Brisbane inner city market undersupplied

Posted on Friday, May 24 2013 at 3:54 PM Australian Property Investor

There’s a very limited supply of housing in Brisbane at present and auctions are increasing in popularity as sellers regain a more optimistic view of the market, according to one analyst.

James Freudigmann is the national manager of Propell Buyers’ Advocates and believes an analysis of market data from Brisbane shows some interesting trends.

For one, Freudigmann says one-third of all properties listed for sale in the Queensland capital’s inner city suburbs are under contract.

“To have over a third of properties going to auction is a sign that the market is starting to heat up,” he says. “Agents are taking them to auction to get exposure because of the shortage of supply of quality stock.”

Inner city houses within five to seven kilometres of the CBD and priced in the middle segment of the market are especially in demand with both homebuyers and investors, he says.

Some pundits are still describing the housing sector in southeast Queensland as subdued, but Freudigmann thinks they’re missing the mark. He has analysed property listings to prove his point.

Across 37 inner city markets, there are currently 218 houses listed for sale on realestate.com.au, he says. Of those, 77 are under contract already and 13 are actually units that have been incorrectly listed as houses.

A further 30 are priced in excess of $600,000, leaving only 105 houses for sale in that prime middle price segment, he says.

“With 37 suburbs in total, that means on average there are three houses under $600,000 per suburb.”

Of the 105 remaining, 37 are going to auction and another 33 are what Freudigmann describes as “secondary”, or less desirable than others given their proximity to main roads, train lines or even a history of flooding.

“This leaves only 31 houses for sale (and not going to auction) in these 37 suburbs in the inner city sub $600,000 price point.”

Will your super be enough to retire on?

How much super do you need to retire?
Some say 20 times your current annual spend .

So if you live on 10k per month, you need $2 million to retire!

A scary statistic from the Association of Superannuation Funds of Australia:-

Based on current balances and current savings, "the average retirement superannuation payout at age 60 for a male currently aged 35 to 44 would be $183,000, while for a female it would only be $93,000."

this means that millions of Australians will not have enough money to live comfortably in their retirement.

So, if you want to retire with adequate resources, marry rich, inherit, make serious money from a successful venture

or

Start planning your financial future, and develop a strategy for regular saving and strategic investment .

Below are 4 simple rules to achieve financial freedom ( from the "richest man in Babylon" )(great book, by the way)

1. Spend less than you earn

2. Invest the difference wisely

3. Reinvest your investment income so you get compounding returns.
By the time you reach financial freedom, almost all your assets will have come from compounding capital growth, not from your income, your savings or your rent.

4. Keep doing steps 1 and 2 until your asset base reaches a critical mass so that you have the cash machine that gives you the income you desire.

Property -

Why has property been a great wealth creator in an investment portfolio - simply LEVERAGE !

You can now use your super as a deposit to acquire investment properties, using a self-managed superannuation fund (SMSF).

To find out how - download the attached ebook on property and self managed super .

Should you set up an SMSF giving you control of managing your Super?

Advantages

Control – You have control over your SMSF rather than entrusting your future financial wellbeing to a complete stranger, who will take your hard-earned cash and invest it in shares and managed funds that may or may not perform.

Leverage – You can make the money in your SMSF work harder by using it as a deposit and borrowing to buy investment properties that grow in value.

Tax savings – when you retire, Capital gains is exempt from capital gains tax if you sell the investment, or income tax on any rental income should you decide to hang onto it. Before you retire, any capital gains or rental income generated by your SMSF is taxed at a rate of 15% and 10% Capital Gains Tax if you sold the property after holding on to it for over a year.

Disadvantages

The cost! This usually involves thousands of dollars in establishment costs and sometimes there will be higher fees involved in borrowing to buy property through your SMSF. (However, when you compare it to the charges of your normal SMSF, it will probably be comparable, but transparent!

The confusion – There's no denying that managing your own super fund can be a minefield of complicated rules and regulations.

Get something wrong and you could end up paying hefty penalties. Of course, you can pay a professional to manage it on your behalf and this is something I would strongly advise anyone with a SMSF to do – whether they're buying real estate or not!

Enough cash in your smsf . generally at least $150k This is not a strategy for someone with a small amount of cash .

So, if you want financial independence in retirement, put some plans in place, review your finances, do something now and don't leave it until it's too late.

Get educated by someone who you know , like and trust!

Be careful

before you go down the route of setting up your own SMSF, it is critical to seek independent advice from a properly qualified financial planner to ensure that it is appropriate for your circumstances, and that you set up things correctly and don't fall foul of the law!

Be sure to attend Ark's Property and Self Managed Superfund Seminar

Wednesday 19th - 6pm

Thursday 20th - 12:30pm

Where: Level 7, 14 Martin Place, NSW

Duration: 1 hour

Light snacks will be provided

or download the Ark EBOOK on Property and SMSFs

Last chance to fix at 4.99%!!

If you are looking to fix your interest rates on your home loan or investment property, now might be the time with one major bank already announcing they will not be offering 4.99% from Wednesday.

Feel free to contact Liquidity to find out more about your options and if fixing is suitable for you now.

Westpac cuts two year fixed rate home loan to 4.99%

 If you want to review your loan call Danny on 02 9290 2777, or email him on danny.luu@liquidityfinance.com.au

Westpac announced it will reduce its two year fixed rate mortgage to 4.99% (with Premier Advantage Package).  The new offer represents a cut of 0.4% on the current two year fixed interest rate.  The new rate takes effect from Thursday 7 February 2013 and will be available for both new and existing customers.

This places Westpac as a market leader among the major banks and is Westpac's lowest offer on two year fixed rates since April 2009.

Effective Thursday 7 February 2013, the fixed rates will be as follows:

Term	Current Rate (Stand Alone)  % p.a.	New Rate  (Stand Alone) % p.a.	New Rate  (Premier Advantage Package)  % p.a.	Change %
1 year	5.69	5.69	5.49	-
2 year	5.59	5.19	4.99	- 0.40%
3 year	5.59	5.59	5.39	-
4 year	5.89	5.89	5.69	-
5 year	5.89	5.89	5.69	-
6 year (IPL only)	7.00	7.00	6.80	-
7 year	7.50	7.50	7.30	-
9 year (IPL only)	7.50	7.50	7.30	-
10 year	7.50	7.50	7.30	-
12 year (IPL only)	7.60	7.60	7.40	-

Note:  Fixed Rate SMSF Investment Property Loans have changed by the same amount, and remain at
a premium of 0.35% above the standard carded fixed rates.

The comparison table below shows Westpac as the market leader with the lowest fixed rates amongst the majors for 2 and 5 year fixed loan terms:

Lender	1 year fixed rate (packaged)	2 year fixed rate (packaged)	3 year fixed rate (packaged)	4 year fixed rate (packaged)	5 year fixed rate (packaged)
Westpac	5.49	4.99	5.39	5.69	5.69
CBA	5.19	5.29	5.29	5.64	5.69
ANZ	5.34	5.34	5.39	5.84	5.84
NAB	5.24	5.34	5.29	5.64	5.84

Property vs Shares over 10 Years

Summarised from SMH

Bricks and mortar might be the popular choice for investors, but how does it stack up in the long term? John Collett discovers which asset classes gave more bang for your buck in the past 10 years.

•          Residential real estate is a much-loved investment and everyone seems to know someone who has doubled their money playing property.
•         Shares have their legions of fans,
•          while others prefer the security of cash.

But to settle the question of where has been best to invest over the long term, Money asked AMP Capital Investors and SuperRatings to supply the 10-year returns for six asset classes, plus superannuation.

The results will disappoint the bricks-and-mortar brigade, because they show Australian shares win hands down. Not only have domestic shares outpaced overseas shares, they have done much better than residential real estate.

1.             Australian shares produced an average annual return of 9.1 per cent over the past 10 years to Dec 31, 2012.

2.            Superannuation and Australian bonds were the next best performers, returning 6.4 per cent.

3.             Bricks and mortar even struggled to keep up with the 5.4 per cent return on cash. Australian residential property produced a return of only 5.3 per cent.

4.             Property price performance is even worse than it seems, because all returns given in the accompanying table (above, right) are ''total'' returns. Estimates of the gross rental yield coming from rents have been added to the growth in house and unit prices. With shares, the dividends are included in the returns so the asset classes are compared like-for-like.

On a growth rate of 5.3% on property, (assume a  marginal tax rate of 39% and a 5% gross rental yield) your post tax IRR is 19.03%
(if you want my detailed workings , please contact me and I will gladly send this to you!

Timing is a factor

But the start and end points used to measure performance are crucial to the outcome. The chief economist at AMP Capital Investors, Shane Oliver, points out that 10 years ago was a low point for shares with the end of the ''tech wreck'', and the start of the strong period of returns that ran until late 2007 with the onset of the global financial crisis (GFC),  and the 9.1 per cent 10-year return on Australian shares has been lifted by shares returning more than 20 per cent in 2012.

Just as the 10-year return on shares starts from a low point, a decade ago growth in property prices was peaking. Oliver says the poor 10-year return on houses and units is influenced by the price boom between the mid-1990s and 2003. But since then, particularly in the key market of Sydney, prices have been treading water, he says.

Advantage of Real Estate -
it is tangible and investors can touch  and feel it, Harder to sell than other assets… which is why it is safer to leverage agaijnst!

 You can buy a $500k investment with $100k deposit and borrow the rest. Just make sure you can afford the possible “negative gearing” – would not do this with shares because of margin calls etc. 

It would be interesting to do a comparison of $100k invested in shares with Divs reinvested and $100k invested in a $500k property with rents offsetting mortgages and taking into account negative gearing tax benefits!!

I will ask my gurus to prepare...

Let me know if you are interested in the comparison!!

Liquidity Finance - Mortgage brokers that deliver

Liquidity Finance - Mortgage brokers that deliver

Interesting article on mortgages and investing... keep loans variable or fix? Competition has heated up and banks are trying to grow their market share from a relatively small pool of business.

As a result, they’re prepared to ‘sharpen their pencil’ and offer an extremely competitive rate to secure a new customer.

If you want a better home loan deal, it might be time to consider becoming a new bank customer with another lender, or asking your existing lender for the type of deal they’re offering new customers. Call Danny or Sandra on 02 92902777 for an obligation free consult!!  Interesting times!!

5 Wealth Creation Tips for 2013

January 2013 - A Webinar to kickstart 2013

WIth the start of the year just kicking off, we thought it would be helpful to provide 5 top tips on how to kickstart your wealth for 2013.  We are please to present our first webinars for 2013. The 'Top 5 tips for 2013' which will cover off the above strategies in more detail plus a few bonus strategies. To register just click on the link below  Top 5 Wealth tips for 2013 Wed 23rd Jan @ 6pm Thurs 24th Jan @ 12:30pm Duration: 30mins  Buying Property in your Super Wed 20th Feb @ 6pm Thurs 21st Feb @12:30pm Duration: 1 hour 1 Start your tax planning now - Although we are still 6 months before the end of the financial year, it is important to start your planning now before it is too late. This can include make extra super contributions, purchasing tax deductible items or purchasing tax effective investments. Reducing tax is one of the most effective ways to create additional savings.  2 Review your loans - With interest rates in a downward cycle and every bank passing on different amounts of the cuts, now would be a great time to review your loan structure. It is not all about getting the cheapest rate, there may be a better structure for you that allows you to save more interest and money.  3 Look at where you super is invested - The share market has had a great run over the last 6 months. You want to make sure your super is invested in the right assets for your situation. This could include international shares, direct Australian Equities or even Direct Property.  4 Invest your excess savings - The disadvantage of interest rates declining is your cash returns become lower. If you have money in savings (high interest or Term Deposits), now would be the time to look at alternative investments and your investment portfolio.  5 Get organised - This sounds simple, but if you have your finances in order it will help you build your wealth. This is because you won't pay any unnecessary fees or charges as all bills/interest will be paid on time but it also allows you to understand what you have and make the most of it. With technology, there is an abundance of software available to help you get organised. If this doesn't work, hire someone to help you.  These top 5 tips sound very generic and simple... and they are. They are not designed to be high risk or complex but to help you along your wealth journey.

Ark Informer January 13

Welcome to the first Ark Informer of 2013. The Ark Team are holding a really useful 30 minute webinar on the "top 5 Wealth Tips for 2013" on Wed 23rd Jan @ 6pm and Thurs 24th Jan @ 12:30pm. See below for more details. (Click on dates to register). Join Me on LinkedIn  http://au.linkedin.com/in/ivankayebsi ( I have over 3,500 contacts that I would gladly connect you with!)

January 2013 - A Webinar to kickstart 2013 Welcome to the first of our education webinars for 2013. In this webinar we unveil 5 effective strategies to help you manage and build your wealth in 2013.  In 30 minutes, we will cover the following; 1. Simple tips to help reduce your individual tax 2. A review of Home Loan Structures and a look at what interest rate you should be paying 3. An analysis of where you should invest your super and a look at some of the best funds from 2012 4. Where to put your excess savings? Looking at alternatives to cash.  5. How to organise and manage your finances easily These top 5 tips sound very generic and simple... and they are. They are not designed to be high risk or complex but to help you along your wealth journey.  At the end of the webinar, all participants will receive a copy of our new e-book 'Wealth Planning for Young Accumulators'.  If you can't make the allocated times, just 'click for an advisor' on the right and we can send you the relevant information. Regards, The ARK Total Wealth Team  www.arktotalwealth.com.au | info@arktotalwealth.com.au Webinars Top 5 Wealth tips for 2013 Wed 23rd Jan @ 6pm Thurs 24th Jan @ 12:30pm Duration: 30mins

Record-breaking mortgage month for biggest broker

extract from API

Liquidity Finance's  aggregator, Australian Finance Group (AFG), processed $3.1 billion worth of mortgages in October, the highest month recorded since early 2009, representing a 14.6 per cent month-on-month increase.

By State - New South Wales, investors are leading the charge and accounted for 43.1 per cent of all new loans in October.

Queensland saw the second highest proportion of investor finance (35.1 per cent) followed by Victoria (33.6 per cent) and Western Australia (29.9 per cent, of which most were First-time buyers).

    

Loan-to-value ratios (LVRs) rose to 70.5 per cent in October, the highest level since September 2009. Higher LVRs typically signal increased activity among first-time buyers.

Refinancing accounted for 34.8 per cent of mortgages processed, but that figure is at its lowest level since September 2009, he says. One in five new borrowers also chose to fix their loans.

Sandra Crossland talking about

Our own Sandra Crossland from Liquidity Finance talking about the opportunity for Women in the Workplace as mortgage brokers! "http://liquidityfinance.com.au/about/team.html">http://liquidityfinance.com.au/about/team.html


As seen on Brokernews.com.au