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.
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