Your Property Investment’s Cash Flow – Take a Reality Check. Most investors tend to underestimate and often ignore the risk that the actual cash flow from an investment property will be significantly lower than projections. Consequently, investors often end up ‘bleeding cash’ to cover the shortfall between the rental income, interest rates and other associated…
When it comes to risk, off-the-plan units top the list for potential investment disasters, especially if changes to negative gearing and capital gains tax go ahead. It’s a risk that’s compounded by a number of factors and includes equity risk, cashflow risk and settlement risk. The first, and most obvious, is the risk of oversupply which…
Restricting migration to regional areas is not a proper solution to rising congestion in our major cities. Federal Minister for Cities, Urban Infrastructure and Population Alan Tudge has proposed geographic or specialised regional visas as the answer to decreasing rising congestion in Australia’s capital cities, specifically Sydney and Melbourne. Under the government’s soon-to-bereleased population policy,…
Banks need to be thoroughly prepared for AASB 9, with proposed changes to negative gearing set to have a material impact on loss provisioning and profitability, according to RiskWise Property Research. Under the new financial instruments, accounting standard banks will need to make provisions under an ‘expected credit loss’ (ECL) model, rather than the incurred…
In strong markets even forced sales are ‘very likely’ to deliver capital gains to vendors who can’t service their mortgage. That’s the message from RIskWise Property Research following analysis of the housing market in Australia. In strong housing markets, such as Victoria and NSW, the vast majority of postcodes that had high default rates in 2015…
Reducing the population of major cities will provide the solution to housing affordability. Australia’s population has just hit the 25 million mark and with the bulk of that concentrated in the major cities, in particularly Sydney and Melbourne, it’s little wonder housing affordability is an issue when there is so much demand. While it’s true…
Despite the rate of home ownership plummeting due to unaffordability, the current state of the market is providing temporary relief to first home buyers. According to the Household Income and Labour Dynamics in Australia (HILDA) survey, there has been a rise in the number of renters, particularly in the younger age groups. The HILDA survey…
Infrastructure is the key to housing affordability in our major cities. Infrastructure has a great connection to demand and increased dwelling prices and this is particularly the case in Sydney and Melbourne. However, the allocation of significant funding to infrastructure upgrades in many urban and regional areas in the 2018 Federal Budget will also have…
Despite the doomsayers forecasting the end is nigh for the property market, high levels of equity and a strong labour market will eliminate the potential of any collapse. While recent media reports have highlighted predictions of an imminent collapse in the housing market, particularly in Sydney and Melbourne, a tsunami of forced sales was extremely…
Mixed messages from lenders are creating opportunities for cash-up investors looking to the long term. While some lenders are increasing interest rates, others are discounting them and offering cashback incentives. Adding to the confusion is NAB’s decision to place their rates on hold which is completely at odds with the other three major banks which…
