Investing inside Superannuation

Recent reports reveal self-managed superannuation funds (SMSF’s) represent up to half of real estate sales in some markets. Data from the Australian Taxation Office displays a significant increase in residential real estate assets held by SMSF’s. Figures have started from $10.825 billion in June 2009 and increased to $14.868 billion in March 2012. That is an average increase of more than $1 billion dollars per annum.

Since 2007, SMSF’s have been allowed to borrow funds to acquire real estate. Subsequently we have encouraged our clients to consider using this vehicle to buy quality, well-located real estate investments.

You can reap the benefits with long-term capital growth and income. If you use a DIY super structure it is possible to buy a house or apartment with pre-tax dollars. Then, if the SMSF holds the property until it is in pension phase, any capital gains are tax-free.

Investing in real estate using a SMSF may not suit everyone. Restrictions on what you can do are onerous and compliance can be complex. We urge people considering this method of investing to seek advice from an accountant or financial planner.

Interest Rates

RBA Announces Cash Rate Unchanged at 3.5 per cent

September 4, 2012

At its meeting today, the Board decided to leave the cash rate unchanged at 3.50 per cent.

Having picked up in the early months of 2012, growth in the world economy has since softened. Current assessments are that global GDP will grow at no more than average pace in 2012, with risks to the outlook still on the downside. Economic activity in Europe is contracting, while growth in the United States is only modest. Growth in China remained reasonably robust in the first half of this year, albeit well below the exceptional pace seen in recent years. Some recent indicators have been weaker, which has added to uncertainty about near-term growth. Around Asia generally, growth is being dampened by the more moderate Chinese expansion and the weakness in Europe.

read more from the Govenors Statement here

The Economy

Aussie banks the world’s most profitable

August 1, 2012

An international body has found Australian Banks are the most profitable in the world, but Aussie banks have claimed higher corporate taxes meant they are not as profitable as they appear.

The Bank for International Settlements has released data showing Australia’s banking system tops the list for pre-tax profitability.

The pre-tax profits of the ‘big-four’ accounted for 1.9% of assets, the next closest banking system in terms of profitability, Canada saw 1.08% pre-tax profits while the US ranked third with 0.93% pre-tax profits.

The performance of our Banks over the last year has helped to maintain confidence in Australia’s economy and wider financial system.

Interest Rates

Reserve cut Rates

May 2, 2012

The RBA have decided to cut rates by a whole 50 basis points! taking the offical cash rate down to 3.75%. This was decided at their Meeting on 1st May 2012.

This is the lowest figure we have seen since March 2010.

Read the governors statement here:

Property Duties|Property Investing

$10,000 QLD building boost – only until April 30th 2012!

April 18, 2012

The $10,000 Grant that the Queenland Government are offering for those buying or building a new home under $600,000 is ending on 30th April 12.

If you are in the market to buy your own home or an investment property this is a great way to get a head start with your property portfolio.

Many clients, particularly investors who have secured a house and land package with the $10,000 government grant use the funds to pay down their non-deductible debt such as their home loan or credit card, while claiming all the costs associated with the build as investment debt.

There are many incentives to get into the housing market, just think how long it would take you to save $10,000 after tax?

If you think you may qualify get in contact with us to find out more… but be quick!

Interest Rates

Official Cash Rate on Hold

March 7, 2012

The Reserve Bank opted to keep the official cash rate steady at its March meeting, leaving the door open for future easing should it be required in the future.

Some economists are saying rates will be on hold for as long as until the end of year!

The European scene has settled down, it’s far from being resolved but it has settled and the panic has eased. Financial market conditions are under control as too are the inflation figures. Given this, the RBA had no strong evidence to cut rates further to the last 2 cuts late last year.

Some sluggishness is starting to appear in employment, and there is no doubt we need a ‘shot in the arm’ by way of a rate cut to help boost business which is still needing some stimulus. So we will have to see what will happen over the coming months.

Property Investing

Granny Flat Additions to Increase Rents

February 29, 2012

Property Focus Update

What’s happening in the Major Capital Cities with property values. PLUS Granny Flat Additions to improve the rental return of your property in a flat market.

Interest Rates

Interest Rates Remain Unchanged!

February 7, 2012

I’m sure this is not what you were expecting to hear! It was certainly a surprise to many that were banking on a rate cut today by the Reserve Bank of Australia.

7th February 2012 – The cash rate remains unchanged at 4.25 per cent.

Information becoming available since the December meeting confirms that economic conditions in Europe were weakening late last year, with risks still skewed to the downside. Reflecting this, most forecasters have lowered their forecasts for world GDP growth this year to a below trend pace. That said, recent data from the United States suggest a continuing moderate expansion after a soft patch in mid 2011.

Growth in China….read the full statement here

Government and Legislation

Home Builders Bonus

January 25, 2012

If you’ve been holding back waiting for the right time to purchase a new property or build a new home, then this could be it!

One of the biggest costs when buying real estate is Government Stamp Duty. Not anymore… thanks to the Home Builders Bonus Scheme introduced by the NSW Government.

The best part about this Scheme is that it’s open to everyone, including Investors who purchase a new house or apartment. The purchase can be made in your own name, or in the name of any entity, including a Company or Trust structure.

You will pay ZERO Stamp Duty for new homes up to $600,000 purchase price, or $400,000 for vacant land. For homes already under construction, a 25% discount will be applied.

As an investor, there are innumerable benefits of buying ‘new property’ whether it be an ‘off-the-plan’ apartment or vacant land so long as construction of a house commences within 26 weeks of the land settlement date.

A new home is deemed to be a home that has not been previously occupied or sold as a place of residence, and includes a home that is a substantially renovated home.

To be eligible, you will need to have entered into the contract prior to 1 July 2012 (that’s less than 6 months away) and apply for the Home Builders Bonus exemption within 3 months of exchanging the contract.

If you have already entered into a contract of this nature, you may already be eligible so long as you entered into the contract after 1 July 2010 and apply within 3 months of the date of that contract.

Home Builders Bonus Fact Sheet

Home Builders Bonus_Application Form

For further information, check out the FAQ’s

If you have any questions contact us here

Interest Rates|The Economy

The Economy and the Year Ahead

January 23, 2012

With so many mixed messages going around about the state of the economy, we thought it was time to look at what the statistics tell us. Here’s a round-up of the latest research on the Australian property market: (sourced from SQM Research and Genworth’s Home Grown Mortgage Industry Perspectives report)

Australians remain better placed to cope with their debt levels than borrowers in many other countries. 45% of Australian borrowers are overpaying their mortgage, compared to an eight-country average of 26% (across Canada, India, Ireland, Italy, Mexico, the UK and the US).

The typical borrower in 2012 is expected to be refinancers and upgraders, with first homebuyers and investors remaining cautious.

In the past year, WA has seen the largest growth in lending, then QLD, followed by VIC and NSW, with SA and TAS having seen a drop in home lending.

Of the capital cities, Sydney stands out as a being on track for house price growth of between zero and 4 per cent by the end of 2012, factoring in no interest rate change.

The statistics show us it’s not all doom and gloom, with the health of the property market varying from suburb-to-suburb and state-to-state.

Our housing markets ended 2011 in a better position to where they started and John Edwards from Residex is confident that the year ahead will be better for residential property owners compared to last year.

Australians are much better placed than many other people in the world and the adjustment period we have recently seen, with a clear upswing in our markets in the last few months, means that there is a reasonable chance that our markets will advance positively, albeit by a relatively small amount, in the current year.

Additionally, in this situation there will be bargains for the astute house hunter along with quality growth in many suburbs.

The last year has seen many homebuyers and investors sit on the sidelines and property prices reduce with most concerned about the global financial markets. Although some industry experts predicted a property meltdown, our markets have remained intact and many savvy buyers have even been rewarded with good buying.

In these times, we continue to reinforce the importance of doing your research to buy good quality property that will stand the test of time. Nobody can predict the future markets with exact precision; however you can be sure to weather market movements with quality property.

As your mortgage broker we would be happy to speak with you about any lending issues and or property decisions you may be concerned about for the coming year.

SMSF’s Represent Half of Real Estate Sales

RBA Announces Cash Rate Unchanged at 3.5 per cent

Aussie banks the world’s most profitable

Reserve cut Rates

$10,000 QLD building boost – only until April 30th 2012!

Official Cash Rate on Hold

Granny Flat Additions to Increase Rents

Property Focus Update

Interest Rates Remain Unchanged!

Home Builders Bonus

The Economy and the Year Ahead

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PO BOX 3080, Burleigh Town

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Property Focus Update

Services

Privacy

Contact:

PO BOX 3080, Burleigh Town