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.
The weekend will be over before you know it, so enjoy some weekend reading.
‘Another hindrance’ for already-weak market: Westpac stops SMSF home lending
As lending news continues to worsen, another bank drops a bombshell.
According to an article on Domain.com.au Westpac brings it’s SMSF home lending to a holt.
Westpac has sent another shiver through an already-anxious Australian property market by announcing it will no longer lend to self-managed super funds wanting to invest in residential property.
In a move designed to “streamline” its product offering, Australia’s second-biggest mortgage lender, confirmed on Friday it would stop selling its SMSF home loan products, along with its subsidiaries St George, Bank SA and Bank of Melbourne.
A spokesman said that, as far as the bank was aware, Westpac is the only major bank currently offering this type of lending and will stop writing new loans of this kind at the end of July.
The bank will continue servicing its existing loans.
The move follows a widespread tightening of bank lending practices, which has included several waves of macro prudential regulation changes and an ongoing royal commission into the financial services industry.
The clampdown has seen lending to residential property investors slump to its lowest level in seven years, according to recent ABS data.
A Westpac spokesman said SMSF lending represented a “very small portion of our portfolio”.
“We continually review our products and services to ensure they meet the requirements of our customers,” he said.
“In order to simplify and streamline our self-managed super fund products, we will be withdrawing from the sale of our SMSF home loan product and business lending to SMSFs, effective Tuesday, July 31, 2018.”
Fresh blow to market
The news comes as another blow to floundering confidence in Australia’s key property markets, according to Market Economics managing director Stephen Koukoulas.
“At a time when we know demand [in residential property] is tapering off for a number of reasons, it’s just another proverbial straw that goes onto the back of an already-weak housing market,” Mr Koukoulas said of the latest news from Westpac.
Read the full article here
Sydney vacancy rate jumps
The numbers keep rising for Sydney’s vacancy rates.
Sydney vacancies rising
The latest building activity figures confirmed that the record number of apartments under construction in Sydney is now morphing into a surge in completions.
June is always a seasonally soft month for rental markets, but the latest release from SQM Research recorded a vacancy rate jumping all the way to 2.8 per cent for Sydney.
That’s well up from 2 per cent a year earlier.
Vacancies were very high in the Hills District at 4.9 per cent.
But the inner suburbs have by no means been immune as apartments complete across the city.
There’s a certain seasonal aspect to this.
Read the full article here
The RBA’s rationale for why it’s not rushing to lift rates
It’s no secret that interest rates have been on hold for a while now – with no sign of a rise.
This article from Business Insider gives an insider look into why the RBA isn’t in a rush to lift rates.
The Reserve Bank of Australia (RBA) thinks the next move in official interest rates is likely to be higher should progress in lowering unemployment and boosting inflationary pressures continue in the period ahead.
However, despite calls from some academics, including a former Board member, that interest rates should increase now, it still sees “no strong case for a near-term adjustment in monetary policy”.
While these views are hardly new, heard on-and-off over the course of this year, the RBA provided plenty of reasons in the minutes of its July monetary policy meeting as to why it has little desire to deliver a preemptive increase in the cash rate, pointing to rising risks from abroad, as well as ongoing constraints for Australia’s highly-indebted household sector, as a reason to sit tight for the foreseeable future.
“Some of the downside risks to the global growth outlook had increased over the prior month,” the RBA said.
“Members noted that trade tensions extended beyond the United States and China, and could escalate through non-tariff measures such as administrative delays.
“An escalation of trade tensions could harm global growth by undermining confidence and delaying investment decisions and could dampen international trade.”
So the tit-for-tat trade war between the United States and China, seeing both sides increasing import tariffs on the other with the promise for more, is on the RBA’s radar — an understandable reaction given China is Australia’s largest trading partner and therefore highly influential on Australia’s economic fortunes.
Domestically, the board also discussed at length the high level of household debt in Australia at its July meeting, a timely conversation given Australia’s household debt to income ratio had recently increased to a record 190%.
It offered not only the factors behind the increase in household indebtedness, but also why it poses a risk, reinforcing the point that now is not the time to test the waters with an unexpected lift in official borrowing costs, especially at a time when domestic wholesale funding costs are elevated and uncertainty over whether these trends will persist.
“Household debt has increased by more than household income over the preceding three decades in many countries, but particularly so in Australia,” the RBA said.
“Two key drivers of this trend across countries have been the decline in nominal interest rates, predominantly reflecting lower inflation, and financial deregulation, both of which have increased households’ access to finance.”
It added that the higher cost of housing also reflected that a larger share of the Australia’s population live in urban centres, along with a preference for large, unattached dwellings among prospective buyers.
While the board noted that, based on survey data, that much of Australian household debt is owed by higher-income and middle-aged people “who tend to have more stable employment and often larger savings buffers”, it acknowledged that “a material share of household debt is held by lower-income households, which generally have higher debt relative to their income”.
That is, while most of Australia’s household debt is held by those the RBA deems can afford to service it, there’s still a significant proportion of the population who are vulnerable to higher borrowing costs.
Read the full article here
Why selling in winter works
It may be cold outside – but that doesn’t mean the market is experiencing a freeze.
In this article for Switzer, John McGrath explains why winter is actually a hot time to sell.
So, it’s the Winter season.
Fewer people attend opens.
There are fewer homes for sale.
The gloomy weather allows less light into your property.
The rain makes your lawn soggy.
The house feels cold.
Doesn’t sound like the best time to sell but let me surprise you – Winter can actually be the perfect season to sell.
Let me explain why.
There are three key reasons.
First of all, genuine buyers don’t stop looking for a new home just because it’s raining on Saturday morning.
Fewer people will attend your open in Winter but you can bank on those buyers being genuine – not locals popping in for a look or future buyers researching the area.
Secondly, there are less homes for sale.
People are seeing fewer listings advertised and fewer signboards.
It makes the market look slow and boring, right?
It’s actually great news for sellers.
Low supply of similar homes for sale will always work in your favour.
It means buyers don’t have as many options and therefore, more of them will notice your home.
They’ll have more opportunity to inspect it because there will be less homes sharing the same open time slot.
Buyers will be less rushed with fewer opens to attend, so they’ll have more time to wander around your place and imagine living there.
This is all good for you.
Lastly, Winter is an advantageous time to sell because it enables you to buy in the traditionally busy Spring period, when more homes are listed for sale.
Sell in Winter and you won’t be competing against all those new Spring listings, you’ll be competing for them.
With your sale done and dusted, you’ll have an exact budget to work with, too.
Some properties are particularly suited to a Winter sale.
For example, beautifully renovated period homes with open fireplaces can be cosy and inviting in Winter. Conversely, beachside properties with pools will always present best in Spring or Summer.
For Winter sellers, Adrian Bo, McGrath’s Performance Growth Coach, provides the following tips on how to maximise your home’s appeal in the cooler months.
Maximising your home’s Winter appeal
- Make sure windows are clean and window-dressings are well presented to make the most of natural light
- Schedule your inspections for times of day when rooms capture the most winter sun possible
- Use candles, lamps and soft furnishings like cushions and throw rugs to make darker areas cosy and appealing
- Factor in time to properly heat your home before potential buyers arrive for inspections and the auction itself
- Make sure your home is ready for any winter downpours – clear gutters and pathways so water can clear easily
- On wet days, don’t be afraid to ask those who come to the inspection to take off their shoes at the door to protect floors from muddy footprints
Read the full article here
A sense of humour the best way to improve productivity in the workplace
They say laughter is the best medicine, but it would seem that it’s also a great business strategy.
According to an article on Executivestyle.com.au having a sense of humour at work, can actually improve productivity.
Are you an office clown or do you eschew levity in the lunchroom for fear your idea of a joke may see you carpeted by HR for offending a colleague who doesn’t share your sense of humour?
If you answered yes to the latter, then perhaps it’s time to let your hair down a little – and not just because a laugh a day keeps the doctor away.
Laugh – and live – a little
Researchers from the University of Queensland Business School and Monash University say Aussie workers are up for more laughs in the workplace and that managers who encourage them will score a more motivated and productive workforce as a result.
Positive climate change
Charmine Hartel, Professor of HR management and organisational development at UQ Business School, believes bosses who want to reap the benefits should try to create a ‘humour friendly’ culture, rather than waiting for the chuckles to break out spontaneously.
“When [humour] is used constructively it’s building this positive emotional climate in the workplace,” Hartel says.
“It actually builds these high quality relationships, people feel more comfortable with each other, they feel like they belong, they feel that sense of inclusion.
Is it organic?
Best if the fun occurs naturally and not because it’s mandated by management, says Zendesk sales director Rod Moynihan, who believes his predominately millennial team is an exemplar for enjoying yourself while you work.
It’s the same at our place, says Fluent Retail CEO Graham Jackson. No need for a ‘more fun’ policy – his team of 50 already has friendly joshing down to a fine art and it helps keep them happy to come to work.
“I think it gets very stale otherwise and people end up working from home without that kind of thing,” Jackson says.
Don’t overdo it
Encourage appropriate humour but don’t try to be Chief Fun Officer if you’re not a life of the party type, people management specialist Karen Gately advises.
“[Australians] have the most highly developed BS detectors in the world so if somebody is not being authentic, often we’ll call it try-hard; it has the opposite impact,” she says.
“So if you’re not naturally a funny person, don’t try to be a funny person, it’s more about…if you do have funny people in the office, give them some room to have a joke.
Keep it respectful
And while the the rise of political correctness may have left some folk uncertain about what they can and can’t joke about, avoiding offence is simple enough, Gately adds.
“I can understand the nervousness but the way to stay out of trouble is to be respectful and kind,” she says.
Read the full article here
Weekend video: 12 ILLUSIONS THAT WILL TEST YOUR BRAIN
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