Invest in Property through your SMSF – Seminars in Sydney, Melbourne & Canberra
We are holding free Investing in property via your Self Managed Super Funds (SMSF) presentation in Melbourne, Sydney & Canberra in late May, early June, see below for dates.
Probably the biggest single change underway in the Property market right now is -
Australian’s purchasing Investment Property through their Self Managed Super Funds (SMSF)
In fact, the latest figures from the Australian Tax office show a 50% increase in property investment via SMSFs since June 2008.
Following the Global Financial Crises (GFC), investors are now looking to take control of their super funds and gain exposure to residential investment in an attempt to enhance the performance of their asset, reduce the costs associated with their super funds and manage their risks themselves. Click Here To Read More
Positive Cash Flow NRAS Property
We have just added some cash flow examples to our site that compare the same investment property, as an NRAS property and as a standard rental property. Remember, the property itself is exactly the same, but if it does have an NRAS option then it will usually have a very positive effect on your cash flow, in most cases turning a normally negative cash flow property in to a positive cash flow property.
We currently have available some NRAS townhouses in Melbourne’s middle ring suburb of Pascoe Vale, just 10kms from Melbourne’s CBD. We did an analysis on one of the 2 bedroom townhouses, priced at $495,000.
We’ve made a few assumptions, investor currently earning $100,000 (no other tax deductions) has current equity on their own home, so will borrow the full amount, including purchase costs, an interest only loan at 6.5% etc. Click Here To Read More
Banks Lower Their Fixed Rates, Improving The Bottom Line For Property Investors
Last week the RBA dropped official interest rates by 0.5%, with the official cash rate now at 3.75%. As expected the major banks have lowered rates, but have not passed on the full 0.5% cut. ANZ is yet to announce any movement and the other majors lowered rates from between 0.37% to 0.4%.
Today, further good news for Investment Property buyers as the CBA have also just announced a cut to their 1 & 3 year fixed loans, dropping them both down to 5.99%. Property investors often prefer to take out a fixed rate loan for several years, that way they know what to expect with their cash flow and no surprises if rates do go up, down the track. This latest reduction will mean that investors costs to hold an investment property are lowered.
The money market has already factored in several more interest rate drops over the next 12 months and the lowering of fixed rates down to these levels suggests that the banks also feel that there will be further drops in the official cash rate.
As the stock market continues to flounder, these reduced rates and the strong rental returns are expected to lift investor demand in the property market. The lower rates will also likely see an increase in first home buyers to the market and this will flow on to those looking to upgrade.
Sydney Off Plan Apartments available for Zero Stamp Duty NSW Building Bonus
Following on from our recent article where we reminded investors that the NSW Builders Bonus, (which provides for zero stamp duty for properties that are purchased at the pre-construction off plan stage) is due to expire on the 30th June 2012 we have briefly listed below the current properties that we have available in Sydney which have stock below $600,000 and will qualify for the zero stamp duty bonus.
Lane Cove Apartments
2 x one bedroom apartments available from $550,000 (58sqm internally plus balcony plus car space) North facing.
Completion mid 2013
For further details and to receive full information on this project, see Lane Cove off plan apartments in our current projects section. Click Here To Read More
RBA Slashes Rates, Great Opportunity for Property Investors
The RBA yesterday reduced the cash rate by 50 basis points to bring the official rate down to 3.75%. Excellent news for those looking for an investment property. Whilst most economists were predicting a reduction, the real debate was by how much, most were expecting just the usual 25 basis points, though a few saw an argument for 50.
The debate is now raging as to how much the banks will pass on, with Treasurer Wayne Swan demanding they pass it all on. The reality one suspects is that the big four banks will follow Bank of Queensland’s early move and reduce rates by 0.35%, rather than the full 0.5%. This is probably what the RBA expects also which is why they would have gone for the higher 50 basis point reduction. Click Here To Read More
NSW Stamp Duty Savings end 30th June 2012
Currently purchasers buying an off plan property, with a price not exceeding $600,000 are eligible for zero stamp duty via the NSW Home Builders Bonus. This bonus is available to all purchasers, both intending owner occupiers and investors. And it’s available to all investors, both local and non residents. So if you are in the market for a Sydney investment property this is an excellent opportunity, but you will need to be quick.
The full zero stamp duty payable is for property that has not yet begun construction, that is an off plan property. For property that has begun construction, whether it is part completed or fully completed, a 25% reduction of stamp duty is available.
For those looking to purchase an off plan investment property, this is an excellent opportunity but like all good things, it will not last forever! The NSW Home Builders Bonus is due to end on the 30th June 2012. So contracts need to have fully exchanged by the 30th June 2012 to be eligible for this bonus and it is a very significant bonus at that. On a purchase price of say $575,000, the normal stamp duty payable in NSW is $21,365, so it’s a significant saving, but you will need to exchange contracts within the next 8 weeks to take advantage of it.
Interest Rates to Fall – Time to Lock in at Current Prices.
Following the release last week by the Australian Bureau of Statistics of Australia’s first quarter inflation rate of just 0.1%, well under the 0.06% that the market was expecting, economists and market analysts are all in agreement that the Reserve Bank of Australia will drop interest rates when it meets tomorrow and as such it a great time to be looking at your investment property options.
Inflation rose to just 1.9% in the year to April, suggesting that apart from Australia’s mining sector, many other sectors have slowed and the question being debated by many now is not “will the RBA drop rates” but “how much will the RBA drop rates by” and how many rate drops should we expect in the next 12 months.
Most seem to be suggesting just a 0.25% drop in May but many expect that this will be followed by a second drop as early as June and quite possibly a third drop later in the year. The official cash rate at the moment is 4.25%. Investors can currently pick up a discounted variable rate loan at around 6.7%.
Westpac have just announced a drop to their fixed rate loans, a 3 year fixed rate is now available from Westpac at 6.19% and no doubt the other majors will likely follow. The money market have also built in a number of rate cuts over the next 12 months. Click Here To Read More
No Change in Latest Unemployment Figures
Despite all the doom and gloom that we seem to have been getting of late, Australia’s latest unemployment figures have just been released and they show no change from the February figure, a relatively low 5.2%. With unemployment low, now is an excellent time to consider an investment property to take advantage of Australia’s medium and long term growth prospects.
Whilst the media have focussed on several major employers shedding jobs, the fact is that we have some sectors (not just the mining sectors) that are doing fairly well. In fact the official March figures have showed that 44,000 jobs have been added to the economy over the last month and as such the unemployment figure has stayed steady at 5.2%.
Many economists had forecast only 5,000 jobs to be added in the last month, which would have taken the official unemployment rate up to 5.3%, but that was not to be.
The fact is, whilst many sectors are struggling, many are also doing very well and taking a macro view, our economy as a whole is travelling fairly well and the latest unemployment figures support this. As I have heard from several economists of late, our biggest danger is ourselves with negative consumer confidence meaning that many are not spending. The fact is, we are travelling fairly well at the moment. As the positive data continues over the coming months, it will see a change in consumer confidence and this change will lift spending and further stimulate our economy.
Now is the time to Buy, before rates drop further
Yesterday saw the Reserve Bank of Australia hold the official cash rate at 4.25%. But the indications are very strong that we will see a reduction in this rate in the months to come, with many economists suggesting as early as next month given the RBA’s comments and expected data later this month. As such, now is an excellent time to unlock the piggy bank and secure an investment property.
The futures market has built in a 75 basis points reduction within the next 12 months. Glenn Stevens, the RBA Governor signaled yesterday a willingness to cut rates after the RBA board “judged the pace of output growth to be somewhat lower than earlier estimated.” With China & Australia’s output set to be lower than expected, many are suggesting that once inflation figures are received later in April a rate reduction will be on the cards for next month.
As we have suggested previously, historically there has been a direct correlation between rates dropping and house prices increasing.
As reported in our blog late last month, buyer confidence is growing, with loan applications at record levels in February, 30% higher than in February 2011. We believe that this is the flow on effect of the rate drops last November & December. Click Here To Read More
NRAS Townhouses Melbourne
We have just launched a brand new boutique townhouse development in Melbourne’s inner west suburb of Footscray and the great news for property investors is it’s also available as an NRAS property which for many investors will mean this is a positive cashflow opportunity.
This is a fabulous little project with just 8 X 2 bedroom townhouses available, due to complete later this year but as construction is just starting the stamp duty savings are still massive, saving investors over $20,000.
Footscray is a transforming suburb, it’s a part of the Melbourne 2030 plan with many infrastructure projects and redevelopments underway now or in the planning stages. This suburb is expected to double it’s population over the next 10 to 20 years. Click Here To Read More