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interest_rates

Never Cross Collateralize Your Loan Arrangements

Cross-Collateralizing
Part 1: Don’t be easily Swayed by your Bank.

A COMMON piece of advice given by mortgage brokers to Commercial property investors — at least, by astute brokers — is to keep securities for each loan separate. In other words, any form of Cross Collaterization (as it’s known) is to be avoided at all costs.

So, just what is Cross Collaterization; and why is it so bad?

Put simply, it is the combining of one mortgage registered against two or more properties (or sometimes even your business) as security. [Read more…]

Commercial Property: The Interest Rate Dilemma

Interest-RatesSHOULD YOU be fixing the interest rate for the term of your investment loan … or simply running with the best variable rate?

Lurking behind that question is another concern: Will interest rates fall any further; and if so, by how much?

The Case FOR a further Interest Rate Cut [Read more…]

What Will Happen to Interest Rates
When The RBA Meets Next Week?

THE GENERAL consensus seems to be that the RBA will further reduce rates by 25 basis points. But can this view be fully justified; and what does all this mean for Commercial property investors?

The RBA faces a real DilemmaMost pundits would point to the recent CPI figures and say “Yes”! And on the surface, an underlying inflation rate of 2.5% per annum is plumb in the middle of the RBA’s stated target zone.

Yet despite what seems to be a rather hesitant mood by consumers, inflation in the service sector actually surged by massive 4.4% per annum. And some other sectors (not affected by overseas competition) also finished the year strongly, growing by 3.9% per annum. [Read more…]

Your Handy Economic Clock

Over the years, you have probably seen various economic clocks explaining the different phases, and their relative timing.

Economic Clock

Economic Clock

Anyway, I came across this rather useful one the other day.

As you’ll see, it is actually a “Multi-asset Investment Clock” — in that you have all the sectors displayed together: Shares, Property, Resources and Interest rates.

Furthermore, if you click on it … you’ll see the clock confirms Australia is midway through its Recovery phase.

h3. And the timing for Commercial property? [Read more…]

It’s both Good News … and Bad News!

Business Investment

Business Investment

Government statistics show that business investment rose by 3.3% during the three months to June — most of it accounted for by a massive 20% surge in Victoria.

This increase is the latest confirmation that Australia has entered its recovery phase — emerging from the global turmoil, without experiencing a technical recession.

h3. But what does this mean?
[Read more…]

Recognise the Investment Opportunities …

Anecdotal evidence suggests that consumers are cutting back on their spending around Australia. And it’s likely that luxury items and overseas travel will be the most affected.

The Flight to ValueA recent article in The Age expounded “The Flight to Value” — where Australian Property Monitors reported a 24% drop in the median price for Toorak Homes, in the 6 months to September.
[Read more…]

Some Answers in These Troubled Times

There are a couple of questions on the minds of Commercial Property Investors at the moment.

And they go something like this.
[Read more…]

Will there be an Office Market Collapse?

According to the recent Property Council (PCA) report in the Financial Review (AFR) … the 6 months to June saw overall demand for offices fall around Australia — as business confidence has gradually waned throughout the world.
[Read more…]

Trying to Make Sense of Things?

There has been much made of the poor US Retail Sales Data for December.

However, the figures were only down 0.4% on November. The most likely explanation being that some early Christmas shopping occurred November; and the increase in gift-card sales will not come through until early in 2008.

Clearly, the Sub-prime issues are having some effect. But, if you follow HS Dent at all — their view is that … “a short, mild recession is indeed likely, and we are arguably already in the middle of it.” (Update: Wednesday 16 January 2008).
[Read more…]

Only Your 3rd Day Back?

Well, here’s some good news on the next Property Workshop!

Following a barrage of emails from those of you who took off the week before Christmas … you will see that the early-bird registration has been extended until the end of January.

However, I suspect the “Full House” sign will be going up before then. Therefore, if you haven’t already reserved your seat … make your decision now — rather than miss out.

Looking forward to seeing you there.

Chris

How to Live with a Labor Government!

Will things really change all that much, now that Australia has wall-to-wall Labor governments across the country?

You’d better believe it!
[Read more…]