November 2012 Newsletter

Welcome to our November newsletter

Just as Green Moon was a surprise winner on Melbourne Cup Day, the Reserve Bank’s decision to leave rates on hold at 3.25 per cent left many industry pundits shocked and surprised.

For the past six years, the RBA has been determined to take some of the limelight from Australia’s race of races by adjusting the cash rate each November.

This year however, they have broken tradition and seem happy to leave rates on hold – employing a ‘wait and see’ approach for the next few months.

Speaking of the decision, Reserve Bank governor, Glenn Stevens, pointed to early recovery signs in both the European debt crisis and Australia’s lacklustre housing market.

“Financial markets have responded positively over the past few months to signs of progress in addressing Europe’s financial problems, but expectations for further progress remain high,” Mr Stevens said.

“While investment in dwellings has been subdued for some time, over recent months there have been some indications of a prospective improvement.”

Given the economy’s slow response to earlier rate cuts, the RBA’s decision to ‘wait and see’ this month will give way for effects of last month’s rate reductions.

Recent research by RP Data has confirmed dwelling values are on the up, while more and more consumers are returning to the market.

“Dwelling values are 2.1 per cent higher than what they were at the end of May this year,” RP Data research director, Tim Lawless said.

“We have also seen a modest uptick in transaction volumes, which suggests that consumers are slowly responding to the previous rate cuts.”

The good news for our local economy keeps on coming, with building approvals in September climbing for the second consecutive month.

According to data from the Australian Bureau of Statistics, building approvals increased by 7.8 per cent in September. Moreover, the result took the number of approvals to 13,388 – the third highest monthly result in over twelve months.

The rental market continues to soar with new research suggesting it is in fact cheaper to own a home than to rent, based on the costs of rental increases and mortgage reductions.

RP Data found that in more than 350 towns and suburbs across Australia the cost of monthly mortgage repayments was cheaper than rental payments. This is sure to keep investment activity on the up over the coming months.

A steady economy and strong buying market has forced lenders to battle it out for your business. You can expect more generous mortgage products to make their way on to the market, and this could mean some serious savings for you and your family.

Looking to find out more about what all this means for you? Or want to discuss any of your financial concerns or aspirations? Give us a call today.

Sincerely, Nick Foale


Research secrets that could put you ahead of the pack

There is a wide range of FREE information available to all home buyers and investors – so long as you know where to look 

Whether you are looking to purchase a new home or your next investment property, sound research should always be your first point of call.

Traditional methods of research such as websites, magazines, news reports and company announcements are always a good place to start.

The nitty gritty statistical research can go a long way in helping you identify trends and possible investment opportunities.

However, those not familiar with number crunching can quickly find themselves facing “analysis paralysis” and miss out on an opportunity all together.

While the importance of traditional research methods cannot be overlooked, there are some clever alternative methods that could really kick-start your property hunt.

If you really want to gain an edge in the market, you may need to hit the road and get out there and speak to local residents, and observe the local area.

Ask neighbours how they feel about the area and how long they have lived there. You may be able to find out why the seller is moving, or of any developments that might be in the works.

As the fundamentals of smart property investing remain the same; type, location and demographics – there are a few things you should look to discover when chatting to the locals.

Infrastructure and development
Major council developments and infrastructure projects may seem like a good thing at first glance, but it is important to determine whether this is proactive or reactive work.

A big infrastructure boom in the area may not mean it is prime for investment – the growth may have already occurred and infrastructure is just catching up.

First impressions matter
Whether you are looking for a primary place of residence or a new investment property, the local demographics of the area are sure to sway your decision.

Be sure to observe the locals; note how they dress, the quality of their vehicles and their ‘community feel’.

Synthetic street appeal should also be noted. What kind of architecture surrounds the suburb, do the owners take pride in the appearance of their property?

This could identify the demographics of the potential renters and the capacity for rental increases in the future.

This may also reveal whether the area battles a high crime rate or social problems.

Some final pointers
Local real estate agents and property professionals are a great source of insider knowledge–much of which you wouldn’t discover alone.

Remember; property investment isn’t rocket science but it does take a bit of research. If you can think outside the box and use information others can’t find, or don’t spend the time finding, you will be ahead of the pack every time.


Is a self–managed super fund a good idea?

If you are looking for greater control over your super, than perhaps a self-managed super fund is right for you

Faced by an unstable economy, many investors have turned their attention to self–managed super funds in the hope of financial stability.

So, what are the benefits of managing your own super fund and is this the best approach for you?

Self–managed super funds (SMSFs) allow up to four family members or business partners to pool their money to make investment decisions.

Each member must be a trustee and take responsibility to ensure the fund is managed appropriately.

To decide whether a SMSF is a good idea for you, you need to weigh up the benefits and resulting costs.

The main benefits of a SMSF are control and choice.

As a trustee you have total control over investment strategies and your money. You also have greater choice in regards to the investment opportunities and the flexibility surrounding your fund.

By pooling your super with family members or business partners in a SMSF you may be able to save money to invest more quickly, potentially reaching your investment goals sooner.

Although SMSFs allow for greater control of your money, there are extra costs associated with this kind of super fund. As a trustee you will have added responsibilities and legal obligations that are avoided when you have someone else managing your super fund.

You will need to weigh up the costs of having your fund professionally audited each year, plus ongoing administration costs. You should consider whether the benefits outweigh these additional costs.

Most financial experts suggest that to make the most of your super fund you should have at least $200,000 in savings and some financial experience. It would also be beneficial to consult a SMSF specialist before making any decisions.

If you are thinking about setting up a SMSF because you are dissatisfied with your current super fund, it may be wise to consider switching funds prior to setting up your own.

You should consider fees, investment options, extra benefits and insurance options. Be sure to factor in your superannuation goals and retirement plans when making any investment decisions.

Your superannuation is an important investment, which will hopefully ensure you have a comfortable standard of living once you retire.

To ensure you have the best suited retirement plan you should seek professional advice.


Summer checklist

Don?t let those unwanted household chores ruin your summer dreams. With a simple proactive approach, you?ll have more time in the sun and less time inside fixing the house

There are some household chores that we would rather leave for tomorrow.

You know the ones – those little home DIY jobs that often require no more than a few minutes but never seem to get done.

Putting off a few jobs here and there is no big deal. However, you’ll be sure to discover that over the year those odd jobs have accrued into some seriously hard work.

With the summer fast approaching and the holidays just around the corner, it’s time to kick yourself into gear and finish off those unwanted projects.

Goal setting
The trick to achieving timely results is to set a realistic target from the outset of the project.

There is nothing more disheartening than falling short of achieving what you set out to do. So, be sure that all goals and targets are realistic, timely and measureable.

Prioritising your projects from most important to least important is the best way to ensure that you are satisfied with all your hard work.

Be prepared
While the Christmas break is a fantastic time to tidy up some loose ends around the house, it is quite possibly the worst time of year to go shopping.

As most of us leave our Christmas shopping to those final few weeks, your local shopping complex is sure to become a nightmare.

Buying all your resources now will not only save you time, but you will also avoid the headache of Christmas crowds.

It is also quite common for several smaller outlets and privately owned stores to close up over the Christmas break. Therefore, a golden rule for Christmas cleaning is to ensure that you are well prepared before the busy months.

Stay focused 
Trying to remain focused on a job you would rather not do can be difficult. But there are a few ways to help you stay on track.

A handy tip to remaining motivated is to set several smaller tasks. As nothing is more disappointing than missing your goal, having smaller and more achievable tasks should keep you on the right track.

It’s simple – the more you achieve, the better you feel. Best of all, you are still working towards one big goal.