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RBA September 2019 – Is the Australian Economy REALLY that bad?

By in Podcast, RBA Announcement

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Businesses cut back as weak economy puts pressure on profits. Australia managed to survive the global recession – but all that good work has been wasted. The worst surplus ever: ‘Obsession’ rocking the Australian economy.

These are just some of the headlines when you search for “Australian Economy” on Google. Is it really that bad? Are we really going towards a rocky time? What does the fresh data telling us?

That’s what Ben will be explaining in today’s RBA commentary folks! Apart from that, he’ll also be covering a variety of topics such as:

  • What’s happening with the US-China Trade Deal and what’s President Trump is hoping for?
  • Are there anything else happening around the world that has a direct impact on Australia?
  • Is the Australian Economy as bad as the media is saying it is?
  • What’s the main focus for the RBA at the moment?
  • How’s business confidence now that more post-election data is available?
  • And more!

Now, let’s dive into RBA September 2019 Cash Rate Announcement!

 

DISCLAIMER: This podcast 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

244 | Borrowing Power in 2019: Everything You Need To Know

By in Podcast

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APRA has recently made changes that affect a lender’s borrowing power — what does this mean for property investors and home owners… and their interest rate?

Well, folks… we’re deep diving on this today (and getting a little bit technical), because in July 2019, the Australian Prudential Regulation Authority (APRA) came out with their revisions to the “buffer” and “floor rates” of their Prudential Practice Guide APG 223.

And why are we telling you this? In a nutshell: this results in a change, potentially an increase, in a lender’s borrowing power… which means YOU can potentially borrow more money!!! (Not sure why this is a good thing? Listen to this episode on the basics of borrowing power first).

Now, if you’re wondering what on earth we mean by “buffer, “floor rates” and “potentially”… take it easy… we’ve totally got you covered here — we explain all this, incl. examples of a single person AND a couple, so you can get a “real life” angle on all this. Plus, Ben’s obviously in his element so he drops a lot of new gold and mortgage broking insights!

Oh, and did we mention that we’ve also sneaked in a little Finance Q&A as well?? Yep, true story. You can find the exact questions a little further down in these show notes 🙂

 

Free Resources

 

Key Learning Points

  • Debrief: How do APRA’s changes affect borrowing power?
  • Why is Ben describing lending in 2020 with the world throttle?
  • What is the variance in borrowing power of Principle and Interest vs. Interest Only Home Loans now? What does that mean for an investor?
  • Quickstart History Guide on Lending
  • What has happened to the Floor Rate?
  • What is each of the “big four” bank’s NEW floor rate?
  • What is a Sensitivity Margin?
  • How did poor regulation contribute to the Global Financial Crisis?
  • What’s a gig economy?
  • How much is the Commonwealth Bank of Australia (CBA) now spending per year to rectify and enforce new changes following the Royal Commission?
  • Example: A Single Person’s Borrowing Power
  • Example: A Couple’s Borrowing Power

 

The Questions

Question from Bella

We just bought a house and are setting up our loan. Should we get our wages put directly into our offset account and then pull money into our everyday account for expenses and keep a minimum amount in there, say $2,000? My husband wants to do it the opposite way. And just pay our offset with leftovers after expenses. What should we do?! HELP! 

 

Question from Todd

Hi Ben and Bryce, Love your podcast! Have learnt so much since I found it 6 months ago. My question is loan structure related, with tighter lending these days is it an optimal strategy to split my PPOR Loan into 3 or more splits so I can pay them off quicker and then re-borrow once payed off to invest? Or is it better to build up a large sum in my offset account? Thanks in advance guys and go Eagles Stig!

 

Question from James

With the RBA’s drop in interest rates to 1%, I (like most people) are considering refinancing away from my current mortgage provider. We have been looking into a few options, but keep hitting a hurdle due to being on one wage and having 2 properties (our owner occupied and one investment) as I am currently on a non-permanent workers compensation payment through DVA, the banks will not recognise my wage as a salary.
So, my question is, with APRA’s change and loosening the reigns on lending, has this already came into effect? If not, when is this due to be implemented by the banks? Thank you

Question from Stuart

Hi Bryce and Ben, long time listener, first-time caller from NZ. Love listening to all your podcasts every week. Quick question regarding my PPR and mortgage offset. I have received a windfall, which I am wondering the best use of. I could put it all into my offset account against my mortgage and with my current offset savings this would 100% offset my mortgage and I continue to pay it down over the next 10 years. Or am I better off paying down a large portion off it immediately leaving the balance fully offset to pay off over just a few years. I guess it’s a matter of keeping the offset bucket full against the mortgage, or paying down the mortgage ASAP. I also have 1 investment property, which I’ll need to reorganise to start offsetting ASAP. Hope that makes sense, thanks.

 

And here’s the table that Ben promised on the show! 😉

 

 

RBA August 2019 – Should you be FIXING your Rate?

By in Podcast, RBA Announcement

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This is NOT the time to fix your mortgage.

It’s odd, isn’t it? The cash rate is on an all-time low and the lenders have been cutting their rates, both fixed and variable. So why is it not the time to go for a fixed loan?

We know it’s a big statement and that’s why Ben will be explaining all that in today’s RBA commentary folks! Apart from that, he’ll also be covering a variety of topics such as:

  • What’s happening with the US-China Trade Deal and how did the US Chair of Federal Reserve, Jerome Powell reacted to it?
  • What’s the main focus for the RBA at the moment?
  • How will the slight improvement in inflation impact the economy?
  • Is retail spending moving in the right trend?
  • Have we finally bottomed out in the Property Market or are there a couple more months to go?

Now, let’s dive into RBA August 2019 Cash Rate Announcement!

 

DISCLAIMER: This podcast 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

Bonusisode with Nerida – US-China Trade Wars | How does it impact Australia? 🇺🇸 🇨🇳🙄

By in Podcast

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It’s that time again for our Monthly Wrap Up with Nerida Conisbee, Chief Economist for REA Group!

And we’ve introduced a new style to our monthly catch up too! Nerida has generously agreed to use the white board to explain this whole US-China Trade War thing because let’s face it, not all of us are across it. So… what to expect in this Bonusisode?

 

The Top Insights in this Bonusisode:

  • Exactly what impact does the US-China Trade Wars has on Australia?
  • The Cash Rate Outlook – where is it heading?
  • How will that affect the Property Market Outlook in each of the major cities?
  • And of course, the usual most viewed and most expensive listings!

 

Plus, The Top Performing Properties from the month:

  • The Most Viewed Rental Property
  • The Most Viewed Residential
  • The Most Expensive Property Sold
  • The Most Viewed Property Going To Auction This Weekend

Want to see these properties? Click here to View the Properties (all are in the Comments section)

P.S. Want more from Nerida?

RBA July 2019 – Twice in a row??

By in Podcast, RBA Announcement

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75% of economists predicted another rate drop… Are they right?… or wrong?

As mentioned previously, unemployment and wage growth is a priority for the RBA and despite last month’s cut, there wasn’t a lot of movement found in these two economic indicators.

So the RBA Board has decided to drop another 25 basis points bringing the cash rate to 1%. Find out what other factors have triggered this decision including if the US-China Trade Deals has anything to do with it!

AND if you’d like more data on Ben’s commentary today, here are a few resources:

Now, let’s dive into RBA July 2019 Cash Rate Announcement!

DISCLAIMER: This podcast 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

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