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RBA Nov 2018 Announcement – When Will RBA Move Rates?

Hello folks, as promised, we’ll be posting Ben’s short commentary on the RBA Cash Rate Decision on a regular basis!
Let us know if you like this segment below! 🙂

So, on this Melbourne Cup Tuesday, what will be RBA’s decision on the cash rate?

Let’s start with some positive news! The seasonally adjusted unemployment rate has unexpectedly dropped to 5% in September 2018, the lowest job rate since April 2012 while markets estimated 5.3%. But what about wage growth?

Ben will be unpacking how this will be affecting the RBA’s decision to move the cash rate, which had been at 1.5% since August 2016. And of course, a bit of an update on the equity and property market as well!

There’s still buying opportunities in that particular market; but you’ve got to be very, very careful in terms of where you’re buying. So stick to the fundamentals and focus in on where you’ll get that good return over time.

Looking for the CoreLogic’s Monthly Housing Update? Click here to find out more!

If you’d like to check out his previous commentaries, click here.

 

 

 

 

DISCLAIMER: This video is general information only and is an opinion comment by Ben Kingsley. The information contained in this video is for Australian residents only. The information does not take into account the particular investment objectives or financial situation of any potential viewer. It does not constitute, and should not be relied on as, financial or investment advice or recommendations (expressed or implied) and it should not be used as an invitation to take up any investments or investment services. No investment decision or activity should be undertaken on the basis of this information without first seeking qualified and professional advice.

The Property Couch, its employees or contractors do not represent or guarantee that the information is accurate or free from errors or omissions and therefore provide no warranties or guarantees. The Property Couch disclaims any and all duty of care in relation to the information and liability for any reliance on investment decisions, claiming the use or guidance of this publication or information contained within it.

For more information, please visit: http://thepropertycouch.com.au

 

Episode 196 | Q & A – Negative Gearing Changes – Should I Still Invest in Property?

“Labor risks $12bn housing hit over ending negative gearing” — if you’re like us folks… this headline has us all concerned!!

And the concern didn’t stop at the headline.

As we read on, the full news article, published by The Australian on the weekend, highlighted that the $32 billion plan to end negative gearing would — quote — lead to a fall in new housing construction of up to 42,000 dwellings over five years and 32,000 fewer jobs across the country, according to independent modelling — end quote.

Yep… that’s a drop in a whole lot of new housing construction (ie. supply) AND just a-bit-more-than-a-few losses (up to 32,000) in jobs!!

Folks… this is crazy stuff.

And those stats aren’t the only ones coming out of recent independent research digging into the numbers of what’s likely to happen if negative gearing’s ditched.

So, today we’re looking at a few of the worst-case scenarios from two different reports (the links to both of these are further down in the show notes) and unpacking — with both a short term and long term view — how this change to negative gearing might affect the property market and those investing in it.

But negative gearing changes — and the possible consequences on housing prices and for first home buyers — isn’t the only question we’re answering today! We’ve got plenty of gold on how to time your exist strategy, retiring debt and the right asset to invest in!

 

Oh, and if you’d like the Geospatial Heat Notes — the heat map that shows the Compounding Annual Growth in Median Value for Houses from 1974 till the end of 2017 that is sourced from the Valuer General data —  you can get them here.

 

Back to today’s Q’s…

Question about Negative Gearing Changes from Shadi:
Hey Bryce and Ben. Thank you for all the information and for all the podcasts you provide. Apologies in advance if this question has been answered in previous episodes. I’ve been binging myself since episode 1 a few months ago, and am not quite up to date yet. I just have a question specifically about the abolishment of negative gearing and the impact it will have on first time investors. I’ve been looking to invest since listening to your podcast, and am interested to hear how this will affect my first purchase — whether or not it will just be a short term problem that effects cash flow or if it will have a long term effect, especially when entering the market.

 

Question about Your Exit Strategy from Anne-Marie:
Hi guys, this is Anne-Marie in Victoria. I’m 56 and my husband is 51. I started listening to you many years ago after we had our 7 properties. Our last property was 3 years ago. There all on fixed term interest only, which makes no offset available to them. And we’ve paid off our home, which is worth 1.1 million (1 of the 7 properties). It takes us $13,000 a year to hold all the properties, we just put our tax in, which is amazing. So property has done really well for us, and the mortgage we have on all of them is about 2.5 million, with domain value being low sitting at $3.9 mill, and high $5.2 with middle there all about 4.6 million. I want to start going into doing less hours at work — I’d like to retire on a passive income in maybe 4 years’ time. How do you transition to get the passive income we’ll need for retirement without too much of a tax liability? I paid about $10K in tax this year and I really don’t want to be paying a lot of tax while I’m getting to this point. Can you give me any pointers? And I can’t have an offset account as I said. I’d like some advice on this.

 

Question about the Right Asset for a First Home Buyer from Carrie:
I have a question about the best type of asset you should invest in. I’m looking to buy my first property, which I’ll live in initially. I have a budget of $750K. I’ve been looking at 70s and 80s free standing villa units in small blocks of 12 – 6 in Melbourne’s east. This puts me in middle ring suburbs around 20km from the city, with a land size of 350sqm. It’s a good balance between decent landmass without being out in the sticks. Alternatively, I could by a 2bdrm apt in an older, low density block — the type with only 2 or 3 stories closer to the CBD. Are either of these good investments? And which of the two is better? Or is there anything else I should look into. Love your work guys, keep bringing out those podcasts! Thank you

 

 

The Articles Ben mentions:

The Australian Article — Labor risks $12bn housing hit over ending negative gearing

Housing Industry Association (HIA) — Media Release

 

Achieving your Great Australian Dream on Weekend Property, Today Show!

This time on the Today’s Show, Weekend Property, Bryce and Ben chat with Peter Stefanovic and Deborah Knight on suburbs

Hope you enjoy this segment! If you’d like to learn more about affordability and achieving your Great Australian Dream, here are some helpful episodes! >>

 

And there are heaps of other free resources on our website. We update them every week so make sure you check them out before you go. 🙂

Any questions or suggestions for new topics? Just send them in to info@thepropertycouch.com.au or fill in the form below and we’ll chat about it at our future Q&A episodes.

 

 

 

Significant Urban Area (SUA) Tracker Report | October 2018

Spring is definitely in the air and so is hay fever. But are Australia’s Significant Urban Areas affected by it as well?

As mentioned in Episode 193, we are sharing LocationScore’s SUA Tracker Report for October 2018!

Fill in the form below to download the Report now to get access to it now.

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What’s in this SUA Tracker Report?

In this month’s SUA Tracker, we see Ballarat on its 6 consecutive upward trend to a LocationScore of 70. But it’s still slightly behind Hobart which is holding its high score of 74. Meanwhile, the cities of Sydney, Melbourne, Brisbane and Adelaide are still holding their Location Score in the 60s.

What’s also interesting is the rise of Mackay. 3 years ago it had a very low score of 36. Now the LocationScore is up to a very healthy 60. But will it keep going or start levelling out?

But of course, we’re not just focusing on the positives here cause not all of the markets are on an upward trend. Wollongong’s LocationScore for example has slid around 10% in the last year and there are a couple of SUAs that are showing slight downward trends such as: Port Macquarie and Busselton.

Overall, most of the suburbs in this month’s SUA Tracker are maintaining their current LocationScore.

Download the Report now to find out more.

Note: LocationScore’s Top 50 SUA Tracker Report is available to paid LocationScore subscribers every month! Not yet a Subscriber? Subscribe to LocationScore now and get access to this report every month as well as: Suburb Analyser Reports covering thousands of House and Unit markets across Australia; Top 250 Fast Track Filter on each state and more! And since you’re a listener of The Property Couch, use this code for a 20% OFF discount: TPC20

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ps: We’ve got heaps of other Free Resources on the site! Make sure to check them all out here.

 

 

Episode 190 | Q & A – Addressing Media Alarmists, Investing in Your 50s and The Truth About Lenders Mortgage Insurance…

If you’ve heard the latest media reports, folks, you might have reason to believe the property market is all bricks and slaughter… but is that really the case?

Today on the Couch, we’re addressing media alarmists — the recent noise shouting out alarm that they’ll be a total housing crash in Australia! So… is there any truth to the gloom and doom?

PLUS, we’re deep-diving into investing later in life and what this really looks like for people in their fifties, including the ramifications of investing in property can have on pension allowances.

And, of course, Lenders Mortgage Insurance… let’s run the basics, and work out when too much is WAY too much!

Before we kick off the Qs… guess what??

 

If you want the 30% discount on our new book Make Money Simple Again you need to join our waitlist BEFORE 11:59PM TOMORROW  (Friday 21st September 2018)

Yes, this is a limited-time only discount, folks!

>> CLICK HERE to Get 30% Discount of our New Book

 

And before we jump into the questions, here are some recommendations from Stiggy to help you go through this episode:

  • Do you want the recording from on the VIC Residential Tenancies Act Amendments? PICA will be sending out the slides AND the replay to their members next week. Not a member yet? Click here to join.
  • (Spoiler Alert) And finally… Here’s the link to the Granny Flat that we’ve chat about on today’s show. Make sure you consult a qualified and experienced Financial Planner before making any investment decisions folks! 🙂

 

Alrightey, let’s get to today’s questions!

Question about Investing in Your 50s from Darren

Me and my wife made a mistake late in life. We bought a house and sold it back in 2000, so we’re not first home buyers. We’re 50, looking forward to getting on the property train and have a good income of about $180K per year. We have about 4.5K in disposable income that we can put into property. Given everything I’ve heard from you guys, how could a couple, now 50, with that available cash, make their way through to give themselves a passive income by mid-60s, earning $80 – $100K per year in passive income. We were thinking of buying a house for around $450K, perhaps on the north side of Brisbane, around Petrie and Kallangura area, and we could smash out as much as we could in a year and a half, build up some equity and buy then move onto the 2nd house with a maybe a bit of renovation between. So my question is: how do people of our age group get onto the property ladder and make this happen for ourselves?

 

Question from Steph the “Serial Coucher”

We’re looking at purchase a home from my father in law over a period of time. Essentially, he is an asset rich, cash poor retiree who is living fortnight-to-fortnight on the pension. Yes, it’s certainly an emotional driver, but the asset does stack up. So my question is: how does something like this work? Can you acquire traditional financing, or is it a specialty class of financing? And what specialist should we look to engage? I want to get as much info as possible before even bringing up the subject with him. Thanks guys!

 

Question about Lenders Mortgage Insurance from Alasdair

I’m looking to increase my portfolio from 2 Investment Properties (IP) to 3IPs, and possibly a 4th. I’m sitting at around about 90% when I get my loans. I read somewhere that around the $1million mark it gets difficult. And I’ve heard that the global portfolio is impossible to get it over $2.5 mil. Can you speak to that idea?

 

 

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