15 common myths that are killing the wealth potential of the average Australian property investor

Nov 15, 2018 | Australian Property Investment, Think Different

There are many myths and false beliefs that you may be feeding yourself, that may be hindering your progress as a property investor. We are here to debunk some of these myths and help you make progress in seeing the property investment industry for the wealth for the opportunity that it really is.

Many of these myths are actually just excuses. Take these first seven, for example. With advice from the experts – like the highly qualified team at Aussie Property Guru, you’ll see that all these “excuses” disappear.

Myths About Property Investments That Could Be Holding You Back –

#1 You need to have a lot of money to make a lot of money.

#2 I Don’t Have Nearly Enough Money To Invest In Property.

#3 My job and pension will be more than enough for a comfortable retirement.

#4 I don’t have the brains to invest in property.

#5 Investing in property is way too complicated for me

#6 Property investment is full of unbeatable risks

#7 Understanding the timing of investment markets is too complicated

All of the above beliefs are destructive and keep you off the property investment ladder. It’s time to start believing in yourself and the legitimate profit opportunities that the property investment industry offers you if you team up with a top property investment expert.

And here are some more common myths:

#8 The rich have all the luck

In some cases this is true, but most of the time people have dedicated time and effort into choosing investments, getting expert advice and building their wealth.

#9 Diversification is a key to becoming rich

Ever heard of Jack of Trades yet Master of None? It is far better to focus on one investment and do it properly than to be dealing with tons of stocks and investments that you don’t understand.

#10 Paying off your house is essential

Oh is it? And what do you do with this asset once you’ve paid it off? Think about that for a moment.

#11 All the best property investments are already gone

New hot properties are coming onto the market every single day. Do you know where to look? If not, you should ask the professionals who know exactly where the best deals are to be found.

#12 I’ll have to do it all myself

No, you won’t. Why not get the help of a professional to ease the stress and give you support?

#13 One mistake can ruin everything

Life is about making mistakes. You can always make a comeback if you are willing to get up again. You’ll make fewer mistakes if you’re smart about finding the right property investment advisors.

#14 Debt is a no-no

Sometimes taking a loan can benefit you in the long run – and if you’re going to have debt – this is the best kind to have.

#15 I Can’t

This is the biggest hurdle to overcome! Start saying ‘I can!’ and choose an investment advisor carefully and you will!

Hopefully, the debunking of these myths will give you the confidence to make your first property investment! Aussie Property Guru has a top-class reputation for helping our clients grow their wealth with smart property purchases, so give us a call today.

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

May 17, 2017 | Property investing, stamp duty

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 1^st.

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.

2016 Investment Outlook and Australia’s property market implications

Jan 15, 2016 | Australian market, Australian property, Newsletter

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.”

Sydney property bubble to pop when rates rise, says HSBC

Wednesday, 11 Feb 2015 |

James Mitchell

· 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.

2016 Investment Outlook and Australia’s property market implications

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The New Normal – is this another illusion?

Sep 29, 2015 | Australian property, Interest Rates, Newsletter

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

RATES TO REMAIN LOW FOR ‘SEVERAL YEARS

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”.

Hot property: most expensive suburbs revealed

CoreLogic RP Data has revealed the suburbs with the highest median value around the country, with Sydney suburbs dominating the list.

The top five most expensive suburbs are in Sydney, which has 17 of the 20 listings.

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.

EASING CYCLE OVER FOR NOW

The Reserve Bank’s two-pronged monetary easing measures look to have come to an end but our central bankers will remain watchful of the currency, according to Goldman Sachs Asset Management executive director and global fixed income portfolio manager Sean Reynolds.

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.

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.

2016 Investment Outlook and Australia’s property market implications

Meet Dr Andrew Unterweger

Sydney property bubble to pop when rates rise, says HSBC

2016 Investment Outlook and Australia’s property market implications

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