Do Changes to the Aussie Dollar Actually Mean Anything to the Property Market?

There is always speculation about whether fluctuations in the Australian Dollar are going to affect the property market. This is how many newspapers and forums get your attention. The headlines alone, whether the Aussie dollar is going up or down, are enough to create further speculation.

So what does it mean to the average home buyer looking to own property? The truth is, very little. There are always going to be surges and drops in the market and they are not all as a direct result or even have anything to do with the value of the dollar in ANY country.

There are so many variables that may affect the housing or industrial property markets that you cannot lay blame on what the currency value is alone.

So what other market variables should be considered?

Unemployment
High unemployment will definitely affect the market. This is due to an increase in foreclosures.

Oil and Commodities
An increase or decrease in the cost of these essential products can affect how much money people are spending at any one time and how much spare cash they have.

Tourism
When the Australian dollar is low, coming to this great country is way more attractive and certainly more affordable. The influx of overseas tourists, yes due to the low dollar, can change and affect property values should these tourists also be interested in buying property.

The Reserve Bank
The Reserve Bank controls the cost of lending money. We all wait with baited breath every time the Reserve Bank is going to release its findings.

Lower interest costs mean that consumers spend more. Higher interest costs would seem to mean less spending but not in all sections of the market.

What Does it All Mean?
If you have all of these factors in alignment, the moon is full and your tongue is hanging the right way, you may be able to predict and pinpoint the exact time to get in and out of the property market.

Time and time again, the economists have had it wrong and we have all survived.

What we say at Fountain Property Group is – go back to basics.

Do a budget to ascertain if you can afford to enter the property market.
Ensure you have enough capital (deposit) to invest in the deal.
Do your due diligence! – Research, research, research
If you do these three things, it does not matter what state the dollar is in when you enter the property market, you will be on a winning course.

What Are Clearance Rates In Real Estate Talk?

When you hear or think clearance rates you might be forgiven for thinking that there is a big sale going down somewhere and you better get in quick. Well, probably the only word in the last sentence that relates to real estate clearance rates is the word ‘sale’.

More importantly, clearance rates in this industry relate only to properties that are sold (or not) via the auction process.

Who Gathers the Data
Apart from each individual Australian state Real Estate Institute gathering some form of this data, there are two major companies that formally gather this form of information Australia wide. They are RP Data, and Australian Property Monitors (APM).

Interestingly, these two major companies go about the gathering of this data in very different ways. It is not as simple as saying 10 properties went to auction this week and 8 of them were sold under the hammer for an average of “x” dollars.

They each have their own criteria that they use to garner the information required. The criteria that can be used by both are how many properties:

  • Were advertised for auction,
  • Were sold at auction,
  • Were withdrawn,
  • Sold before auction,
  • Sold after auction,
  • Were passed in at auction.

Each of these can be diluted even further. For example: they may only include sales made within 24 hours of auction completion. For some, the negotiations may take a day or even week or longer.

One of the companies may not include withdrawn property data. You can see how this may change the relevance of any published results.

The one contributing factor to this house of cards is the reporting. It is up to the individual agency to report the results of any and all auctions. In a good market, they are more inclined to report their successes. But in a bad market…….. You fill in the blank.

The One True Guide Post
Deakin University conducted their own research into the anomalies of this subject.

They advised that at times the clearance rate was obtained from a very small segment of the market. They also pointed out that such things as the number of bidders present for an individual property as compared with competing auctions, as well as the number of bids received were not recorded. Nor does this form of reporting show how many, if any, properties exceeded the vendor’s reserve.

The other interesting fact they discovered over this 5-year study was that the data received actually showed a correlation between auction prices achieved and actual property prices as very similar.

What Fountain Property Group can confirm is that sale by private treaty is still by far the most common form of property transaction used in Australia and our choice of negotiation.

Building Your Retirement Nest Egg

Did you know that you cannot insure a share portfolio or term deposit?

Any risk or negative outcomes that may evolve from a drop in the market in these two investment options cannot be protected in any way. If you don’t know what you are doing, you could end up paying off shares that are worth nothing.

When you invest in property you can relax knowing that through fires, storms, busted pipes or any other number of accidents, you can insure your asset against damage and have it repaired without forking out more cash.

Tax Benefits and Incentives

Perhaps because housing is always in such demand the taxman smiles upon the investment of property like no other investment. All sorts of tax breaks and incentives are offered to assist with this form of investment.

Time Poor?

Fountain Property Group are not your average real estate agents where you can come and list your house and we market and sell it for you.

We are a company that sources properties for buyers and we are not restricted by any territories or boundaries like some of the major agencies are. As such, we have full flexibility to go wherever the market is hot or where we feel an area is poised for growth.

We source properties in strategic areas and only after completing our full due diligence on each and every one of them do we offer these to our clients. This is the most important step you can take in any property deal. It is essential that the properties we offer have met our strict criteria.

Our services go even further beyond this as we are able to design the correct structure required to purchase property, thus ensuring our clients also gain maximum tax advantages.

Let us guide you from beginner through to seasoned entrepreneur with our proven program.

Nearly 20 Years’ Experience

Knowing where to look and what to look for is not something easily gained. It can take years of being in and around the industry before you start to get a handle on its ebbs and flows. Are we the experts? Our short answer is yes, but we are not cocky about it. We continue to research and educate ourselves to ensure we stay on top of the trends.

Anyone Can Do It!

It does not matter whether you are a savvy developer, builder, banker, or a mum and dad investor.

With the money, the right advice, guidance and decisions, anyone can make a success of this form of investment.

Employer Funded Super – Helping It Work Harder

There is no doubt that investing in just about any kind of superfund is better than doing nothing. For some recently retiring baby boomers and the streams to follow them until 2028, there will be a vast number who will fall short of the dollar value required for them to retire comfortably with.

As this system was only introduced by the Keating Government in 1992, you can see how many of the early boomer births would not have created enough of a nest egg before they started retiring in 2011.
There is, however, absolutely no doubt though. If you get into your super early you are bound to make a huge dent in your retirement bill. How does setting the course to true freedom feel? Did you know that there are some real advantages in this system that not enough people are just not taking advantage of?

 

Tax Benefits

There are a few ways you can use your employer funded superannuation to your tax benefit.
You can make concessional payments into your spouse’s superannuation after tax is allocated. This may not seem attractive until you see note 2 below. You can salary sacrifice and pay up to $50,000 into your superannuation and only pay 15% tax. What a lovely nest egg. The Government will match your contributions dollar for dollar for any money paid into your account over and above the minimum your employer pays. This is also capped. That is to say, the amount you can contribute is capped. But wait for it, at $150,000! Whilst the Government only contributes a small amount you can see how the incentives stack up when you consider the whole lump sum compound interest that occurs when cash is invested long term.

Fountain Property Group are firm believers in ensuring your superannuation is progressing as well as if not better than CPI does. Visit it often to ensure its growth. It is important to keep that investment moving to gather as much investment momentum as possible. By adding to the fund yourself you add to the momentum to bring more energy to the investment.

Rome Wasn’t Built in a Day This form of investment is called delayed gratification. You sacrifice a little now for big returns at the end. This may seem a lot to some but just an extra $100 per month into your super and your money is doubled straight away!

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Time Management Tips To Improve Productivity

It is common for people to get lost with work in the office and lose track of important tasks that can help boost one’s productivity in the workplace. Here are several things you can try to improve your time management and get the important things done.

Analyse tasks. Make use of your time and effort for tasks that require immediate attention. If you have a task that you can do along with others in a single sitting, take note of these tasks and tackle them when the important ones have been accomplished.  Some tasks can take up much of your time but are not a priority, making you spend less time on those that need to be accomplished first.

Focus. There are several things you can do to re-focus.  If you need time to accomplish tasks and discourage interruptions, you might want to retreat to your office or cubicle. You wouldn’t want to do this for too long, take time to have breaks in between and mingle with your workmates for a quick chat.

Clear your clutter. A messy desk does not invite productivity because – like your clutter, your mind is all over the place all at once.  Clean up your desk and only have things that you are working on visible so that it captures your eyes and attention.

Take control of technology. Set certain times of the day to reply to email, and check it after lunch and before you leave the office, so that you can avoid losing the first couple of hours to technology.  Divert all your calls to voicemail, and set a time in the day to check it so that you can avoid distractions and get your tasks done.

Reminders. Make use of technology to organise tasks. Always take note of tasks that you plan to accomplish throughout the day – do not simply rely on remembering tasks without jotting it down.

What Do The Banks Look For?

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Whether you are just starting out or a seasoned property investor your lending institution possesses important criteria that must be satisfied if you are to proceed down the road of investing, growing and holding your wealth in real estate.

So what do the lending institutions look for when considering the benefits and risks of lending money?

We have a favourite list called the 5Cc’s of Success that Fountain Property Group would like to unpack for you. Every lending institution will assess these five things.

  1. Credit worthiness
  2. Capital
  3. Collateral
  4. Capacity
  5. Character

Let’s start at the beginning.

Credit Worthiness

A good way to start your journey to fortune is to set down a good base on which to build. You may not realise it but your every credit move is monitored and defaults on loans are reported.

This means the television, sound system, or white goods you purchased on your Myer card. It means that personal loan you took out to buy a new car. It means the credit card you use for everyday expenses.

To achieve excellent credit worthiness, it is essential to have a proven record highlighting you honouring your part of the bargain by paying the required amount on time, every time.

Capital

In most cases, a lending institution will require you have some money behind you to help finance your venture. This figure may range from a 10% – 50% deposit and is governed by the outcome according to the other four C’s.

Collateral

There is not a lending institution alive that would lend money without ensuring that their risk is covered. This will usually come from the asset being purchased but may come from other sources such as other property or possessions.

Capacity

Your ability or capacity to pay the minimum required payment will also be assessed. During this assessment, your other commitments must be taken into account. It is imperative to prove that your current income covers your current commitments and can incorporate further debt.

All sources of income can be offered for assessment. These may include:

  • Wages from your place of employment
  • Rental income
  • Stocks and Bonds
  • Passive income

Character

Whilst it is unlikely that your bank will require you to be submitted to a psychological test it does not mean that your character cannot be assessed. Vital information can be gleaned from the simple knowing of your employment record and living conditions.

By this, we mean the bank wants to see a record of steady employment; the longer the better. The same goes for your living conditions. Whether you stay in one place or move around a lot will also be assessed.

Deloitte: Queensland Set to Overtake All States in Economic Growth

Speaking at an international investor roadshow, Treasurer Curtis Pitt agrees with Deloitte’s assessment of Queensland’s economy for the upcoming years, citing tourism, agriculture, housing and growing LNG exports as major strengths of the Sunshine State.

Deloitte’s Queensland Business outlook for September predicts Queensland to outperform all other states in economic growth for the next two years. Forecasts show that Queensland is set to record a 4.5% economic growth this fiscal year, and 4.0% in 2016 – 17.

Deloitte points out Queensland’s diverse economy as its major strength, as it has established industries in agribusiness, education, tourism and gas.

International visits are set to increase by 4.9% over the next three years.

Read more about this on the Australian Property Investor website.

Tax Savings: The Quick And Easy Way

Planning for tax deductions when completing your tax return can be tedious, especially if you are unsure of claims you can qualify. Interestingly, there are some expenses that will allow you to qualify for a tax deduction, provided that these are directly deducted to your income. Here are some of the tax deductions you can claim – you will be surprised at how much you can save!

Travel deductions

You can claim travel deductibles from work – related travel, provided you keep records of your travel expenses. Daily travel expenses are not included, as it is considered private travel. Keep receipts for fuel, oil, repairs, insurance and registration.

Clothing deductions

Claims for clothing include company issued uniforms, protective and occupation – specific clothing. Keep records of purchase, as well as receipts of your cleaning costs.

Donations

When you donate to organizations that have DGRs, or Deductible Gift Recipients in the form of money or even shares more than $2, you are entitled to a deduction. The gift must be voluntary, and you should not receive any form of advantage in return. Bushfire and flood donations can be covered even without a receipt, provided the contribution does not exceed $10.

Home Office deductions

If you have a home office, you can be eligible to claim deductions for your home office phone, computer and other electronic equipment.

Self – education deductions

You can claim deductions from continuing education provided the courses you are taking are needed to maintain or improve your current employment. Other claims can also be made for expenses incurred during self – education, such as accommodation, meals, materials, course fees , fares and a whole lot more.

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Why Should You Teach Your Children Financial Literacy?

shutterstock_58986781_Young-happy-family-plays-in-the-backyard.Financial literacy is an important aspect of overall wellness that is often ignored and not passed on to the next generation. How many parents take the time to teach their children the basics of finance – such as savings and investments? To make things worse, children are given the wrong impression about money – that too much wealth is bad, and that money is innately evil.

If money is really that bad, here are 5 statistics that separate those that have rich and poor habits:

  • 79% of those that are well off are fully responsible for their current financial condition, compared to 18% for the poor.
  • 73% of the wealthy are taught the 80 / 20 rule. 5% of the poor live off of 80% or more of their income, leaving only 20% to none for savings.
  • 6% of the wealthy play the lottery, compared to 77% of the poor.
  • 80% of the wealthy focus on one goal at a time, compared to 12% of the poor.
  • 67% of the wealthy watch 1 hour or less TV, compared to 23% of the poor.

These are everyday habits and surprisingly, having rich – like habits can definitely contribute to one’s financial success. As parents, our role is to ensure that our children are equipped with the necessary experience to tackle life issues – be it decision making, finance or the like. Make it a habit to teach your kids to save for something they want. Delaying gratification can be rewarding for children, especially if saving up for toys now can result to bigger and better toys in the future. Ensure that you get the following points across:

  • Teach your kids that financial success is good.
  • Reassure your children that mistakes are good, not bad. Make sure that they understand that success in life is built on learning from one’s mistakes.
  • Take the time to talk to your children face to face for at least an hour a day. This allows you to have an understanding on your child’s opinion and ability to resolve issues.

With the wealth gap increasing by the day, which side are you on? Educate your children about financial literacy today.

Banks Fund Retirement Plan

Let’s face it. Not many of us are born with a silver spoon in our mouths. If you have dreams, especially dream home dreams, or dream investment dreams, you are going to need to get the money from somewhere to fund that dream.

The people who fund such dreams are lending institutions such as banks, building societies and other financial sources.

Don’t misunderstand our sentiment for even a little bit. Even if you have the cash for your dream home most of us will choose to hang onto the cash and take out some form of mortgage.

This is especially true in an investment situation as the tax man offers great incentives to investors, which are not available unless there is a debt over the property. What this means is that this way you can have your cake and eat it too! How could it get any better than that?

It is the perfect match to help you achieve your retirement goals. In many cases you have the opportunity to increase your retirement fund many, many times over. All with the astute investment in property.

Find Your Mentor

When you decide to use property investment as your vehicle to great wealth, or even if you are seeking a vehicle to hold your wealth, Fountain Property Group have all the answers wrapped up with a nice little bow on top.

We do all the leg work, fossicking around amongst the properties listed for sale, to find that diamond in the rough.

It may be shining for the world to see but only an astute investment professional, such as we, can uncover a property’s true value.

By leg work, we mean due diligence. There are many factors to consider when assessing a property for its exact potential.

Location to infrastructure, demographics, rental yield, quality, and supply of tenants who could be attracted, and maintenance expectations are just a few of the aspects we consider when breaking down the elements of a particular property.

Once we have run through our calculations again and again and are completely satisfied, only then, will we release our findings to our clients.

Remember the Bow on Top

To assist investors, small and large alike, we offer the services of our brokerage associate Grand Capital Finance Group to ensure we find the best possible financing solution for you and your circumstances.

No stone is left unturned, even in this area, to ensure our clients’ complete and total satisfaction.