Newcastle the Hot-Spot
Monday, 23 January 2012
Source - The Sunday Telegraph
NEWCASTLE has been branded NSW's most underrated property market.
Most Newcastle suburbs saw property prices jump in the past 12 months, with about 30 per cent recording rises in the double digits, while the Hunter Valley was the most active market in NSW, according to a survey on best places to invest in real estate by hotspotting.com.au.
Branxton showed the strongest capital gains, followed by Singleton, Cessnock and Denman.
"Newcastle presents as a viable affordable alternative to Sydney," hotspotting founder Terry Ryder said.
Brisbane Unit Values Outperform Houses Over The Long Haul
Monday, 19 December 2011
Source - The Courier Mail
Units continue to outperform houses in Brisbane, according to the latest market research from property analysts RP Data.
RP Data analyst Cameron Kusher said Brisbane house values had increased at an annual rate of 8.2 per cent on average over the past decade compared to annual growth of 9.2 per cent on average for units.
"The superior performance of units is partly due to the fact that values were lower to start with but it also indicates that medium and high-density housing is growing in popularity," he said.
He attributed the popularity of units to price and rental returns.
"Units offer owners the opportunity to live in locations of the city in which they would otherwise not be able to own a detached house," Mr Kusher said.
"As cities continue to grow, location becomes increasingly important.
"And, from an investment perspective, they offer superior rental returns. The gross rental yield for a Brisbane house is currently recorded at 4.7 per cent compared to 5.3 per cent for Brisbane units."
The level of vendor discounting for houses is also greater - 8.3 per cent compared with 6.8 per cent for units.
"Discounting levels for houses are higher than at the same time last year, however unit discounting is slightly improved from the 7 per cent 12 months ago," Mr Kusher said.
"Despite the inflated discount levels, both measures are below their recent peaks of 8.7 per cent and 7.8 per cent respectively."
The average time it takes to sell a Brisbane property is also at relatively high levels.
Of those properties that sold in October, houses had been on the market for an average of 61 days and units 60 days. Both measures were higher than they were 12 months ago, but both had improved from their respective recent peaks of 66 days for houses and 61 days for units.
Mr Kusher said the data was for October and therefore did not take into account the Reserve Bank cut in interest rates by 25 basis points on Melbourne Cup day.
"It will be interesting to see what effect the cut has on the performance of the Brisbane housing market," Mr Kusher said. "I believe that the recent decline in home values is making Brisbane housing more attractive, especially to those buyers in Sydney and Melbourne."
"Based on median selling prices over the past three months, Brisbane house prices are 23 per cent lower than Sydney prices and 12 per cent lower than Melbourne prices.
"For units, Brisbane units are 21 per cent cheaper than Sydney units and 15 per cent more affordable than Melbourne units."
By Michelle Collins
$1.5 Billion Huntlee Proposal Back On The Map
Thursday, 8 December 2011
Source - Newcastle Herald
THE $1.5 billion Huntlee new town proposal is back, with a court this morning effectively reinstating its rezoning for more than 7000 homes and employment lands.
The NSW Court of Appeal has today upheld an appeal by the projects developers against the earlier decision of the NSW Land and Environment Court, which invalidated the rezoning of land near Branxton.
The project site was gazetted in December last year as state significant under the former Labor state government, but the Sweetwater Action Group challenged the rezoning in the Land and Environment Court.
Todays decision overturns the earlier ruling in favour of the Sweetwater group.
Huntlee developers LWP Property Group has welcomed the latest decision and said it would enable the assessment of the projects first stage to proceed.
By Michelle Harris
Nathan Tinkler Has Ambitious Proposal To Develop Coal Terminal In Newcastle
Wednesday, 30 November 2011
Source - The Australian
(Photo on right: Hunter Ports' Mark Rowsthorn and Steve van Barneveld at the Tinkler Group's offices in Sydney yesterday)
BILLIONAIRE Nathan Tinkler has raised an ambitious proposal to develop a $2.5 billion coal terminal in Newcastle, delivering the plan to the state government in the hope of winning support to almost double shipments from the world's largest coal export harbour.
The proposal is for a 100-million-tonne-per-annum coal terminal, which Tinkler Group subsidiary Hunter Ports hails as a "state-of-the-art" development offering a fresh approach to the coal export hub.
Former Asciano boss Mark Rowsthorn, who was appointed by Mr Tinkler to head ports and logistics for the Tinkler Group, said the plan would generate about $12 billion a year in extra coal exports and related revenue, including NSW government royalties of up to $1bn a year, once the terminal was operational.
"Our proposed location would see the terminal built more cost-effectively than alternative options and with a shorter construction stage," said Mr Rowsthorn.
"The proposed site does not require major dredging or carve-outs of the river banks and land reclamation."
The Port Waratah coal facility at Newcastle already has plans for a $5bn expansion to add 120 million tonnes of capacity.
The Hunter Ports' proposal, to be built on the former BHP steelworks site at Newcastle Port, includes a rail realignment which would remove an estimated 90 per cent of coal trains from residential areas and transform the surrounding precincts.
The group also outlined how it would generate about $12bn in coal export and related revenue and up to $1bn annually in royalties for the NSW government.
The $2.5bn project, which could be exporting by 2015 if it were approved, would be funded by equity partners and debt funding. Mr Rowsthorn said Japanese trading houses and Chinese parties had shown interest in providing "equity backing".
Managing director of Hunter Ports Steve van Barneveld said the group was encouraging the state to consider the merits of the plan, which would create 800 jobs during construction and 1600 jobs during operations. "We are reliant on the state having a re-think on what has previously been considered," he said.
It was time to raise the bar and consider the merits of an alternative proposal.
"The opportunity here is first-class and it really is stepping up," he said. "This is the smartest location for the next coal terminal in Newcastle that delivers fundamental benefits to the town as well as security to the industry."
Mr Rowsthorn said the Hunter Ports' proposal was part of Mr Tinkler's wider plans. The mining billionaire has a majority stake in Aston Resources, which is developing the Maules Creek project in NSW. "This is one of a number of infrastructure projects Tinkler wants to embark on, including the Abbott Point expansion," Mr Rowsthorn said.
Aston Resources has an allocation at Port Waratah but it has previously argued to the competition regulator that there needed to be more transparency in port allocations, complaining capacity was being hoarded by incumbent miners such as Xstrata and Rio Tinto.
Mr van Barneveld said it was likely Aston would apply for capacity at the multi-user port if it were to be approved.
By Sarah-Jane Tasker
Ten Ways To Increase Your Borrowing Capacity
Friday, 4 November 2011
Source - Australian Property Investor Magazine
Banks have progressively tightened their lending criteria in the wake of the GFC, frustrating investors who can't source finance for their next purchase. Here API investigates 10 ways to break through the credit ceiling and increase your serviceability limit.
Since the mid nineties Australian mortgage providers have operated under regulatory guidelines designed to encourage responsible lending. One aspect of these guidelines has been the 'Ability to Repay Test', commonly referred to as 'serviceability'.
"Put simply, financial institutions must demonstrate they're satisfied that borrowers can afford to repay their debt," Smartline Personal Mortgage Advisers managing director Chris Acret explains. "If lenders don't demonstrate their satisfaction to that end, they risk their right to foreclose on a client in the event of default."
Acret says lenders interpret the Ability to Repay Test in different ways and, contrary to popular opinion, the loan amounts lenders deem to be responsible also vary greatly.
"In fact, a recent enquiry made by one of our advisers determined - from a range of 22 mortgage lenders - that a single borrower on a gross annual salary of $60,000 and a credit card liability of $5000 was able to borrow approximately $277,000 with the most frugal lender and approximately $372,000 with the most expansive lender," he says. "This demonstrates the range within which lenders interpret a borrowers ability to repay - and that it pays to shop around."
Since the global financial crisis lenders have tightened their Ability to Repay calculations. "However, while lenders have been making moves to lend us less money, borrowers are faced with growing property prices in every capital city," Acret says.
These changes don't mean that securing the right loan for your needs is an insurmountable task, but it's more challenging and time consuming to wade through the policies, loan types, rates and lenders on offer.
With that in mind, API asked a few experts in the finance field to come up with effective strategies for investors to consider in their mission to boost their borrowing capacity.
1. Consolidate unsecured debts into your mortgage
"Typically, unsecured debts such as personal loans and credit cards have short repayment terms that force you to reduce your debts with expensive monthly repayments," says Acret. "These high repayment levels impact the bank's Ability to Repay calculation for your mortgage because unsecured debt limits the amount of uncommitted funds you have available to repay the proposed mortgage."
Mortgage Choice senior corporate affairs manager Kristy Sheppard says rolling your personal loan or other debts into your mortgage can help your cause because they then won't show as other financial commitments. "However, this will stretch the debt over the life of your home loan term, attracting more interest in the long run," she warns.
2. Reduce excess credit, especially credit cards
Acret says if you have any unused credit cards or credit cards with limits that exceed your need for credit, then it makes sense to either cancel the limits or reduce the limits down to a manageable level.
"When most lenders assess your ability to repay a mortgage, they assume that your credit card will be fully drawn up to its limit," he says.
"Given most credit card providers insist that three per cent of the debt amount be repaid every month, the unused limits can be detrimental to your mortgage borrowing capacity. Every $1000 in credit card limits adds $30 per month to your monthly expenses and reduces your ability to borrow."
Canstar Cannex senior financial analyst Harry Senlitonga suggests closing all credit card accounts except one.
"It may sound extreme but lenders will look at the credit limit on your card or cards as a liability you may have in the future, even if you don't owe a solitary cent currently," he says.
"For instance, if you have a card with an $8000 limit and another with a $4000 limit, a lender will write down $12,000 as a debt against your name. Reducing your credit card limit by $10,000 may increase your calculated monthly disposable income by $300, which has the effect of having a net pay rise of $3600 per annum."
3. Keep financial records up to date
One of the most common reasons borrowers find themselves well short of their anticipated borrowing levels is that they don't have up to date financial information to prove their income levels to the lender.
"Simply completing your tax returns on time can help your mortgage adviser secure the loan you're after," says Acret.
Senlitonga says it's also important to show your overall income to your lender, not just your last two payslips.
"In many cases, the last two payslips required by a lender may not give a clear picture of your true income," he says. "In the situation where you may have a low base salary but high bonus payments, providing your last two payslips could be a disadvantage. Most lenders will be able to provide an alternative way to assess your income which can be based on the group certificate from your employer or even notice of assessment from the Australian Tax Office."
"Concentrating on the bigger picture of annual income rather than the most recent payslips will help."
4. Select the right loan product
According to Smartline, even within one financial institution there can be a big difference in borrowing capacity levels based on the product you select. "Product features such as interest-only repayments, fixed rates, variable rate discounts and lines of credit can all impact how much the lender will offer," says Acret.
5. Be aware that income type is treated differently by nearly every lender
Lenders can be very selective when it comes to the type of income they include in their repayment capacity calculations, says Acret. Some income types may be excluded altogether by one lender and fully included by another.
According to Acret, "Almost every lender treats income derived from dividends, second jobs, child maintenance payments, company profits, bonuses, commissions, government benefits, annuities and rents differently. Navigating your way around this maze is very difficult and every dollar that a lender accepts improves your borrowing capacity."
6. Shop around
It may sound obvious but paying a low interest rate will save you hundreds of dollars on annual loan repayment commitments and thus increase your initial affordability.
"A decrease of one per cent on your home loan rate may free up your cash flow by $260 a month on a $400,000 loan," says Senlitonga. "This has the same effect of getting a net pay rise of $3120 per annum."
7. Split your liabilities with your partner
If you're planning to buy a property under your name only, you can split your expenses on paper with your partner, says Senlitonga.
"For example, two children as dependants may not be counted as your dependants if you can prove that your partner does and will continue to provide for them financially," he says.
8. Use your properties as cross collateral
Using your property as cross collateral, or cross security, means you provide an existing property as a security to buy another property.
"It's increasingly requested by lenders because it minimises their risk of lending money against one single property," says Senlitonga. "In other words, it's a form of diversification for a lender."
But be warned, there are pros and cons with this strategy.
"The good thing is it may increase your serviceability to the extent you may borrow at a higher loan-to-value ratio. This may also save you money on lenders mortgage insurance when you borrow above the lender's threshold."
"The bad thing is, in the event of you being unable to meet the loan repayments, the lender may repossess the securities, which could put your properties at risk."
Another disadvantage with this option is that it can restrict your ability to refinance with another lender, so make sure you understand all the implications.
9. Extend the term of your loan
The longer the loan, the less the monthly repayments.
"Thirty-year loans for property are considered normal but not many people realise that you can now get 40-year loans in Australia," says Senlitonga. "Extending your loan term from 30 to 40 years will reduce your monthly repayments by $184 on a $400,000 loan."
"There are more than a handful of institutions offering these extended term loans and, in the right circumstances, a 40-year loan can boost loan serviceability."
10. Save, save, save
Build up as much deposit or equity as possible. "If you're using a deposit to secure your loan, be sure to have saved consecutively over at least three to six months, depending on the lender," Kristy Sheppard says.
Written by Eynas Brodie - Editor of Australian Property Investor magazine.
Green Light For Expanded Maitland Mall
Friday, 21 October 2011
Source - ABC News 14 October 2011
Maitland Mayor Peter Blackmore says the future looks bright for the region's youth after a $350-million shopping mall expansion project was approved at last night's council meeting.
The Stockland Green Hills redevelopment will create 1,300 jobs during its construction phase and the same number of permanent jobs.
Councillor Blackmore says construction will start in the new year and he is hoping the new shopping complex will encourage young people to stay in the area instead of moving to larger cities.
"Once you have a major development such as Stocklands come into Maitland, it will bring other developments with it," he said.
"I'm very very confident that the future looks very rosy for young people that will be looking for suitable occupations, whether it is in the building game, whether it's in retail."
And, he is satisfied the new development will not cause major road congestion, saying traffic management plans were an important part of the planning process.
"So we have been satisfied now, as has the RTA, that the development application is going to provide a smooth flow of traffic.
"Even though you can expect to see more cars coming to this centre."
How Debt Can Make You Money
Wednesday, 12 October 2011
Source - Australian Property Investor Magazine
Most people believe 'debt' is a dirty word. It's something to be avoided at all costs or, if it's necessary for some reason such as buying a home, to be paid down as quickly as possible.
But what if having debt meant you actually made more money? What if you could be paid to borrow from the banks? Well, you can - and I'm going to tell you how it works.
Many Australians are starting to realise what seasoned property investors already know - income-producing real estate is one of the best ways to generate long-term wealth.
Truly savvy investors also realise that the combined effects of inflation and the income generated by investment properties actually allows you to get paid to borrow money.
Essentially, inflation means that the value of a dollar diminishes over time. However, you can protect yourself against the dollar's declining value by investing in high quality, long-term debt associated with an income-producing property.
Let me explain using an example. Assume you bought a property in 1980 and at the time the dollar was actually worth its full value - $1.00. However 30 years later, that same dollar is now only worth $0.40 due to inflation, meaning the purchasing power of that dollar has decreased.
While the dollars value has gone down though, the principal balance on your long-term property investment debt is not adjusted in line with inflation at any point.
In other words, by paying down your debt with increasingly cheaper dollars than those you originally borrowed you end up saving yourself a substantial amount of money each year.
Let's dig a bit deeper though and assume you buy an income-producing property worth $1 million with a mortgage of $800,000 that requires interest-only repayments.
After the first year, if inflation was sitting at an average level of three per cent, your loan balance of $800,000 is suddenly only worth $776,000 in real dollars. In effect, this means you just got paid $24,000 thanks to inflation.
Taking this scenario further, 10 years from when you initially took out your mortgage - assuming the governments floated inflation level of three per cent is applied every year during that period - your $800,000 loan would only be worth $590,000.
If you think that's impressive, keep in mind that we've often seen inflation tracking much higher than three per cent and in some instances, according to economists, its been as high as five per cent in most recent times.
From this perspective, debt is not a necessarily evil. In fact, long-term debt can be downright profitable if you use it the right way - to purchase income-producing property that increases over time, even as your mortgage shrinks through the miracle of inflation.
By Rolf Schaefer
Nearly 50pc of property prices double
Thursday, 29 September 2011
Source - Smart Property Investment Magazine
Property remains a sound investment, with almost 50 per cent of properties now worth twice what the owners paid for them.
According to RP Data's latest Equity Report, over the five years to June 2011 capital city home values have increased by about 30 per cent, providing a significant wealth boost to most home owners during this period.
The headline result from the equity analysis reveals that only 3.7 per cent of Australian homes are currently valued at a lower amount than the price at which they were purchased.
At the other end of the spectrum, about 45 per cent of Australian homes are worth more than twice what their owners originally purchased them for.
There is some variation between regions, with areas that have recorded a more severe downturn in home values in recent times now recording higher proportions of homes in negative equity.
Northern Queensland and the South Eastern region of Western Australia are showing more than 10 per cent of dwellings to be worth less now than the price at which the home was originally purchased.
RP Data research director Tim Lawless said the findings also point to the fact that the length of tenure has a large impact on equity accumulation.
"As would be expected, homes held for a longer time frame have accumulated more equity than those held for a shorter amount of time," he said.
"Australia's residential housing market is worth an estimated $4.56 trillion; more than three-and-a-half times the value of the Australian equities market which has a market capitalisation of $1.3 trillion."
By Phillip Tarrant
Hunter Region A Good Investment
Tuesday, 27 September 2011
Source - Smart Property Investment Magazine
Property experts have flagged the Hunter Region of NSW as a prime investment area.
The region has become victim to the nation's housing shortage as a lack of rental properties has put pressure on agents and created an ongoing rental war between tenants.
The Hunter has seen a surge in population in recent years on the back of the resources boom and a $1.7 billion investment in infrastructure, creating hundreds of jobs for both local and new residents.
"Everything about this region seems to be moving forward. Its population has recorded the largest increases of any NSW region outside Sydney in recent years," Hotspotting.com.au founder Terry Ryder said.
"Towns such as Muswellbrook, Maitland and Singleton have strong property markets at a time when many city markets are flat, because of the strength of economic activity in the Hunter region," Mr Ryder said.
"Throughout this region, population growth, jobs creation, infrastructure development and business, generally are all powering," he said.
BIS Shrapnel, expects median house prices to rise a further 18 per cent by 2014.
By: James Mitchell
Why Rents Are Likely To Increase
Friday, 2 September 2011
Source - Australian Property Investor Magazine
There's always been the great debate between capital growth and rental yield. Its often been argued that the higher the capital growth, the lower the yield, and the lower the capital growth, the higher the yield. But given the current economic climate, it's difficult to know which one investors should be focusing on.
While capital cities haven't delivered great gains of late, rents are likely to increase across the board, even for those who still prefer to buy in a capital city, according to Jane Slack-Smith of Investors Choice.
"Affordability is going to be the key driver," she says.
"That will mean we're going to see a move from capital growth being a fundamental of property investors' purchasing criteria to seeing more of an importance on yield. We'll see an increase in yield, mainly on the fact that people can't afford to buy their own property. They'll need to rent so there will be an increase in demand."
Slack-Smith also believes it's becoming more common for people to buy investment properties in cheaper areas, while they continue to rent in capital cities.
On the other hand, author and property millionaire Jan Somers says rental yields in capital cities are actually falling over time, but investors should do their research before they buy a property with a higher rental yield.
"In general, they won't have a very good capital growth,' she says.
"When you have high yield it's usually high maintenance and high turnover."
Still confused?
Terry Ryder of hotspotting.com.au argues plenty of areas around Australia are increasing in value - the problem is that investors are looking in the wrong spots.
"The general media line is that prices are flat or falling, but they're talking about capital cities," he says.
"They're ignoring the regions where prices are growing quite strongly."
He lists Gladstone, the Surat Basin, Newcastle and Hunter Valley as the strong performers and says these areas will have both growth and increasing rental yield, as more people move into the areas. He also likes Bendigo and Ballarat in Victoria and Port Augusta and Whyalla in South Australia.
"People should always look for good returns," he says.
"If you can get beyond the fixation of a capital city and buy in the right region, you'll get strong capital growth over the medium to long term and the rent at least pays for the property."
Housing Shortage Update
Friday, 2 September 2011
Source (AFR Pg. 6) 02/09/11
According to the Housing Industry Association, Australia will face a housing shortage of more than 500,000 dwellings by 2020.
NSW is predicted to be the worst affected state, with a shortfall of 155,700 dwellings by 2020, followed by Western Australia with a deficit of 112,000 dwellings, 104,200 shortfall in Victoria and 91,800 in Queensland.
It is predicted Australia will require 1.6 million new homes over the next nine years.
Twenty local government areas with the largest projected housing shortfalls are in Western Australia (7), Queensland (6), NSW (5) and NT (2).
Job Markets Cools As Activity Dries Up
Tuesday, 16 August 2011
Source www.PaidOnExchange.com.au
Labour force
- The unemployment rate rose from 4.9 per cent to 5.1 per cent in July. The participation rate held steady at 65.6 per cent. The working age population rose by 15,800.
- Employment fell by 100 people in July. Economists had tipped job gains of around 10,000. But the June result was revised lower to show job gains of 18,200 (previously showed job gains of 23,500).
- Full-time employment fell by 22,200 in July and part-time jobs rose by 22,100.
- Average hours worked rose 0.2 per cent in July after rising by 0.6 per cent in June. The number of hours worked is up 2.6 per cent on a year ago.
- Across the states and territories unemployment rates in July were: NSW 5.2 per cent (5.2 per cent in June); Victoria 5.1 per cent (4.6 per cent); Queensland 5.6 per cent (5.2 per cent); South Australia 5.3 per cent (5.1 per cent); Western Australia 4.0 per cent (4.2 per cent); Tasmania 5.2 per cent (5.5 per cent); Northern Territory 4.2 per cent (3.9 per cent); ACT 4.0 per cent (4.0 per cent).
- NSW led the job gains in July (up 19,700) followed by Tasmania (up 1,800) and Queensland (up 800). Victoria the job losses (down by 20,700), followed by South Australia (down 1,700), Western Australia (down 1,500), Northern Territory (down 800 in trend terms), and ACT (down 400 in trend terms).
What does it all mean?
- There are clear signs that the Aussie economy is fast losing momentum. Jobs growth is now stagnant adding to data showing sluggish retail spending, a weak housing market and lacklustre activity in manufacturing, services and construction sectors.
- Employment growth has slowed since late last year to a more sustainable rate while the jobless rate has picked up for the first time in 10 months. In fact employment growth is now at 19-month lows. In fact even if you have a look at a longer time frame, since the start of the year jobs growth has averaged a meagre 5,900 people a month - a far cry from the average 30,200 jobs that was created each month in 2010.
- The latest result is also consistent with the anecdotal evidence we are hearing from businesses outside the mining sector. Conditions are tough, and the lack of consumer spending and inherent weakness in the housing sector is filtering through to other parts of the economy. And over the next few months it is likely that businesses will remain cautious and as such hiring intentions will be curtailed.
- The rapid fire rate hikes and sluggish consumer activity is starting to show cracks in the labour market data. More and more businesses are telling us that conditions are tougher now than at the height of the global financial crisis and earlier this week the NAB business survey highlighted the weakness in business trading conditions. Profitability is being squeezed and forward orders are being pared back - all a clear sign that businesses are finding times tough.
- Reserve Bank forecasts have indicated that job creation should slow - it has - effectively ensuring conditions are more balanced in the labour market. The key question is what happens from here. While businesses are likely to pull back hiring plans due to the uncertain environment, it is unlikely that significant job losses are around the corner.
- The latest result cements our view that the Reserve Bank remains on the interest rate sidelines in the midterm. Importantly a case for a rate cut has yet to be proven. The Reserve Bank is unlikely to cut rates in an environment with such serious market volatility. In addition as the central bank has continued to point out the strength of the Chinese economy remains sound - ensuring that commodity prices are healthy and the boost to the terms of trade remains intact.
What do the figures show?
Labour force
- Employment fell 100 people in July. Economists had tipped job gains of around 10,000. The June result was revised to show job go of 18,200 (previously job gains of 23,500). Full-time employment fell by 22,200 in July and part-time jobs rose by 22,100.
- The annual employment growth rate eased from 2.0 per cent to 1.7 per cent - marking the weakest growth rate in 19 months. The unemployment rate rose from 4.9 per cent to 5.1 per cent - marking the first rise in 10 months. The participation rate held steady at 65.5 per cent.
- Average hours worked rose 0.2 per cent in July after rising by a 0.6 per cent in June. Over the year average hours worked rose by 2.6 per cent.
- Across the states and territories unemployment rates in July were: NSW 5.2 per cent (5.2 per cent in June); Victoria 5.1 per cent (4.6 per cent); Queensland 5.6 per cent (5.2 per cent); South Australia 5.3 per cent (5.1 per cent); Western Australia 4.0 per cent (4.2 per cent); Tasmania 5.2 per cent (5.5 per cent); Northern Territory 4.2 per cent (3.9 per cent); ACT 4.0 per cent (4.0 per cent).
- NSW led the job gains in July (up 19,700) followed by Tasmania (up 1,800) and Queensland (up 800). Victoria the job losses (down by 20,700), followed by South Australia (down 1,700), Western Australia (down 1,500), Northern Territory (down 800 in trend terms), and ACT (down 400 in trend terms
- The working age population rose by 15,800 in July after lifting by 19,600 in June. The working age population grew by 1.4 per cent over the past year - the smallest gain ten years.
What is the importance of the economic data?
- The Labour Force estimates are derived from a monthly survey conducted by the Bureau of Statistics. The population survey is based on a multi-stage area sample of private dwellings (currently about 22,800 houses, flats, etc.) and a sample of non-private dwellings (hotels, motels, etc.). The survey covers about 0.24 per cent of the population of Australia and includes all people over 15 years of age, except defence personnel.
- If more people are employed, then there is greater spending power in the economy. But at the same time companies may adjust the work hours of employees. If employees work less hours, and therefore get paid less, then spending power in the economy is reduced.
What are the implications for interest rates and investors?
- It is clear that the soft readings on economic activity are being reflected in the job market figures. Manufacturing, construction and the services sector all remain soft, while businesses are trimming new orders and profitability is being affected - given the lack of activity. No doubt the softer economy is ensuring that businesses remain cautious and more circumspect about future hiring.
Latest News on Huntlee
Friday, 5 August 2011
Source www.lwpproperty.com.au
As you will no doubt be aware from local media, the Sweetwater Action Group recently challenged the validity of the urban zoning process of Huntlee in the NSW Land & Environment Court.
Unfortunately, this Court ruled against Huntlee and quashed the rezoning.
Following a comprehensive review of the decision and subsequent legal advice, LWP Property Group Managing Director, Danny Murphy announced that an appeal had been lodged against the decision.
LWP Property Group Managing Director, Mr Danny Murphy, said the appeal was based on strong legal advice.
The development represents the first new town in the Hunter for almost 50 years and will provide up to 7,500 homes, 3,000 permanent jobs and 200 hectares of employment lands over a 20-year development program.
Mr Murphy also noted the announcement on the weekend of the Friends of Huntlee group, which has launched a public petition in support of the development. The petition can be found at www.gopetition.com/petitions/friends-of-huntlee.html
We remain committed to this important regional project and we have been encouraged by the wave of support from the local community in the wake of the disappointing ruling, Mr Murphy said.
We have sought urgent discussions with the NSW Planning and Infrastructure Minister, Mr Brad Hazzard, given the implications of last months Land and Environment Court decision for Huntlee and the broader development industry in NSW.
We will continue to update you on future developments as they occur. Thank you for your continued support of Huntlee. Please visit huntlee.com.au for the latest information or join our Facebook page - search for Huntlee.
Be Positive in 2009
Wednesday, 10 December 2008
Lets be honest, 2008 was a difficult year - or at least the first 9 months of it was. Interest rates were in the 9%-10% range, petrol prices were $1.50 or more per litre, property price growth was relatively flat and we were constantly bombarded with all the doom and gloom of the economy. So what does the future hold for property in 2009?
You need to consider whats is being done on the DEMAND side and the SUPPLY side of property. Lets look at DEMAND first.
Rising Rents - With the lack of construction activity since the last boom and the increased difficulty of developers getting funding for their projects, the lack of supply will see rents continue to rise in the short to medium term in most areas, creating more demand. When demand increases, and supply cannot keep up, prices rise.
Introduction of increased first home owners grant (FHOG) - Kevin Rudd announced in October an
increase in the FHOG as part of his Economic Security package. This sees the grant go from $7,000 to $14,000 for an established property or $21,000 for a new property. On top this, NSW Premier Nathan Rees, announced an additional $3,000 for new property during the mini budget, taking the grant to $24,000 for new property. This was all designed to increase demand on property by making affordability easier. The catch is, first home owners must take advantage of the grant before 30th June 2009 when it expires, so there will be a mad rush for property before this date. Did either government do anything for the supply side? - NO. When demand increases, and supply cannot keep up,
prices rise.
The Reserve Banks (RBA) continual interest rate cuts - The RBA has made significant cuts to our interest rates. In fact, at the time of writing, you can get rates as low as 4.99% for 3 years. Just 5 months ago, this rate was in the 9% range. This makes money cheaper to borrow and reduces repayments for new an existing borrowers. For those wanting to buy a home or investment property, it has not been this cheap since the early 2000s. This makes it more affordable and attractive for people to buy property. So as demand for loans increase to buy property, and supply of property cannot keep up,
prices of property will rise. Whats been done on the supply side? Virtually nothing. Governments and
councils have not reduced development costs or levies (to a significant extent), and combined with tighter lending rules from banks and you have a situation where limited development of new land,
houses or apartments will take place. This means supply will continue to dwindle and not keep up with the reported 200,000# new homes required by the end of 2009 to house our growing population.
This SUPPLY AND DEMAND imbalance has created a unique opportunity for you in 2009, one which you may not see again for some time. Over 70% of our properties are now cash positive or very close
for the majority of investors
Dont miss out on the opportunity to buy a property and have little to no out of pocket costs. Call us today and find out which properties are cash positive for you.
AND
Dont miss out on our CASH POSITIVE PROPERTY EXPO
Newcastle / Hunter Expo
Wests Leagues, New Lambton
Sunday 8th February
10am - 12pm
Central Coast Expo
Crown Plaza, Terrigal
Sunday 15th February
10am till 12pm
See the web site for details and look out for special offers in January 2009.
# Source - Your Mortgage magazine Nov 08.
Note - Westpac has since withdrawn it's 4.99% fixed rate offer. The offer ended on 16th Dec 2008. Fixed rates are currently in the mid 5% range at time of writing.
SPECIAL - 5 LOTS IN CARDIFF
Wednesday, 10 December 2008
Download the attached flyer for a Cash Positive property opportunity.
Note - Westpac has since withdrawn it's 4.99% fixed rate offer. The offer ended on 16th Dec 2008. Fixed rates are currently in the mid 5% range at time of writing.
National Rental Affordability Scheme
Thursday, 18 September 2008
NATIONAL RENTAL AFFORDABILITY SCHEME (NRAS)
Many of you may have heard a little bit about the National Rental Affordability Scheme, but what exactly is it?
The scheme was launched on Thursday 24 July 2008 and even though it has yet to go through Legislation, the Government is accepting applications by those interested in being part of the scheme.
So how does the Government want it to work?
Simply put, if you have a home that has never been lived in before, and are willing to rent it 20% below the market rent, then the Federal and State Governments will give you $8,000 each year for ten years.
What impact does that have on my weekly holding cost?
A property rented at $300 per week receives approximately $15,600 per year. However that same property in the scheme rented at $240 per week will receive $20,480 per year. That means you would be around $93 better off each week. And remember this is every year for ten years.
But does that mean the rent will not go up over the ten year period?
No, the Market Rent is established by an independent company and will increase as the market demands, this also applies to the $8,000 government contributions which will be indexed.
Wont the tenants be people who dont work or otherwise?
Although the tenants are means tested, if they are receiving the full amount of rental assistance by the government and paying more than 30% of their gross household income in rent for one year, they will be eligible for the scheme. Many people fit into these categories, in fact families with a household income of $80,000, who claim the family tax benefit and have three children are eligible. It is the aim of the government to allow these people to save on their rent assisting them to save a deposit for their own property. As the investor you still have the final say on which tenant takes occupation of the properties as per usual.
Can I submit my off-the-plan property?
The Government has aimed this scheme at the everyday investor, however they have made it almost impossible for them to take advantage of the scheme. Each application must have a property portfolio of at least 20 properties. The government would ideally like 100 properties in each application. So for example, a developer with 20-100+ properties would be fine to submit an application, or alternatively a Trust could be established whereby the properties are purchased and investors can invest in the trust.
If a developer lodges the application can I get the government grants when I purchase the property?
Possibly. Although the Government would like a 10 year commitment from investors, they are able to sell dwellings during the 10-year holding period without penalty, when the dwelling is sold to another investor and they undertake to comply with the existing obligations under the Scheme, or an equivalent dwelling is offered as a substitute dwelling for the remaining part of the 10-year period. The substitute dwelling must be of an equivalent type and in a similar location as the dwelling that was sold. Dwellings must be substituted within thirteen weeks of the date of sale of the original dwelling. Even if you were to buy an existing property approved for the scheme you still have to have at least 20 properties in the portfolio.
What if I establish a trust to purchase the properties?
This is the ideal way to be part of the scheme. In fact the Government is specifically targeting banks, superannuation funds (excluding self-managed superannuation funds), credit unions, property trusts listed on the ASX and unlisted property trusts to be involved in the scheme. The trust would work as any other. Funds would be raised to purchase the properties throughout Australia and Investors could purchase units (shares) in the trust, which is great for those just starting out, or people unable to raise funds to purchase a property themselves.
So is Prowealth establishing a trust?
At the moment no. As we dont hold an AFSL (Australian Financial Services License), we are prohibited by ASICs to raise funds in excess of $2 million dollars, or put together a trust with more than 20 investors. As you can imagine the cost of 20 properties would easily exceed the $2 million dollar cap. We have however been liaising with the facilitator of this project and relaying our concerns and objections we feel are prohibiting this project from meeting its full potential. We will continue to research this project in the hope we will be able to offer it to our clients.
In Summary
The only way to be part of the scheme is if you are a mid to large developer willing to hold a massive portfolio for a 10 year period, or if you purchase shares through an approved institution. There is nothing stopping Prowealth from obtaining an AFSL however the regulations are very tough and the license takes many years of study to satisfy, so in any case we couldnt be registered in time to take advantage of this scheme. I guess the good news is that superannuation funds (excluding SMSF) now have incentives to encourage taking on property in their portfolio which is definitely a step in the right direction.
The government is in desperate need for housing through out Australia, and this scheme is doing little to assist those holding the properties take advantage. In most cases you wont be in the scheme, but do you really care? The Government is spending $623 million to attract 100,000 more homes in Australia over the next 4 years. It is blatantly obvious with rents going up, less developers building and an increase in immigration, that the Government feels we are only just starting to feel the housing crisis. You dont need to be in this scheme to reap the rewards property will offer you over the coming years, just so long as you are in the property market.
Self Managed Super Special Seminar
Friday, 18 April 2008
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Register now for this special event. On Saturday May 17th, Prowealth will be holding a follow-up day on 'How to Purchase Property through your Self Managed Super Fund'. We have been asked numerous times to repeat this section of our recent Super Saturday Seminar, so we have decided to devote a few hours to this sole topic. Come along and find out how a SMSF works and how you can now leverage the money in your fund to buy a property. This seminar will be held in our function room of our Tuggerah Office. Please call us to reserve your seat.
Tony Melvin to speak in Terrigal
Thursday, 31 January 2008
Best selling author of 'How to legally reduce your tax', How to control your super now' and 'How to achieve wealth for life' will be a special guest speaker at our Super Saturday Seminar. Dont miss Tony as he explains Trusts, Tax and Asset Protection in plain english! You can book now by clicking the booking link above. Super Saturday will be held on Sat March 8th 2008 at Crowne Plaza Terrigal. More topics and guests to be announced shortly.
Xmas Closing Times
Wednesday, 12 December 2007
Please note that the offices of Prowealth and Prowealth Money will close at midday on Thursday the 20th of December and re-open on Monday January 7th 2008. Even though we are closed, many of the builders we use will be continuing construction right through the holiday break, aside from the obvious public holidays. If you have any concerns or queries, please let us know before we close.
Kurri Kurri goes off!
Thursday, 29 November 2007
Last night saw the release of 'Vibe' and 'Flow', 2 new developments in Kurri Kurri in the Hunter Valley. Priced from $220,000, we were swamped with clients wanting to reserve the unit. If your missed the night, you missed some great deals, including being able to exchange on only $500, receiving free air con, and savings of between $5000 and $15,000 per unit. At the end of the night 26 properties had been reserved across the 2 sites. Keep an eye out for future development releases!
3rd Quarter Newsletter
Wednesday, 3 October 2007
Prowealth's 3rd Quarter newsletter is now available for download. Those clients that have given us there mailing address will receive a copy in the mail along with brochures on 2 new developments.
Super Saturday
Monday, 20 August 2007
A big thanks to all who attended our Super Saturday Event at Crowne Plaza Terrigal on Saturday. We hope everyone got something valuable from the content delivered. For those of you who filled out an enquiry form or reserved one of the properties on offer, we'll be in touch later this week to set an appointment to take a look at your current situation and how we can improve it. As Daniel mentioned, a download of the slides from the presentation will be available under the 'Workshops/Events' then 'Books / Links' section of the website in the next few days. The message of the event - DO SOMETHING!
Super Saturday
Wednesday, 18 July 2007
Have you booked for Prowealth's Super Saturday at Crowne Plaza Terrigal on the 18th of August? Presented in workshop format, featuring internationally recognised speaker, Mr Pat Mesiti, this event will be THE Property Investment event of the year. Book now using the links above, or click on the Information Events tab to see a short video of Pat in action.
Website Upgrade
Friday, 22 June 2007
Please note that our site will be undergoing a major upgrade over the next few days (until Thurs 28th June) which may result in it taking a long time to load. Please be patient as we design a better site for you.
Highgrove Release Dates
Wednesday, 6 June 2007
Further to our story below on Highgrove at Rutherford, were pleased to announce that the official release will be on June 19th and June 20th to co-incide with our next information seminar. Click on the information events tab above and book your seats to either the Erina or Tuggerah night. Continuing our great first release offers, Prowealth has been able to secure the best 10 units in this development for our clients and you'll be able to exchange on only $1000 with nor more to pay until completion in Feb 2008. If your interested, dont wait till the release night, call us and come take a look at the scale model and reserve your before the public gets a crack at it.
Jade - West End first images
Saturday, 2 June 2007
Were pleased to finally release the first images of Jade on Victoria located in Brisbane's West End, only 2km from the CBD. The complex itself is still undergoing minor changes to floorplans and designs and should be ready for release to our clients late June early July. Register on the Hot List to be the first to know.
Highgrove at Rutherford now available
Tuesday, 15 May 2007
Following the success of Vicinity at Lisarow, Prowealth is pleased to release HighGrove at Rutherford in the Hunter Valley, just outside Maitland. The first of its type in the area, Highgrove will feature 36 single level villas in 1, 2 and 3 bedroom combinations. Rutherford is one of the most highly productive areas in NSW and a service centre for a rich agricultural hinterland. With access to two national highways, a 90-minute freeway drive to Sydney, 30 minutes to the vineyards, Newcastle and Port Stephens, close proximity to airports, shipping terminals and freight rail access. The cornerstone of any community is its range of community services and facilities. It has an excellent standard of health services, schools, residential housing and retail shopping centres, all of which are there to make sure your life after work runs as smoothly as possible. Huge investment in retail developments in the west of the City at Rutherford are creating a new shopping precinct without parallel in the Lower Hunter. With at least three supermarkets, a large number of specialty outlets and a series of major bulky goods retail outlets, Rutherford will fast become a retail destination of choice in the region.
For more information, search under the 'buying' tab.
Super Saturday Seminar
Tuesday, 8 May 2007
Prowealth is busy preparing for a huge event to be hosted in Terrigal in June featuring guest speakers and 3 new developments. Stay tuned or signup to our hotlist to be first to know. Due to delays with the project models and redrawing of some plans, this release date has been postponed till June/July. We will let you know when it ready to go.
22 Sold in Vicinity
Friday, 16 February 2007
From the release night on 15th Feb, Vicinity has been an outstanding success with 22 of the 49 available town homes selling to keen investors and owner occupiers. "We are blown away with the response from investors and the general public' Daniel Goodwin, Prowealth Director says "It goes to show that investors understand that now is the time to buy property as we are at the lowest point in the cycle, and with Vicinity being a 2 year build, its the perfect way to secure capital growth now, but not pay for the property till 2009". "We encourage anyone that is considering Vicinity to make contact with us asap as the best units are being snapped up"
Vicinity selling fast
Friday, 2 February 2007
At the in store display in Erina Fair this week (till Sunday the 4th Feb), Daniel Goodwin, Director of Prowealth, announced that 8 townhouses in the Vicinity development have been pre-reserved by prowealth clients prior to the scheduled release night of 15th Feb (see events section) Prowealth clients are invited to get a jump on the regular public by coming and seeing the display in either Erina Fair (as above) or in our Head Office. Aslo, after initial feeback from our clients, the developer TPC has redrawn the floorplan for the 3 bedroom villas to now include a study and improved layout. "It goes to show that the feedback from our valued clients is certainly taken on board when we speak to the developer to deliver a product that our customers and tenants want" Daniel said. The new floorplan will be released at the upcoming release night at the Platinum Building Erina 15th Feb at 630pm. Book now in our events section.
'Vicinity' Launch draws closer
Tuesday, 9 January 2007
After 12 months of planning, Lisarow's latest residential lifestyle complex is ready to go. 'Vicinity' will be officially launched at a special release night along with the 'Highgrove' development in Rutherford (Hunter Valley) at the Platinum Building in Erina on Thursday the 15th of February at 7pm. Book you seats using the link above. Also, download our latest newsletter to get the full story on 'Vicinity'.
Christmas Closing Times
Monday, 11 December 2006
Merry Christmas from the team at Prowealth. Our offices will be closed from Thurs 21st of Dec until Monday the 8th of January. We will be checking our answering service and email regularly during the break, so feel free to leave a message and we will return your calls when we return. Once again, Merry Xmas and Happy New Year.
Interest Rates on hold - RBA
Wednesday, 6 December 2006
The Reserve Bank (RBA) gave Australian homeowners and buyers a welcome early Christmas gift this week when it left interest rates on hold, keeping the official cash rate at 6.25 per cent.
It was not unexpected. When the RBA raised rates last month, Governor Glenn Stevens indicated in his report that the Board would wait and see what impact the three rises this year - in May, August and November - were going to have on inflationary pressures.
The Board next meets in February, 2007
Web site overload from advertisment enquiry
Monday, 27 November 2006
Due to an unprecedented level of hits to our website on Friday from our advertisement in the Express, Prowealth.com.au was temporarily unavailable over the weekend. The link has been restored and work is continuing on the brand new site. More and more property and investment news will be added over the coming weeks, with an official launch set down for Jan 1st 2007. Prowealth.com.au will be your first source for all property investing! Thanks for your patience.
Hot News - QLD West End development site sells for $42 million
Tuesday, 14 November 2006
Stockwell has acquired a landmark residential development site in Brisbane's evolving West End Riverside Precinct for $42 million. The River Point site, which has approval for 297 residential units in place, was purchased from Investa Property Group. more... Nov 14, 2006
Hot News - RBA Lifts interest rates .25%
Wednesday, 8 November 2006
At its meeting yesterday, the Board decided to increase the cash rate by 25 basis points, to 6.25 per cent. The decision was taken against a background of continued expansion in the global economy and further evidence that inflationary pressures had increased.
The standard variable home loan rate is expected to increase to 8.07%.
In the September quarter the underlying inflation rate was around 3 per cent, up from 2½ per cent at the end of last year, and it is likely to remain around that rate in the near term.
The Board judged this to be an environment in which the risks of inflation exceeding 2-3 per cent over the medium term remained significant. Monetary policy has been responding to these risks for some time, with increases in interest rates in May and August. Some effect of those measures is becoming evident in demand for credit by households. Nonetheless, the Boards judgement yesterday was that a somewhat more restrictive stance of monetary policy was required in order to moderate inflation over time, and thereby to secure sustainable growth.
Macquarie Bank economist Daniel McCormack was not surprised by the RBAs decision and said he expected that the current interest rate cycle had probably peaked. This will be the peak in the interest rate cycle and we expect the next move from the Reserve Bank to be down, but not until Q4 next year, he said. Mr McCormack said credit growth and consumer spending had slowed after the May and August hikes and the November hike would result in further slowing into early 2007. In combination with the drought, and a slower global economic picture, Australian growth could be a bit soggy in early 2007, he said. We think that will be enough to have the RBA on the sidelines for quite sometime and then eventually cutting (rates) later next year, Mr McCormack said.