 per cent, as productivity initiatives continued to contain business expenses.

Read more…

 

http://www.abc.net.au/news/2015-02-11/cba-half-year-profit-result/6084926

 

 

 

 

 

2016 Investment Outlook and Australia’s property market implications

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The New Normal – is this another illusion?

The New Normal – is this another illusion?

I thought it would be relevant to share my thoughts about this concept that I keep hearing over and over from Fund Managers ( especially in the Fixed Income markets ) that we have entered a “New Age” of lower rates for longer. My experience in the past is that every cycle brings about this paradigm shift of a new normal being created and this then takes on a life of its own as more and more people hear about it, see it being endorsed by experts and then having the media “confirm its very existance” !

The issue I have is that I have never experienced a sustainable “New Normal” ever actually play out in these cases, and I’m pretty sure that is why all languages have the word “Normal” in them in the first place.Human nature being what it is makes me believe that most economic cycles will always revert to “normal”, and that it won’t be any different in this cycle.

I agree that the key factors behind the lower-for-longer scenario in Australia is down to the shift away from mining investment, ongoing weak growth and the need for lower policy rates and a lower Australian dollar to accommodate the rebalancing of the economy.As a result, it would seem “very unlikely” that the Reserve Bank of Australia (RBA) will hike rates any time soon.

I think the Financial Markets are trying to “talk their own book” to continue to make easy money in a QE environment and use the media to try to force the Fed to hold off the rate raising cycle in the US ( which affects markets globally ). As I have told our clients this year, I cannot see why the Fed won’t start raising rates at the September meeting as the domestic US economic indicators point to this being a prudent course of action, notwithstanding the recent turmoil in global equity markes caused by the Chinese devaluation of the RMB and a general increase in volatility. Anyway, we will find out soon enough, and if this doesn’t occur, it is simply delaying the inevitable and we will continue to speculate about the October meeting outcome.

The key take away from this is that once the Fed started raising rates, it will put pressure on bond yields globally, including Australia which will increase the cost of borrowing, perhaps initially in the larger corporate sector, but this will then filter down the food chain and so I think it is an opportune time to look at fixing some personal debt that is being used for investment purposes, and I would look at a 5 year duration as I think rates will normalise and that the “new normal in interest rates” will just be something we remember in the future as being a fundamentally unsustainable figment of the popular imagination.

I hope you find this interesting reading and that it helps you make better informed decisions.

 

Best Regards,

Dr Andrew Unterweger

MB BS, CFP®, Dip FP, Dip FNS, MFAA, AFA, SPAA, REA

 

 


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Standard Life Investments believes that while the “self-sustaining” economic recovery in the US will soon drive interest rates higher there, the Reserve Bank of Australia is unlikely to raise rates any time soon.

Standard Life Investments believes that while the “self-sustaining” economic recovery in the US will soon drive interest rates higher there, the Reserve Bank of Australia is unlikely to raise rates any time soon.

Sebastian Mackay, Standard Life Investments investment director and joint portfolio manager of the Absolute Return Global Bond Strategy, shared his thoughts last week with MortgageBusiness’s sister publication InvestorDaily.

According to Mr Mackay, Standard Life Investments’ central scenario is one of a weak global recovery rather than deflation, although he concedes a deflationary scenario is “not that unlikely”.

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Point Piper came in at number one ($5,596,397), followed by Centennial Park ($5,199,324), Vaucluse ($4,125,216), Bellevue Hill ($3,810,420) and Tamarama ($3,534,024) rounding out the top five.

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post sept 2015-10-01 at 8.36.53 pm

AUSTRALIA NAMED ‘WORLD’S GREENEST PROPERTY INDUSTRY’

Australia has again placed first in an international ranking of sustainability in real estate.

For the fifth year running, the region of Australia and New Zealand topped the annual survey, which is conducted by GRESB, a Dutch-based industry group.

Property companies in Australia and New Zealand achieved an average score of 69, which was well ahead of the other regions.

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CONFIDENCE GROWS, CAR SALES UP

By CommSec

Reserve Bank Board minutes: weekly consumer confidence; car sales

  • Consumer sentiment: the weekly ANZ/Roy Morgan consumer confidence rating rose by 0.6% last week to stand 0.6% higher than a year ago.
  • New vehicle sales: sales fell by 1.3% in July but were still up 3.7% on a year ago. The annual total of new vehicle sales hit a 19-month high and is 0.6% below record highs.
  • Reserve Bank Board minutes: Board members noted that the shift in the resources sector from investment to production “was being assisted by the depreciation of the exchange rate over recent months”.

What does it all mean?

Consumer confidence is stuck in a groove at present. That is far from negative as the current confidence reading is above both short and longer-term averages. Factors like the Aussie dollar, petrol prices, home prices and sharemarket fluctuations will be important in driving confidence in the future together with political influences. The greatest threat to consumer confidence is the negativity of major political parties.

Read more