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404 | What do Inflation, Interest Rates & Broccoli have to do with Property?!

With higher interest rates and tighter budgets on the forecast, some folks have been left wondering… 

How does lifting interest rates – when everything is already so expensive – actually help with inflation??” 

And for today’s episode – what do interest rates and inflation have to broccoli and property?! 

 

To answer this, we’re holding a special 101-crash course in inflation to explain why the Reserve Bank of Australia has taken its course of action and Ben dovetails it all together to demystify how it impacts and interacts with the Australian property market.  

And since it’s a massive Q&A Day, we’ve got tons more inflation-themed questions from folks probably wondering the same things as you! We’re unpacking… 

  • Debt to income ratios (aka. the tool banks use to assess your credit worthiness): how can you restructure your debt to best benefit you?  
  •  And for investors wanting to release equity – beware! We’ve recently been hearing certain tax schemes that can reduce your 20-year loan to …4 years?!  

 

Tune in now folks, this episode has tons of gold on inflation to help you get through these rate hikes.

 

Free Stuff Mentioned… 

  • Fill out PIPA’s 2022 Sentiment Survey: Folks, this year’s Sentiment Survey by the Property Investment Professionals of Australia (PIPA) is perhaps one of the most important ones we’ve had yet! Let us know your experiences as an individual in the property market and have your voice heard. Complete the survey here.  
  • BingeGuide to Property, Finance & Money Management – Download here  
  • FREE eBook – Make Money Simple Again  
  • FREE Book (Just pay for shipping!)– The Armchair Guide to Property Investing  
  • Introducing moorr: our newest evolution of the MyWealth Portal! Check it out here.  
  • Let us know how we’re doing! We want to know if we’re doing the right thing. Leave us a review here and let us know your thoughts.  
  • Watch the RBA’s August Announcement here: Hear the Reserve Bank of Australia’s newest cash rate here.  
  • Send us a question: Be featured in our next Q&A episode! Send us a Question via the SpeakPipe widget here.   

 

Want to work with Bryce & Ben’s Award-Winning Team? 

 

Here’s some of the gold we cover… 

  • 0:00 – A preview of today 😊  
  • 2:00 – The Sentiment Survey + tons of other free resources here!!  
  • 6:38 – 4 Golden Statements that Charlie Chaplin gave us…  
  • 8:52 – Q1) Inflation, Interest rates & Broccoli 
  • 10:11 – Inflation 101: Key concepts to understand!  
  • 12:21 – Was inflation imported into Australia???  
  • 12:59 – THIS is what happens if inflation gets out of control… 
  • 13:52 – So why has RBA taken this course of action??  
  • 15:14 – It’s about creating B_f_e_s  
  • 16:34 – Why Australia’s culture + housing system will ensure we will prevail!  
  • 18:14 – It’s because of these that lettuce and broccoli is expensive!  
  • 20:10 – The Reserve Bank of Australia’s 2 Goals  
  • 21:10 – Q2) Withdrawing Equity and Offset Mechanics 
  • 22:14 – Let’s be clear! This is a finable Tax Scheme!!  
  • 24:24 – Beware of people selling this theory… 
  • 26:20 – Folks, we see so many people make these mistakes!!  
  • 29:12 –How we would solve this…  
  • 31:30 – Going Liquid: Listen to this for options for releasing your equity!  
  • 35:10 – Q3) When Should I buy again? 
  • 37:40 – Should Ben (The question-asker) buy local?? Go through this thought process folks!  
  • 39:30 – The Commuter Belt Reset  
  • 40:04 – Why this question is really about Cost vs. Benefit!!  
  • 41:24 – How do CFOs, CEOs, Paper Planning and this question relate??  
  • 44:02 – Q4) Debt to Income (DTI) ratio  
  • 44:45 – What is DTI (and why does it matter??)  
  • 44:52 – How investors restructure debt  
  • 46:37 – How do lenders calculate your borrowing power??  
  • 48:47 – What happens when your DTI exceeds 6…  
  • 50:05 – The role of Loan to Value Ratios! 
  • 51:40 – Getting a lender who isn’t DTI certified – this is the catch!! 😮  
  • 54:28 – Make sure you unpack these numbers behind the DTI Scare News…  
  • 55:35 – Why new estates have high DTIs!  
  • 58:40 – How to change your DTI + get through this high-interest rate period!  
  • 1:01:40 – Have trouble managing discretionary and non-discretionary spending? Why not try moorr!  
  • 1:02:12 – Does that mean all property prices will drop?!  
  • 1:03:38 – Be a part of Q&A sessions! Send us a SpeakPipe here.  

And… 

  • 1:04:46 – Sticky fingers? Closed a tab by accident? Use this shortcut!  
  • 1:06:18 – How does property interact with inflation??  
  • 1:09:11 – What this means for property owners… 

 

RBA Cash Rate August 2022: Inching Closer to a Neutral Cash Rate!

As we welcome in a new financial year, we welcome another not-so-surprising change…

The Reserve Bank of Australia has once again lifted the cash rate by 50 basis points, bringing the official rate to 1.85%. This marks the most aggressive rate rise in a 3-month period since 1994 (If you’re wondering,  back then the RBA lifted the cash rate by 200 basis points)

Tune in as Ben breaks down what this hike means in the big picture and unpack these key themes:  

  • Is the world’s biggest economy in a recession already?  
  • The manufactured economic slowdown is now in full swing with another rate rise this month 
  • Unemployment surprises in the upside beating all forecasts for July 

 

Plus, Ben also includes his latest news and commentary on…

👉 The good and the bad: US Property Market slowdown & the raw material rebound

👉 Unpacking 2 key US data reports: Consumer Price & Core inflation   

👉 China’s largest COVID outbreak since 2020 – How is their economic recovery looking? 

👉 The European Central Bank’s first cash rate hike in 11 years  

👉 Unlocking the mindset of the Australian consumer – are we in crisis mode? 

👉 Retail Sales & Inflation: The Biggest Predictor of Slowing Rates  

👉 Property Price Slump: Should you be worried? 

👉  CoreLogic’s Home Value Index – 1 August 2022 

And much more! 

 

Additional free resources:

🔥 Episode 169 | Alan Oster – NAB’s Group Chief Economist – on Interest-Rate Rise, Tax Cut and The Future of Residential Property

🔥 Episode 389 | Interest Rate Rise: What this means for YOU! – Chat with Evan Lucas

🔥 Episode 390 | Will Interest Rates CRASH the Property Market?!

 

And One Final Word…

If you’re worried about your finances or if you have no clarity on your cash flow position, we strongly recommend you to organise your finances now. It’s more important than ever to have a clear view, down to the exact cent, on how much you’re spending each month and how much surplus you’ve got. If you don’t know it, then log in to your Money SMARTS Platform here and update the numbers.

Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

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

 

 

 

 

 

 

RBA Cash Rate July 2022: Yet Another Cash Hike BUT Why Consumer Sentiment is not as bad as it seems?

And just like that, we’re back with another jam-packed economic and RBA update!  

This month saw the RBA lift cash rates by yet another 50 basis points, bringing the cash rate to 1.35% – the biggest month-on-month increase in 22 years and the highest cash rate since early June 2019.

Here’s our other key themes for this month’s economic update: 

  • The world’s leading economies are going to manufacture an economic slowdown to curb global inflation 
  • What do we need to do to break our current upswing in the domestic inflation cycle? 
  • Consumer Sentiment – how worried should we be? 
  • A snapshot look at the 2021 Census Data 
  • And finally, an important Property update 

 

Plus, Ben also includes his latest news and commentary on…

👉 US’s largest rate hike since 1994 
👉 The World Bank & The Organisation for Economic Co-operation and Development (OECD) cuts growth forecasts
👉 What’s IN and OUT of Australia’s control with its inflation story?
👉 The positive figures in Wage Growth and Unemployment in Australia
👉 The role oversupply is playing in today’s property prices
👉 CoreLogic’s Home Value Index – 30 June 2022 

And heaps more! 

 

Additional free resources:

🔥 Episode 009 | Buying Counter Cyclical
🔥 Episode 73 | Building a property portfolio in a tough market – Chat with Damian Collins
🔥 Episode 76 | Building a property portfolio after the boom – Chat with Veronica Morgan
🔥 Episode 389 | Interest Rate Rise: What this means for YOU! – Chat with Evan Lucas 

 

And One Final Word…

If you’re worried about your finances or if you have no clarity on your cash flow position, we strongly recommend you to organise your finances now. It’s more important than ever to have a clear view, down to the exact cent, on how much you’re spending each month and how much surplus you’ve got. If you don’t know it, then log in to your Money SMARTS Platform here and update the numbers.

Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

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

 

 

 

 

 

 

RBA Cash Rate June 2022: Onwards & Upwards: How high will interest rates go?

The RBA has released its June update and boy is there a lot going on!   

Not only do we have a new Federal Government behind the wheel, but after lifting interest rates for the first time in 11.5 years in its May update, this month saw the RBA lift cash rates by a massive 50 basis points, bringing the cash rate to 0.85% 😲

A certain sector within the property market is also facing a new threat…how will it impact the wider industry if it crumbles under pressure?  

Tune in to this episode where Ben explains this challenge and unpacks these three key themes for this month’s economic update: 

  • The persisting global inflation challenges
  • We have a new Federal Government with their hands on the economic wheel – the big question is, how well can they drive? 
  • The RBA is at it again increasing the cash rate – and they’re not done yet…

 

Plus, Ben also includes his latest news and commentary on…

👉 Russia and the Global Oil Story: How will this tale end?
👉 China faces the largest fall in Industrial Production in 32 years
👉 The persisting worldwide inflation challenges
👉 How good is the Australian economy compared to other global players?
👉 The RBA’s decision: How soon can we expect it to rise again?! 
👉 What challenges have the new Federal Government inherited?
👉 The New Build Crisis: Will it cause the wider market to slide under pressure?
👉 CoreLogic’s Monthly Dwelling Princes Index – June 2022
👉 Overall Property Market Outlook for mid-2022  

And much more! 

 

Additional free resources:

🔥 Episode 73 | Building a property portfolio in a tough market – Chat with Damian Collins
🔥 Episode 76 | Building a property portfolio after the boom – Chat with Veronica Morgan
🔥 Episode 389 | Interest Rate Rise: What this means for YOU! – Chat with Evan Lucas 

 

 

And One Final Word…

If you’re worried about your finances or if you have no clarity on your cash flow position, we strongly recommend you to organise your finances now. It’s more important than ever to have a clear view, down to the exact cent, on how much you’re spending each month and how much surplus you’ve got. If you don’t know it, then log in to your Money SMARTS Platform here and update the numbers.

Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

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

 

 

 

 

 

 

391 | War of the Property Policies: Which is the Winner?

With the Federal Election fast approaching, you’ve probably heard A LOT of noise around stuff like climate change, international security, and aged care funding… 

But as a property investor, you’re probably wanting to know: 

What do the parties’ property policies mean for you!?!  

We’ll be breaking down and comparing Liberal’s Access to Super policy and Labour’s Help to Buy (Shared Equity) policy and answering: How do they fit into the big picture?!? 

Like…

  • Will either policy help Australia’s economy?
  • Will dipping into your Super help or hinder future wealth creation?
  • And which demographic of people will benefit from which policy? (Plus, LOTS MORE)   

We’ll also be covering Liberal’s existing policies and turning the mic over to…our listeners!!  Yesterday we asked our Facebook Tribe for their questions around both parties’ property policies and MAN we were blown away!!   

You guys gave us a run for our money  (A big thank you to everyone who left us a question!!), and we’ve now got a fantastic lineup of Q’s that we reckon a lot of you are probably wondering too! 

So if you’re ready to get up to date with this year’s property policies and what they mean for YOU, then tune in now!!  

👇 Full list of questions below!! 👇

Questions we Answer

Q1) James Watson:  

“Am I missing something? I genuinely can’t see the benefit of the super housing policy. If you have a 5% deposit, if you qualify for and can service a loan, you will be far better off paying mortgage insurance than gutting your superannuation. Further, if you have a 5% deposit and you have the full $125,000 in your super and you borrow the maximum $50,000 and you’re looking to buy something at around 650-700,000 (ie. you’re not in a capital city), you will still have to pay LMI. So what is the point of this? Seems it will simply drive house prices up”

 

Q2) Marc Hooper 

“Would the LNP be better using Super as collateral against a loan rather than taking it out? Super should be for retirement. 

I feel taking super money out prematurely is bad policy. 

Are they trying to give us all higher interest rates? These policies will increase housing prices feeding inflation and giving RBA the need to raise rates. Do you feel that will lead to higher inflation and maybe rates? 

Love the ALP policy as is. But feel it will feed into inflation. So ill timed.” 

 

Q3) Svend Petersen 

“I reckon the LNP may have just lost the election with this dumb idea. Let’s fix the housing supply problem by increasing demand??? WTF?”  

 

Q4) Matty Tippowicz 

I think both policies are very poor ideas, especially Labor’s. Who the hell would want the government owning 40% of their property? 

 

Q5) Michael In-ski 

I’m a 32 year old professional. My super sits at about 40k today. I don’t know if anyone else is in the same boat as me but doesn’t seem like it’ll get me anywhere. Question: who will benefit from accessing super? Average Age, professions etc

 

Q6) Emma Benic 

What’s to stop someone selling the property, blowing all the cash and then needing the aged pension? 

Will they put stops in place that force funds to go back in to super? Or has this been overlooked?

 

Q7) KeLee Gee 

Access to super: will this be within the current SMSF route? 

Share equity: can people buy out the govnt share of their property? 

At what point the agreement ends? Death? Forced sale or refinance in certain timeframe? 

Both schemes: What are the limitations to type, location, age, condition of the property? 

 

Q8) Graeme Ash 

With shared equity, do you have to pay out their percentage on sale? Once again it would leave them short to make the next step on their journey. 

 

Free Stuff Mentioned… 

  

Here’s some of the gold we cover… 

  • 3:54 – Don’t fall into the trap of S___ P____!  
  • 6:40 – We reckon you should be viewing property policies like THIS… 
  • 9:05 – What is the Super Policy!? (Plus an explanation + history lesson on what Super is)
  • 15:00 – What we think about the Liberal’s Super Property Scheme!  
  • 20:44 – The Older Australians Downsizing Policy (aka. What Ben calls “a golden handshake”!)  
  • 24:50 – What are the Liberals’ other Property Policies?  
  • 27:56 – Labour’s “Help to Buy” Property Policy explained  
  • 31:00 – Why you shouldn’t panic over policies “causing” Inflation (The numbers don’t lie folks!)  
  • 35:34 – Labour’s other policies + Wrap!  
  • 36:25 – YOUR Q&As: Q1 – What’s the benefit of the Liberal’s Super Policy?! (Ben runs a pretty cool simulation here!)  
  • 47:42 – Q2 – Will it lead to higher Interest Rates??  
  • 50:30 – Q3 – Impacts on Housing Supply & Demand  
  • 51:54 – Q4 – Who wants the Gov owning 40% of their property?!  
  • 52:25 – Q5 – WHO will benefit from the Super Policy?  
  • 53:24 – Q6 – What’s to stop someone blowing all their Super & living off the aged pension? 
  • 54:47 – Q7 – Self Managed Super Funds & Buying out the Gov’s share of equity  
  • 57:59 – Q8– Paying out the percentage of the sale 
  • 1:01:05 – Our top takeaways! 
  • 1:05:38 – Listen to this if you’re not a fan of the Super policy!  

And… 

 

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