Archives for May 2010

Distortion Guaranteed?

20 May, 2010 by Leave a Comment

While the Rudd government may have moved quickly to provide guarantees for the major Banks during a financial turmoil … the impact of doing so has been disastrous for borrowers.

Right now, these major Banks seem to account for virtually 80% of all owner-occupier loans for property.

As such, the margins they are charging have never been higher — despite the Banks’ protestations of being “squeezed”.

RBA's Dilemma

RBA's Dilemma


Therefore, overall borrowings borrowings have been slowly trending downward over the past six months — because the major Banks have effectively amplified the rate increases handed down by the RBA.
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Filed Under: Economic Issues, Interest Rates, Residential vs Commercial Tagged With: , , , , , , , , , , , ,

Is Negative Gearing for You?

13 May, 2010 by Leave a Comment

Buying and negatively gearing a Commercial investment property is not forever in one — particularly, with interest rates on the rise.

And if you already have high personal debt … adding to that wouldn’t be a smart move on your part.

Make Borrowing just one of your Tools

Negative Gearing

Negative Gearing

Any gearing you decide to take on, should be viewed as part of your overall strategy — and not there simply to minimise your tax bill.
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Filed Under: Buying Criteria, Economic Issues, Interest Rates, Investment Objectives, Using Debt, Your Exposure Tagged With: , , , , , , , , , , , , , , , ,

Interest Rate Rises …
Are they a Good Sign?

5 May, 2010 by Leave a Comment

The RBA’s decision on interest rates yesterday came about because of what’s happening here in Australia, rather than in Europe.

It has been made against the backdrop of our exporters having recently extracted massive price hikes for iron or in coal, as a result of China’s strong growth.

Since the global turmoil started in 2008, the $A has climbed by nearly 55% against the $US — and just over 40% against our other key trading partners.

RBA Logic

RBA Logic

This has more or less offset the rise in Australia’s local retail prices, through a sharp decline in the cost of imported items — like electrical goods, clothing, footwear and furniture.

As a result, the NAB’s business confidence index stands firmly positive for the third consecutive quarter. And even more importantly, actually improved throughout the last quarter.

h2. How will this affect Commercial Property?
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Filed Under: Economic Issues, Global Scene, Interest Rates, Investment Objectives, Investment Opportunity, Offices Tagged With: , , , , , , , , , , , ,