When calculating the breakeven point of an investment it pays to consider the full impact of negative gearing over the life of your investment. Those with negatively geared property need to factor in the opportunity cost associated with losing money over a period of time when calculating the breakeven point of their investment. According to Smartline Personal Mortgage Advisers, understanding the real impact of negative gearing costs reinforces the argument that it’s generally best used...
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ALMOST out of nowhere, it seems, international regulators are not just talking about macroprudential controls over bank lending but introducing them. There is now mounting pressure on the Australian Prudential Regulation Authority to follow suit. Despite the host of new regulatory requirements imposing higher capital requirements, leverage ratios, tougher liquidity rules and the like since the global financial crisis, there is a significant push on for another layer of regulation. In New Zealand, Norway, Sweden,...
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ELEANOR HALL: The Reserve Bank board today joined global financial authorities in issuing a warning about low interest rates having the potential to fuel a property price bubble. In the minutes from its September meeting, the central bank mirrored today’s IMF warning and last week’s caution from the local regulator APRA that banks need to be vigilant about their lending standards. The RBA has also warned about potentially risky property investments in self-managed superannuation funds....
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Financial advisers are still struggling to change public perceptions about their professionalism. Only 23 per cent of respondents in a survey carried out on behalf of the Australian Securities and Investments Commission rated financial advisers as “operating with integrity”. Thirty per cent disagreed that planners operate with integrity, with the remainder undecided. ‘ “Integrity” includes concepts such as a “having high standards, managing vested interests, not hiding anything and being honest”. The results are included...
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The opening stanza in the Australian Prudential Regulation Authority’s “macro-prudential” campaign to cauterise any credit-fuelled housing bubble has arrived, as predicted by The Australian Financial Review. APRA is anxious deposit-takers will relax lending standards to foster faster credit growth in a bid to maintain our banking system’s internationally high profitability. And it is concerned these decisions may be encouraged by the cheapest borrowing rates in history and a nascent housing boom. House prices in Sydney are...
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OPINION by Tim O’Dwyer M.A., LL.B Solicitor Consumer Advocate watchdog@argonautlegal.com.au On 27th May Peter and Helen Kettle contracted to sell both units of their Surfers Paradise duplex (for $1.2 million and $800,000 respectively) to Milani Properties Pty. Ltd. Deposits totalling $170,000 were paid to Milani’s solicitor’s trust account. Settlement of each contract was due on 13th July, subject to finance approval by the “Finance Date” of 17th June. The finance clause in both contracts...
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It was written there for all to see in the company’s prospectus. But for the 3500-odd investors in failed Gippsland Secured Investments, the company’s financial woes came as a surprise. For the mostly farmers, pensioners and small business owners who held money with the non-bank lender, GSI was a trusted institution with a vested interest in keeping the community secure. But for those with the financial nous to understand the fine print, it had been...
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by Shannyn HunterConveyancer shannyn@lawyersconveyancing.com.au Lawyers Conveyancing Anyone who has dealt with the banks for a home loan will tell you about their battle scars with pride. Simply securing finance approval can be a frustrating and baffling task. An anxious purchaser can be kept waiting for finance approval because the valuation has been delayed, the vendor has gone overseas, the valuation has been done but your documents are being processed, your broker is on leave, your call...
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by Tim O’Dwyer M.A., LL.BSolicitorConsumer Advocate watchdog@argonautlegal.com.au This latest “Clayton’s” finance approval letter is hot off my fax machine. Last year I reported on an upbeat broker’s keenness to show me that my clients’ finance had been “approved” – by way of a copy of a letter from the lending bank confirming that the loan application had been “Unconditionally Approved.” (see: Clayton’s Finance Approval (The Approval You Have When You Don’t Have Approval)). Responsible...
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by Shannyn HunterConveyancer shannyn@lawyersconveyancing.com.au Lawyers Conveyancing On Monday morning purchasers can experience a real estate hangover. After a weekend of elation at finding their dream house and pressure from the agent to make an offer, with hesitation they sign on the dotted line and their concerns about legal advice are pushed aside. They are locked into a contract. Unfortunately, the emotive attachment that causes you to buy a property can also cause you to forego certain...
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