There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.
Each Saturday morning I like to share some of the ones I’ve read during the week.
Enjoy your weekend…and please forward to your friends by clicking a social link buttons on the left.
How Obama pushed Chinese property investors toward Australia
Why have Chinese people rushed to buy and develop residential property in key selected areas of Sydney and Melbourne, as well as other places?
Robert Gottliebsen writes in Business Spectator that:
This week I discovered why so many Chinese are nervous about buying in the US and why Australia has attracted those big slabs of money that were originally earmarked for America.
Much of the dwelling investment money that comes out of China is controlled by people who are looking to obtain a residential qualification so that they have a place to go should the environment in China turn nasty.
In many cases the Chinese who are sending money out here to buy dwellings have aspirations to have residential qualifications.
They turned away from the US because President Obama passed legislation that requires people gaining a US green card to disclose all their sources of global income.
For many Chinese, especially those with corrupt income to hide, this made the US a dangerous place to seek residency.
Australia is much more flexible and so we received and still are receiving, more than our normal share of Chinese property investment income albeit concentrated in selected areas of Sydney and Melbourne.
Yesterday I was talking to a Sydney executive who has just seen a neighbouring house bought by Chinese for $2.5 million. No one now lives in it.
It might seem strange, but for many Chinese with money gained through corruption, investing in property makes sense. And Australia is a very attractive market for them.
The #1 driver of capital growth | The 40/60 rule of property investment | Are there really “hotspots” | Silent sales
Another great Real Estate Talk show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.
Details of this week’s show:
Michael Matusik expands on his 40/60 rule when it comes to property investment
Jenni Brown tells us about some bad advice she once received
Rachel Barnes says … waiting is a BIG mistake
You should definitely subscribe to this weekly audio program. Click here, it’s free and you can listen on the go on your smartphone, iPad etc.
Borrowing costs to remain at historic lows – Pete Wargent
In his blog regular Property Update Blogger Pete Wargent analyses the Reserve Bank’s latest minutes which unsurprisingly revealed that interest rates are expected to be left on hold for some time to come yet:
“The Board judged that monetary policy was appropriately configured and that, on present indications, the most prudent course was likely to be a period of stability in interest rates.”
The interesting point of note is that lenders are doing some of the heavy lifting on the Reserve Bank’s behalf, with Commonwealth Bank, NAB and Westpac making history by continuing to cut 5 year fixed rates to unprecedented lows of below 5 percent last Wednesday.
Continued the RBA Minutes:
“Average lending rates on housing and business loans in Australia continued to edge down over July, mainly owing to the ongoing replacement of more expensive fixed-rate and discount variable-rate loans from previous years.
Overall, cumulative movements in interest rates since the start of the year amounted to a noticeable easing in financial conditions. Financial markets continued to expect the Bank to leave the cash rate target unchanged at the August meeting and over the year ahead.”
On hold for ever.
Commonwealth Bank has now also slashed its 3 year fixed rate to just 4.94 percent.
Banks had previously made noises about challenging funding costs which didn’t sit too comfortably with record earnings and suspiciously healthy returns on equity.
Wholesale funding globally remains cheap in historic terms and Australia’s banks are now taking the opportunity to win market share by slashing fixed rate mortgages and offering discounted variable rate products.
This is certainly taking the pressure off the RBA for now.
Even so, when the national accounts are released for The June quarter and a soft result is revealed, it would be no surprise to hear renewed calls for further assistance from another rate cut.
Futures markets are taking the outcome as an each way bet, pricing in just under a 1 in 2 chance of another cut to the official cash rate in this cycle.
The impact of the easier lending rates is that the cash rate futures implied yield curve, while still inverted, has taken on a long, shallow appearance over the past month.
In short, this signifies a likelihood of low interest rates for longer.
In other words, the RBA may not need to cut the official cash rate further because the banks are doing plenty of the hard work for them by delivering cuts of their own .
Average US 30-year mortgage rate at 4.10%
The Australian reports that:
AVERAGE long-term US mortgage rates declined this week, with the 30-year loan rate hitting its 52-week low…the nationwide average for a 30-year mortgage fell to 4.10 per cent from 4.12 per cent last week.
The average for a 15-year mortgage, a popular choice for people who are refinancing, slipped to 3.23 per cent from 3.24 per cent.
Mortgage rates have fallen in recent weeks after climbing last summer when the Federal Reserve began talking about reducing the monthly bond purchases it was making to keep long-term borrowing rates low.
The low rates appear to have boosted US home sales.
The world is aging:
The world is getting older very quickly:
By 2020, 13 countries will be “super-aged” — with more than 20% of the population over 65 — according to a report by Moody’s Investor Service.
That number will rise to 34 nations by 2030.
Only three qualify now: Germany, Italy and Japan.
Weekend video: A Forest Year
This is a beautiful time lapse video of a year in a forest from the same spot in someone’s front window, using 40,000 still images
Blogs you may have missed this week:
If you didn’t have a chance to read my daily blog, here’s a list of some of the blogs you missed this week:
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