(Foreign) DEAKIN WEST (March 13) - The Real Estate Institute of Australia (REIA) has released the REIA/Deposit Power Housing Affordability Report; a comprehensive assessment of the ability of Australians to meet the cost of home purchase.
The report, released on March 6, notes a record change is evident for the December quarter in the proportion of family income required to meet mortgage repayments. This percentage of family income needed decreased nationally from 38,8% in the September quarter 2008 to 32,4% in the December quarter 2008.
“This is the largest quarterly change recorded by the REIA since calculations of this affordability measure were first made in 1995”, said REIA President, Noel Dyett.
Housing affordability nationally improved significantly during the December quarter 2008 as the result of a combination of interest rate reductions, Government incentives and a changing market.
“Our data shows that average Australian households were paying in excess of $300 a month less for their home loan at the end of December than they were three months earlier at the end of September. This is tremendous news for homeowners who struggled throughout most of 2008 with rising interest rates and increasing loan repayments”, continued Dyett.
The December quarter 2008 is also significant because it starts to reflect the impact the Boost to the First Home Owners Grant has had on first home buyer activity.
ABS data included in the Housing Affordability Report, indicates that the Boost to the First Home Owners Grant, coupled with lower interest rates, is having a positive effect on the housing market.
The number of first home buyers increased by over 25% from the September quarter to the December quarter 2008, but the percentage of first home buyers is still 3% less than for the December quarter 2007.
“Market statistics highlight that first homebuyers make up an increased proportion of the total homebuyer market – a sign that the Boost to the First Home Owners Grant is making new home purchases more realistic for those who may not have been in a position to buy 12 months ago”, said National Manager for Deposit Power, Keith Levy.
“Housing is an important sector of the Australian economy and consequently will play a key role in helping the nation try to avoid severe recession. That is why housing has featured so prominently in the two economic stimulus packages delivered by the Government to date”, concluded Dyett.
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Thursday, March 19, 2009
Tuesday, March 10, 2009
International Investing - Why you can’t afford not to act - NOW?
Life is all about decisions and most importantly also the timing of these decisions. Scott Picken, CEO of International Property Solutions (IPS) believes it is very important to understand the opportunities which are available offshore in countries like Australia and also why it is so important to act quickly.
1. The first element is the Exchange rate
a. Currently, with the exchange rate, to buy your dream 4 bedroom investment house in Australia you need a minimum of R700 000 (deposit & all costs).
b. If the Rand was to lose 10% against the Aus Dollar, this amount would increase R70 000 or more. Now honestly, even in the next 2 months, what are the prospects for the Rand, taking these 4 elements into account:
i. In a recent article from the Economist, South Africa was portrayed as the most exposed economy globally, based on a statistical analysis and therefore one of the most vulnerable currencies in the global environment.
ii. Interest rates are coming down in South Africa to stimulate the economy and growth, which means South Africa looses’ appeal for international investors who are looking for higher returns and there is a concern of a foreign investment flight from South Africa.
iii. On the 22nd of April we will have a new president who is seen as populist and left wing, with heavy influence to the SA Communist Party and COSATU. Although hopefully this will not change government policy substantially, in the eyes of the world it is going to take a long time to prove this and in the mean time our currency will suffer. Imagine this with Trevor Manuel resigning....
iv. The ANC and COPE want to reduce the Rand to US Dollar to R12 to the $1, a decrease of 25% to improve exports and sustain jobs.
c. Based on all of the above a 10% decrease in the next 2 months is very conservative and it will probably be closer to 25%, which will mean the same property will be 25% more expensive or R177 000 more on the cash you have to input, as well as affecting your affordability for the mortgage.
2. Secondly, why it is so important to own offshore assets? Would / Should you want one?
a. The world is becoming a global village and it is very important to diversify your asset base and ensure you are taking advantage of other markets. Investors from all over the world are taking advantages of this in all asset classes.
b. However more importantly for South Africans who live in an economically and politically challenging environment (I love it as it presents opportunity) must be astute and invest part of their wealth in more economically and politically stable environments. This not only provides a Rand hedge which is vital, but also acts as an insurance policy should the unthinkable happen – you have to move.
c. I believe it is fantastic to live in South Africa, but it is a fundamental necessity to accumulate foreign assets. It is not only wise, but is prudent and essential.
3. Thirdly, understanding you want to invest, what is stopping you from acting now?
a. “I want to go to Australia to choose the right investment?”
i. IPS, through their strategic partners has done all this research for you. Scott Picken, CEO of IPS, has spent a substantial amount of time exploring all the states, cities and projects and also reading all the research to determine the best investment properties.
ii. Do you have the time, contacts or the knowledge in a quick trip to Australia to be able to make this type of analysis?
b. “I am worried about the management and maintenance of my investment property. It is so far away, what can I do if there are problems?”
i. Once again, IPS who have offices in South Africa and work with strategic partners in Australia and the UK, provide an end to end solution. Through Oz Invest, they provide a 10 year Leaseback Guarantee, where Oz Invest will manage and maintain your unit as well as guarantee your rental will be paid on the 10th of the month, each and every month for 10 years? All you will need to do is expect your rental money each month!
c. “What happens if the tenants don’t pay my rent, how can I afford my mortgage?”
i. Through the Leaseback Scheme, Oz Invest charge $15 a week to all their clients. They have over 1000 properties under management which equates to $15 000 a week and ensure they can not only always pay the rent, whether or not your unit has a tenant, but they also make a profit. Your rental is market related, guaranteed for 10 years and covers all your expenses being cash flow positive from Day One!
d. “What happens if interest rates go up?”
i. Investing is all about managing the variables. In property there are 3 variables, the rent, the interest rate and also the capital growth. For this investment the income is guaranteed, you can fix the interest rates for either 5 or 10 years and therefore eliminate the variables. It just leaves the capital growth and for this see below.
4. Fourthly understanding the market
a. Capital Growth - you need to ensure you are investing in areas with the right fundamentals – population growth, infrastructure growth, employment and transport nodes, etc. This is what IPS puts so much time into investigating and delivering to our clients.
b. It is important to invest in the right sector of the market and the best capital growth and rental yields are being found in the sub $500 000 range where IPS is focusing.
c. IPS, with its partners and thorough market knowledge has sourced the best opportunities in Australia.
What to do next?
So with an understanding of what is important, what do you do next? Basically there are a number of options.
1. Come to our next Australian Investment event. Go to http://www.ipsinvest.com/ to find the details.
2. Book an appointment – contact us on 011 463 0588.
As with everything in life, you often regret the things you do not do the most.
1. The first element is the Exchange rate
a. Currently, with the exchange rate, to buy your dream 4 bedroom investment house in Australia you need a minimum of R700 000 (deposit & all costs).
b. If the Rand was to lose 10% against the Aus Dollar, this amount would increase R70 000 or more. Now honestly, even in the next 2 months, what are the prospects for the Rand, taking these 4 elements into account:
i. In a recent article from the Economist, South Africa was portrayed as the most exposed economy globally, based on a statistical analysis and therefore one of the most vulnerable currencies in the global environment.
ii. Interest rates are coming down in South Africa to stimulate the economy and growth, which means South Africa looses’ appeal for international investors who are looking for higher returns and there is a concern of a foreign investment flight from South Africa.
iii. On the 22nd of April we will have a new president who is seen as populist and left wing, with heavy influence to the SA Communist Party and COSATU. Although hopefully this will not change government policy substantially, in the eyes of the world it is going to take a long time to prove this and in the mean time our currency will suffer. Imagine this with Trevor Manuel resigning....
iv. The ANC and COPE want to reduce the Rand to US Dollar to R12 to the $1, a decrease of 25% to improve exports and sustain jobs.
c. Based on all of the above a 10% decrease in the next 2 months is very conservative and it will probably be closer to 25%, which will mean the same property will be 25% more expensive or R177 000 more on the cash you have to input, as well as affecting your affordability for the mortgage.
2. Secondly, why it is so important to own offshore assets? Would / Should you want one?
a. The world is becoming a global village and it is very important to diversify your asset base and ensure you are taking advantage of other markets. Investors from all over the world are taking advantages of this in all asset classes.
b. However more importantly for South Africans who live in an economically and politically challenging environment (I love it as it presents opportunity) must be astute and invest part of their wealth in more economically and politically stable environments. This not only provides a Rand hedge which is vital, but also acts as an insurance policy should the unthinkable happen – you have to move.
c. I believe it is fantastic to live in South Africa, but it is a fundamental necessity to accumulate foreign assets. It is not only wise, but is prudent and essential.
3. Thirdly, understanding you want to invest, what is stopping you from acting now?
a. “I want to go to Australia to choose the right investment?”
i. IPS, through their strategic partners has done all this research for you. Scott Picken, CEO of IPS, has spent a substantial amount of time exploring all the states, cities and projects and also reading all the research to determine the best investment properties.
ii. Do you have the time, contacts or the knowledge in a quick trip to Australia to be able to make this type of analysis?
b. “I am worried about the management and maintenance of my investment property. It is so far away, what can I do if there are problems?”
i. Once again, IPS who have offices in South Africa and work with strategic partners in Australia and the UK, provide an end to end solution. Through Oz Invest, they provide a 10 year Leaseback Guarantee, where Oz Invest will manage and maintain your unit as well as guarantee your rental will be paid on the 10th of the month, each and every month for 10 years? All you will need to do is expect your rental money each month!
c. “What happens if the tenants don’t pay my rent, how can I afford my mortgage?”
i. Through the Leaseback Scheme, Oz Invest charge $15 a week to all their clients. They have over 1000 properties under management which equates to $15 000 a week and ensure they can not only always pay the rent, whether or not your unit has a tenant, but they also make a profit. Your rental is market related, guaranteed for 10 years and covers all your expenses being cash flow positive from Day One!
d. “What happens if interest rates go up?”
i. Investing is all about managing the variables. In property there are 3 variables, the rent, the interest rate and also the capital growth. For this investment the income is guaranteed, you can fix the interest rates for either 5 or 10 years and therefore eliminate the variables. It just leaves the capital growth and for this see below.
4. Fourthly understanding the market
a. Capital Growth - you need to ensure you are investing in areas with the right fundamentals – population growth, infrastructure growth, employment and transport nodes, etc. This is what IPS puts so much time into investigating and delivering to our clients.
b. It is important to invest in the right sector of the market and the best capital growth and rental yields are being found in the sub $500 000 range where IPS is focusing.
c. IPS, with its partners and thorough market knowledge has sourced the best opportunities in Australia.
What to do next?
So with an understanding of what is important, what do you do next? Basically there are a number of options.
1. Come to our next Australian Investment event. Go to http://www.ipsinvest.com/ to find the details.
2. Book an appointment – contact us on 011 463 0588.
As with everything in life, you often regret the things you do not do the most.
Monday, March 9, 2009
I dare you to visit Johannesburg, the city for softies
From the London Sunday Times... Jeremy Clarkson (the Top
Gear guy!)
I dare you to visit Johannesburg, the city for softies
It’s the least frightening place on earth, yet everyone speaks of how
many times they’ve been killed that day
Jeremy Clarkson – London Sunday Times
Every city needs a snappy one-word handle to pull in the tourists and
the investors. So, when you think of Paris, you think of love; when
you think of New York, you think of shopping; and when you think of
London – despite the best efforts of new Labour to steer you in the
direction of Darcus Howe – you think of beefeaters and Mrs Queen.
Rome has its architecture. Sydney has its bridge. Venice has its
sewage and Johannesburg has its crime. Yup, Jo’burg – the subject of
this morning’s missive – is where you go if you want to be carjacked,
shot, stabbed, killed and eaten.
You could tell your mother you were going on a package holiday to
Kabul, with a stopover in Haiti and Detroit, and she wouldn’t bat an
eyelid. But tell her you’re going to Jo’burg and she’ll be absolutely
convinced that you’ll come home with no wallet, no watch and no head.
Jo’burg has a fearsome global reputation for being utterly terrifying,
a lawless Wild West frontier town paralysed by corruption and disease.
But I’ve spent quite a bit of time there over the past three years and
I can reveal that it’s all nonsense.
If crime is so bad then how come, the other day, the front-page lead
in the city’s main newspaper concerned the theft of a computer from
one of the local schools? I’m not joking.
The paper even ran a massive picture of the desk where the computer
used to sit. It was the least interesting picture I’ve ever seen in a
newspaper. But then it would be, because this was one of the least
interesting crimes.
“Pah,” said the armed guard who’d been charged with escorting me each
day from my hotel to the Coca-Cola dome where I was performing a stage
version of Top Gear.
Quite why he was armed I have absolutely no idea, because all we
passed was garden centres and shops selling tropical fish tanks. Now
I’m sorry, but if it’s true that the streets are a war zone, and you
run the risk of being shot every time you set foot outside your front
door, then, yes, I can see you might risk a trip to the shops for some
food. But a fish tank? An ornamental pot for your garden? It doesn’t
ring true.
Look Jo’burg up on Wikipedia and it tells you it’s now one of the most
violent cities in the world . . . but it adds in brackets “citation
needed”. That’s like saying Gordon Brown is a two-eyed British genius
(citation needed).
Honestly? Johannesburg is Milton Keynes with thunderstorms. You go
out. You have a lovely ostrich. You drink some delicious wine and you
walk back to your hotel, all warm and comfy. It’s the least
frightening place on earth. So why does every single person there wrap
themselves up in razor wire and fit their cars with flame-throwers and
speak of how many times they’ve been killed that day? What are they
trying to prove?
Next year South Africa will play host to the football World Cup. The
opening and closing matches will be played in Jo’burg, and no one’s
going to go if they think they will be stabbed.
The locals even seem to accept this, as at the new airport terminal
only six passport booths have been set aside for non-South African
residents.
At first it’s baffling. Why ruin the reputation of your city and risk
the success of the footballing World Cup to fuel a story that plainly
isn’t true? There is no litter and no graffiti. I’ve sauntered through
Soweto on a number of occasions now, swinging a Nikon round my head,
with no effect. You stand more chance of being mugged in Monte Carlo.
Time and again I was told I could buy an AK47 for 100 rand – about £7.
But when I said, “Okay, let’s go and get one”, no one had the first
idea where to start looking. And they were even more clueless when I
asked about bullets.
As I bought yet another agreeable carved doll from yet another
agreeable black person, I wanted to ring up those idiots who compile
surveys of the best and worst places to live and say: “Why do you keep
banging on about Vancouver, you idiots? Jo’burg’s way better.”
Instead, however, I sat down and tried to work out why the locals
paint their city as the eighth circle of hell. And I think I have an
answer. It’s because they want to save the lions in the Kruger
National Park.
I promise I am not making this up. Every night, people in Mozambique
pack up their possessions and set off on foot through the Kruger for a
new life in the quiet, bougainvillea-lined streets of Jo’burg. And
very often these poor unfortunate souls are eaten by the big cats.
That, you may imagine, is bad news for the families of those who’ve
been devoured. But actually it’s even worse for Johnny Lion. You see,
a great many people in Mozambique have Aids, and the fact is this: if
you can catch HIV from someone’s blood or saliva during a bout of
tender love-making, you can be assured you will catch it if you wolf
the person down whole. Even if you are called Clarence and you have a
mane.
At present, it’s estimated that there are 2,000 lions in the Kruger
National Park and studies suggest 90% have feline Aids. Some vets
suggest the epidemic was started by lions eating the lungs of diseased
buffalos. But there are growing claims from experts in the field that,
actually, refugees are the biggest problem.
That’s clearly the answer, then. Johannesburgians are telling the
world they live in a shit-hole to save their lions. That’s the sort of
people they are. And so, if you are thinking about going to the World
Cup next year, don’t hesitate.
The exchange rate’s good, the food is superb, the weather’s lovely
and, thanks to some serious economic self-sacrifice, Kruger is still
full of animals. The word, then, I’d choose to describe Jo’burg is
“tranquil”.
http://www.timesonline.co.uk/tol/comment/columnists/jeremy_clarkson/article5
821586.ece
Gear guy!)
I dare you to visit Johannesburg, the city for softies
It’s the least frightening place on earth, yet everyone speaks of how
many times they’ve been killed that day
Jeremy Clarkson – London Sunday Times
Every city needs a snappy one-word handle to pull in the tourists and
the investors. So, when you think of Paris, you think of love; when
you think of New York, you think of shopping; and when you think of
London – despite the best efforts of new Labour to steer you in the
direction of Darcus Howe – you think of beefeaters and Mrs Queen.
Rome has its architecture. Sydney has its bridge. Venice has its
sewage and Johannesburg has its crime. Yup, Jo’burg – the subject of
this morning’s missive – is where you go if you want to be carjacked,
shot, stabbed, killed and eaten.
You could tell your mother you were going on a package holiday to
Kabul, with a stopover in Haiti and Detroit, and she wouldn’t bat an
eyelid. But tell her you’re going to Jo’burg and she’ll be absolutely
convinced that you’ll come home with no wallet, no watch and no head.
Jo’burg has a fearsome global reputation for being utterly terrifying,
a lawless Wild West frontier town paralysed by corruption and disease.
But I’ve spent quite a bit of time there over the past three years and
I can reveal that it’s all nonsense.
If crime is so bad then how come, the other day, the front-page lead
in the city’s main newspaper concerned the theft of a computer from
one of the local schools? I’m not joking.
The paper even ran a massive picture of the desk where the computer
used to sit. It was the least interesting picture I’ve ever seen in a
newspaper. But then it would be, because this was one of the least
interesting crimes.
“Pah,” said the armed guard who’d been charged with escorting me each
day from my hotel to the Coca-Cola dome where I was performing a stage
version of Top Gear.
Quite why he was armed I have absolutely no idea, because all we
passed was garden centres and shops selling tropical fish tanks. Now
I’m sorry, but if it’s true that the streets are a war zone, and you
run the risk of being shot every time you set foot outside your front
door, then, yes, I can see you might risk a trip to the shops for some
food. But a fish tank? An ornamental pot for your garden? It doesn’t
ring true.
Look Jo’burg up on Wikipedia and it tells you it’s now one of the most
violent cities in the world . . . but it adds in brackets “citation
needed”. That’s like saying Gordon Brown is a two-eyed British genius
(citation needed).
Honestly? Johannesburg is Milton Keynes with thunderstorms. You go
out. You have a lovely ostrich. You drink some delicious wine and you
walk back to your hotel, all warm and comfy. It’s the least
frightening place on earth. So why does every single person there wrap
themselves up in razor wire and fit their cars with flame-throwers and
speak of how many times they’ve been killed that day? What are they
trying to prove?
Next year South Africa will play host to the football World Cup. The
opening and closing matches will be played in Jo’burg, and no one’s
going to go if they think they will be stabbed.
The locals even seem to accept this, as at the new airport terminal
only six passport booths have been set aside for non-South African
residents.
At first it’s baffling. Why ruin the reputation of your city and risk
the success of the footballing World Cup to fuel a story that plainly
isn’t true? There is no litter and no graffiti. I’ve sauntered through
Soweto on a number of occasions now, swinging a Nikon round my head,
with no effect. You stand more chance of being mugged in Monte Carlo.
Time and again I was told I could buy an AK47 for 100 rand – about £7.
But when I said, “Okay, let’s go and get one”, no one had the first
idea where to start looking. And they were even more clueless when I
asked about bullets.
As I bought yet another agreeable carved doll from yet another
agreeable black person, I wanted to ring up those idiots who compile
surveys of the best and worst places to live and say: “Why do you keep
banging on about Vancouver, you idiots? Jo’burg’s way better.”
Instead, however, I sat down and tried to work out why the locals
paint their city as the eighth circle of hell. And I think I have an
answer. It’s because they want to save the lions in the Kruger
National Park.
I promise I am not making this up. Every night, people in Mozambique
pack up their possessions and set off on foot through the Kruger for a
new life in the quiet, bougainvillea-lined streets of Jo’burg. And
very often these poor unfortunate souls are eaten by the big cats.
That, you may imagine, is bad news for the families of those who’ve
been devoured. But actually it’s even worse for Johnny Lion. You see,
a great many people in Mozambique have Aids, and the fact is this: if
you can catch HIV from someone’s blood or saliva during a bout of
tender love-making, you can be assured you will catch it if you wolf
the person down whole. Even if you are called Clarence and you have a
mane.
At present, it’s estimated that there are 2,000 lions in the Kruger
National Park and studies suggest 90% have feline Aids. Some vets
suggest the epidemic was started by lions eating the lungs of diseased
buffalos. But there are growing claims from experts in the field that,
actually, refugees are the biggest problem.
That’s clearly the answer, then. Johannesburgians are telling the
world they live in a shit-hole to save their lions. That’s the sort of
people they are. And so, if you are thinking about going to the World
Cup next year, don’t hesitate.
The exchange rate’s good, the food is superb, the weather’s lovely
and, thanks to some serious economic self-sacrifice, Kruger is still
full of animals. The word, then, I’d choose to describe Jo’burg is
“tranquil”.
http://www.timesonline.co.uk/tol/comment/columnists/jeremy_clarkson/article5
821586.ece
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