Thursday, October 15, 2009

Start generating Cash flow By using Buy-Write

I met Peter Spann at a seminar recently and I was immediately impressed. I was even more impressed when I discovered he was one of the speakers. And even more impressed indeed when I heard him speak. He kept 5,000 people enthralled as he detailed his rags to riches story and laid out in plain English a simple way just about everybody can use to increase their financial success.

So when I heard today that he was running a seminar on one of his simplest and most exciting strategies I just knew I’d have to let you know about it. Normally he only presents these seminars to his clients but I have talked him into to letting me make them available to you as well (It’s a strange name for a seminar but a bit of an in-joke he’ll let you in on when you’re there).

It’s a strategy that Peter personally uses to generate cash flow, lower risk and boost returns and if you have any interest in getting ahead financially you need to be there.

Over 750 people are already registered for these events in Brisbane, Sydney and Melbourne and we hope to see you and your friends as Peter shares with you a great strategy that is designed to generate you more cashflow.

I invite you to click here to see Peter talk about his new seminar;

BRISBANE: Tuesday 20th October, 2009

SYDNEY: Wednesday 21st October, 2009

MELBOURNE: Tuesday 27th October, 2009

Register now online by clicking here or by calling the team at Pow Wow Events on 1300 550 240

Have a great weekend.....

oh, and by the way, I have done a deal with Peter, that if you click here you can download his free e book.

Best regards


Wednesday, October 14, 2009

House prices set to soar 20% by 2012

Wednesday 14 October 2009
Patrick Stafford


Investors are being told now is the time to enter the housing market, as prices are set to rise up to 20% by 2012 with Sydney, Melbourne and Brisbane properties expected to record the most growth, a new report has revealed.

But property experts say the numbers are either relatively low, or overly optimistic, and warn there are still major supply issues affecting the market.

According to the latest figures from QBE Lenders Mortgage Insurance, Australian properties will grow by about 3% next year, followed by about 8% during 2011-12, adding up to an extra $100,000 in value in some instances.

QBE chief executive Ian Graham said for a $500,000 house, the growth will add $15,000 in value this year, $41,000 next year and $44,000 during 2012. The growth has quashed fears the reduction of the first home owner's grant would slow the property market.

"Although first home buyer demand will ease after the First Home Buyers Grant expires at the end of 2009, upgrades and investor demand is expected to gather momentum and take over as the main drivers of the housing cycle," Graham said.

The highest growth rate can be found in Adelaide, where prices will increase by 21% by 2012, higher than any other capital city.

Prices in Sydney will grow by 2% in 2010, 7.2% and a massive 10.9% during 2012. In Melbourne, properties are expected to grow in value by 3% next year, 7.5% the following year and 7.8% in 2012.

Darwin properties will grow by 17% by 2012, with Brisbane and Hobart expected to record growth of 15% each. Perth and Canberra investors will see their properties grow in value by 12%.

"Despite a 0.25% rate rise in the first week of October, housing interest rates are expected to remain at a stimulatory level for some time, with the low interest rate environment remaining supportive of the first-home buyer," Graham said.

"A broad-based recovery is forecast from the second half of 2010 as conditions in the labour market stabilise and investors and buyers are attracted back into the market by low interest rates and high rental yields."

But despite the encouraging figures, the growth remains lower than the massive 24% rate in Sydney during 2002, and the 36% growth rate in Perth in 2006. Australian Property Monitors senior economist Matthew Bell says the growth of the market remains relatively low.

"Those numbers don't seem excessively high to me. While we have house prices growing, with figures to come at the end of the month, I think returning back to the +5% growth rates isn't a big leap given the supply and demand issues that we have."

"The longer we go with the numbers we have, I don't think anyone thinks the supply is meeting demand, and I'm hoping that changes so it puts less pressure on the prices... although everyone would love to have a high gain in value."

David Airey, president of the Real Estate Institute of Australia, says he is astonished at the report's prediction of 11% growth in Perth by 2012, and that he is hesitant about taking the figures on board.

"These figures are highly optimistic. We are confident the property market is showing all the signs of a steady recovery towards normal growth, particularly in Sydney, but I'm reluctant to substantiate other people's figures."

"We rely on figures produced by real estate agents, and we look closely at those each quarter, you can't accurately predict beyond the current financial year, and certainly not beyond 2012. I'd be very cautious about putting highly optimistic figures out there... and certainly not double digits."

2009 housing-table

Tuesday, October 06, 2009

Pulse Alert - RBA Lifts interest rates

I am a subscriber to Gavin Chaus's Pulse Alerts.... which is awesome.... see

Interesting article from Gavin

Dear Subscribers,
Well the title of the article is clear enough - the RBA has lifted the cash rate by 25 basis points in the first move away from their emergency cash rate level of 3% despite inflation remaining at 1.5% - well under the RBA's target range of 2 to 3%. The rise has been prompted by a stronger than expected performance in the unemployment rates, stronger retail sales, rising consumer confidence levels and a rebound in the sharemarket** (which is up 50% from its lows). Additionally, the strong performance of the housing market has also prompted a move by the RBA to control what many fear may turn into a housing bubble. Australia well and truly remains the most robust of all developed economies.
This pre-emptive move has also been due to the stronger than expected performance of our trading partners in China, India and other Asian nations. While China's central bankers and policy makers haven't really responded any differently than anyone else in the world, (ie. they are spending like crazy!) the key difference is that they have cash... and LOTS of it. The benefits of this has indirectly flowed into our economy in the form of high commodities prices and export volumes. This is really the key difference that sets us apart from virtually all othe developed economis - small population, big land mass, strategic location near Asia and a heaps of valuable dirt.

Clearly Glenn Stevens thinks that we are well on our way to recovery.

This increase in rates stands in stark contrast to other developed economies. It is likely to increase demand for Australian dollars and attract foreign money flows into this country. We can expect the Aussie dollar to strengthen against the USD.

In part this will be due to USD weakness as the creditor nations of the world become increasingly nervous about their USD holdings, rather than the inherent stength of the AUD alone. If China chooses to maintain its US dollar peg, which is highly likely, this will present itself in the form of lower (officially recorded) inflation levels for us.
What else?
Well, the rates are still well in a stimulatory range. As we have mentioned before, rates are unlikely to shoot up very fast due to the highly leveraged nature of our household sector and for the most part, those who remain on variable rates should hold their nerve and avoid fixing for now. We can expect a cautious, wait and see approach by the RBA rather than any quick movements as the recovery for the global economy is likely far less certain than suggested by most mainstream commentators.

In the meantime, property prices are likely to continue ticking upwards across the board with excellent opportunities being presented in isolated markets which will show greater than average returns.

Kind regards,
Gavin Chau
Head of Research
** it is impossible to ignore the fact that the recent rebound inthe sharemarkets (globally) have effectively been a result of forced speculation due to the twin threat of inflation (monetary debasement) and low interest rates available in cash investments. While many stocks were deeply oversold and represented good buying last year, a rebound based purely on money flows rather than the weight of productive activity is unlikley to be durable... the so called suckers rally.


RBA lifts rates
October 6, 2009 - 2:52PM
The Reserve Bank has raised its key interest rate, making Australia the first developed nation to reverse the cycle of cuts triggered by the global financial crisis. Analysts say more increases are on the way.

Today's 25-basis-point rise pushes the central bank's cash rate to 3.25 per cent and will add $40 to the average monthly payment for a typical $300,000 mortgage if passed on by commercial banks. The extra cost may stretch household budgets at a time when unemployment remains on the way up.

''Economic conditions in Australia have been stronger than expected and measures of confidence have recovered,'' Glenn Stevens, governor of the RBA said in a statement accompanying the rate increase. ''[The] basis for such a low interest rate setting has now passed,'' he said.

''I think it's pretty clear that (the RBA is) increasingly comfortable that growth outlook appears durable,'' said RBC Capital Markets economist Su-Lin Ong.

''They talk about a return to close-to-trend growth in the year ahead so obviously Australia is proving resilient throughout all of this.''

The Australian dollar jumped on the rate news, adding more than three-quarters of a US cent to 88.45 US cents, nearing 14 month highs - before easing back slightly. Stocks, though, fell, trimming the day's gains.

Investors are rating the chance of another rate rise when the RBA board next meets at 40 per cent. In one year's time, rates will be up to 5.25 per cent - implying eight more quarter-point increases by then.

Rebounding economy

Today's rate hike - the first shift in either direction since April, when rates were reduced to 3 per cent, and the first increase since March 2008 - is the surest sign yet that the local economy is on the mend.

The RBA has been emboldened by strong retail sales, rising consumer confidence and a rebound on share markets worldwide, which are up 50 per cent in Australia alone since March.

''The global economy is resuming growth,'' Mr Stevens said. ''With economic policy settings likely to remain expansionary for some time, the recovery will likely continue during 2010 and forecasts are being revised higher.''

While the expansion is likely to be ''modest'' for many rich nations, ''[p]rospects for Australia's Asian trading partners appear to be noticeably better,'' Mr Stevens said. ''Growth in China has been very strong, which is having a significant impact on other economies in the region and on commodity markets.''

The central bank does not want the economy's overall health to be threatened by underlying inflation or unsustainable borrowing activity, which can be triggered by low rates.

''For the health of the Aussie economy and the sustainability of the recovery I hope they do a few more (rate rises) because inflation is still going to be a problem,'' said ICAP economist Adam Carr.

''Our economy is going to be running on all cylinders next year and that could be a problem.''

The RBA's Mr Stevens, though, said inflation is likely to be ''close to target,'' with the stronger Aussie dollar helping to ease some price pressures as imports become cheaper.

And the bank is worried about the effect of unchecked house prices rises, which analysts say received an unintended boost from the First Home Buyer's Grant.

Those financial incentives for home buyers, put into place a year ago at the height of the economic crisis, were cut from last week and will be cut again at the end of the year.

Despite the positive economic signs, the job market remains weak, with the unemployment rate, currently at 5.8 per cent, expected to have hit 6 per cent in September when new data is revealed on Thursday.


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