In this issue:


December 2013


Welcome to our December newsletter

December has arrived and the holiday season is upon us! But there were no early Christmas presents from the Reserve Bank of Australia when it met last week for its final meeting for 2013. The overall decision of the RBA yesterday was to maintain the status quo and keep the official cash rate on hold at 2.5 per cent for a fourth consecutive month.

Whilst many property market analysts were hoping for a late decrease to the official cash rate in the final RBA meeting for the year, most were expecting the outcome. The current cash rate of 2.5 per cent is at its lowest point in 50 years and it is expected the RBA will keep it on hold until March 2014.

This is still good news for home owners and those looking to purchase property. In terms of interest rates, it has been a good year for borrowers with more than 50 basis points cut from the cash rate over the last 12 months and 175 basis points cut from the cash rate over the last two years.

Generally, the property market has performed well during the spring period. The housing market is obviously strengthening due to the current low interest rates and average house prices rose by 1.9% over the September quarter. Market data is also showing growth in home values in November.

Growing approvals in both residential and non-residential construction indicates an upcoming improvement to this sector of the property market. While home loan approvals for first home buyers are encouraging, loan approvals for investment properties appear to be at the forefront of current property market activity rather than first home buyers, or owner occupiers.

According to the statement released by the RBA Governor Glenn Stevens yesterday, further rate cuts would not seem to be out of the question in 2014, which will be a bonus for first home buyers. Adjusting the official cash rate is one of the tools the RBA uses to influence the level of the Australian dollar and yesterday in his statement, Governor Stevens said: “The Australian dollar, while below its level earlier in the year, is still uncomfortably high. A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy.”

This would indicate that we can expect the RBA to continue to support long-term depreciation in the Australian dollar, an indicator that further rate cuts may be coming up in the New Year. According to Governor Stevens, low interest rates and readily accessible funding for creditworthy borrowers are positive signs for the economy.

Overall indicators show an improvement to the economy and a slow return to consumer confidence. Retail trade figures from the Australian Bureau of Statistics showed positive signs with turnover rising 0.5 per cent in October, following an increase of 0.9 per cent in September. Whilst unemployment rose slightly this month, recent figures indicated the Consumer Price Index increased by 1.2 per cent over the September quarter, taking the annual inflation rate to 2.2 per cent – still within the Reserve Bank’s target range.

The RBA takes a two month break over the summer holiday period, with the next RBA meeting scheduled for Tuesday February 4, 2014. At this meeting we are looking forward to further news from RBA Governor Glenn Stevens about the possibility of more rate cuts.

Looking to find out what all this means for you? Want to discuss your Christmas financial wish list? Give us a call today and we’ll see what we can do to help you achieve in 2014.

Meanwhile, we hope you enjoy a wonderful holiday season and a happy and prosperous New Year.

If you would like to discuss any of the topics outlined in this newsletter, or simply want to chat through your financial options for the month ahead, give us a call.

Sincerely, the Team at Great Aussie Dream




Sensible spending during the silly season

The holiday season is very expensive to say the least! It’s our favourite time of year for gift giving and it’s easy to get more than a little bit silly with the budget. When buying gifts for family, friends and loved ones, getting into the spirit of things can often mean getting carried away. Here’s a few tips that will help you keep your credit card bills sane this holiday season.

1. Make a budget.

There are lots of incidentals during the holiday season that we forget to include in our budget. We tend to go over the top on new decorations for our home, expensive food and drink, gifts for family and friends and even new outfits to wear at parties.

Making a proper budget is a great way to avoid overspending. Think seriously about how much money you can actually afford to spend and make a worksheet that itemises where you will be allocating the funds. Keep a running total of your actual spending so you can tweak your budget and find ways to cut back if you spend too much on any one area.

There are some simple ways to spend less during the holiday season. Think about reusing some of last year’s decorations. Spruce up an outfit with a few accessories instead of splurging on a new one. Ask your guests to bring a plate when you entertain, instead of bearing the financial burden of providing everything yourself.

2. Plan ahead.

Once you’ve decided on a budget, make a plan on how you will go about spending it. Leaving things to the last minute often means we are less discriminating about prices because there’s no time to shop around. Shopping late is the number one culprit in blowing the budget, and planning ahead gives you extra time to save for your purchases.

The second most common budget buster is ‘self gifting’. That’s where you lose patience with the idea of waiting to see what Santa will bring you - splurging on gifts for yourself when you should be shopping for others. Remind yourself to be patient and trust that Santa will drop something down the chimney with your name on it!

3. Make shopping lists.

With your budget worksheet, you will have allocated funds to each area of spending, including food shopping and gifts. These tend to be the areas where spending gets out of hand.

Sit down and make a careful list of everything you need to buy. Compare the list to your budget and cross off unnecessary items if the price of your shopping list exceeds your budget. Once you have a comprehensive list, stick to it.

4. Avoid temptation.

When shopping for gifts, it’s easy to be tempted into buying more than you planned for. Resist temptation by researching your shopping list to find out exactly where you need to go to make your purchases and avoid going to stores you don’t need to visit.

Shopping online is a good way to stick to your budget – you can shop around for the best prices without ever leaving home. You also save on incidental shopping expenses like petrol, parking, lunch and snacks.

If you must go to the shops, leave your credit card at home to avoid the temptation of overspending. A credit card hangover from the festive season can last for several months and you could end up paying a lot more for your shopping when you add in credit card interest.

5. Get crafty.

Instead of buying gifts year, why not create a festive season pressie in the kitchen? Everyone loves a homemade gift – especially one you can eat!

Use these handy tips and you will stay sensible during the silly season this year! To make it even easier, we’ve located some handy phone apps to help you with your budgeting. Have a great festive season and a happy New Year.




Top tips for auction success

So you’ve done all the legwork and located the perfect property purchase. The problem is, if the property is going to auction, finding the right place to purchase is only half the battle. The auction process can be a scary and emotional experience, for both buyers and sellers alike. But if the numbers of auctions conducted this spring are anything to go by, you can expect to be thrown in the deep end of the auction process if you’re looking to make a property purchase. Here’s a few important tips to help you succeed at auction.

1. Get a valuation

A lot of time and heartbreak can be saved by understanding the true market value of the property you want to purchase prior to auction day. Remember, the guide price advertised by the real estate agent is likely to be much less than the property actually sells for. Getting an independent valuation from a registered valuations expert or a lending institution will help you to get a realistic price and prevent you from wasting money, time and effort pursuing a property you can’t afford.

2. Make inspections prior to the auction

Inspecting a property several times before purchase is always a good idea. But in the case of an auction, if you are really serious about purchasing the property you should consider having it thoroughly inspected by a building inspector as well as a pest inspector before deciding to attend the auction.

This is because an auction purchase is unconditional, and you will have no opportunity to complete these inspections afterwards. Going to auction without completing these inspections is risky and could result in you overpaying or having to pay extra to complete repairs after purchase.

3. Know the rules

The rules of auctions vary from state to state and auction to auction. If you are seriously interested in a property you should obtain the contract of sale and/or auction contract from the real estate agent or auctioneer and give it to your solicitor to review prior to the auction.

This will give you a clear understanding of the auction conditions, so you can prepare yourself for auction day. These documents will provide you with information such as the number of days to settlement, the amount of deposit required, exactly what is included in the auction price, the rules of your particular auction and so on.

By bidding at the auction, you agree to the terms of sale. However it is possible to vary the auction terms beforehand on the advice of your solicitor and with the agreement of the vendor. Reviewing the contract prior to the auction will give you the opportunity to ask for changes.

4. Get your financing in place

If you win at the auction, you will be required to pay a deposit on the spot so take along your chequebook. The deposit is usually 10% of the purchase price of the property, but may vary so you should remember to check the auction contract.

Additionally, the winning bid at an auction is a binding contract. That means you should have your financing in place before you bid at the auction, so talk to us as soon as you find a property that you’re interested in buying. To be financially prepared, you will need a written loan approval in hand as well as your deposit.

5. Set a bidding limit before you go

With your property valuation and written loan approval at the ready, you should be well prepared to set your bidding limit before you go to the auction. Remember this is your walk-away price and you should stick to your limit even if the auction bid goes as little as $1,000 over. Setting a bidding limit is one thing, but sticking to it during the heat of the moment may prove to be a bit tricky!

Remember that going over your limit may involve over-extending yourself financially and may also be risky in terms of securing the additional finance later. If you’re at the auction and the bidding goes over your limit then stop bidding immediately and consider leaving the auction to stop yourself putting your hand up again.

If you reach your maximum bid and the property is passed in, you may be offered the opportunity to negotiate with the vendor over price. If this is the case, remember your limit still applies.

6. Get familiar with the auction process

The capacity to bid with confidence is important when attempting to secure a property at auction. Attend as many auctions as you can prior to your auction day so you are fully familiar with the auction process. Some real estate agents recommend that you attend as many as 15 or 20 auctions, so you can eliminate the possibility of failing through inexperience on the day.

Make notes about the strategies implemented by the winning bidders. Take notice of the price a property is advertised for and the price it actually sells for. Talk to other bidders about their opinions of the auction and ask questions of the auctioneer so you understand how they identify bidders.

If you don’t feel comfortable bidding, consider engaging a professional purchasing agent. It may also be possible to get a more experienced friend or family member to bid on your behalf.

With these handy tips, you’ll know exactly what to do to be a success on auction day. Remember that bidding at an auction is not as difficult as it may first appear. And whilst the auction process may appear to favour the vendor, you can make it work in your favour if you have the know-how. The first step in succeeding at auction is having your financing in place, so talk to us today.




Increasing rent the right way

When was the last time you evaluated the rental value of your investment property? To keep up with market trends, it pays to review the rental value of your property on a regular basis. If it’s been a while and you feel you need to get more out of your investment property, here’s some useful information to help you increase rent the right way without upsetting your tenants.

Evaluate the market to decide a fair rental value

You may have an idea of how much rent you would like to receive for your property, based on what your mortgage and ownership costs are. Unfortunately, rents are determined by several factors including demand for your property, the amenities it offers and the state of the local rental market.

The easiest way to determine a fair rent for your property is to ask the advice of a qualified independent real estate agent in your area. They will be able to give you a fair indication of what similar properties in your area are yielding in rent. Make appointments with more than one real estate agent and ask them to come to your property to give you an evaluation.

It also pays to research the market yourself. Look up online listings to compare other rental properties with your own. You can also attend open days of rental properties in your area to see what amenities they offer for the rental price and how your property compares.

Update your property’s amenities

Tenants these days look for updated appliances and amenities when considering a rental property. If your property’s hot water system is ancient or the heater is inefficient and costs a lot of money to run, for example, then tenants will not be prepared to pay a premium price for your property. Make sure all the basics are up to date – are the carpets worn out? Have the drapes and blinds been replaced in the last 5 years? Is your property properly insulated? Does it have a decent cooker?

Also remember that regular maintenance expenditure is tax deductible and making sure your property is properly maintained will help you to obtain the maximum rental price. Conduct regular maintenance and your tenants will be more accepting of any rental increases you may decide to implement.

Upgrade with a renovation

If you want to take your rental property into the next rental bracket, you'll need to do more than make sure your amenities are up to date and your property is properly maintained. Find out what the more luxurious properties in your area are returning in rent and decide if it is worth the expenditure to renovate your property to take it into the next rental bracket.

Two key areas to focus on when renovating your investment property are the kitchen and bathroom. Your renovation doesn’t have to be expensive, mind you. A stylish renovation of both kitchen and bathroom can be achieved on a budget with good design.

Look at adding luxuries to increase rental values. Install a coffee machine, a dishwasher or a split level air conditioner, for example. You can expect to raise the rent on your property by $10 – 20 per week for each luxury appliance that you install, provided they are modern and new.

Wait until the lease expires

During a fixed lease term, the rent cannot be increased unless you have included a clause in the lease saying that it can. Most standard leases do not include these clauses and that means you will have to wait until the end of your tenant’s current lease to increase the rent.

In a market where rental prices are rising rapidly, opt for a shorter lease term of 6 months. Alternatively, include rent-rise clauses in the lease if it is to apply for longer than a year.

When the lease is approaching the end of its term, send your tenant a written notice that you will be increasing the rent and state the new amount. In most states, you are required by law to give at least 60 days notice in writing of a rental increase, so send out your notice before the lease expires.

If your tenant wants to renew their lease, they must agree to the increase in rent. If you raise the rent in small increments at the end of each lease, the tenant will be much less likely to leave than if you raise the rent by a large amount. Review the rent on your investment property whenever a lease is due to expire or every time a tenant leaves.

Remember, owning a rental property is a business investment. The most successful property owners have a business plan and use property management professionals to help them manage their investment. Property management costs are usually tax-deductible and getting professional advice and assistance from a reputable property manager can save you thousands and make the work of managing your investment property simple. If you need a referral to a reputable real estate agent or property manager, please let us know. We’ll be happy to help.


Wine review

2009 Henschke Keyneton Euphonium

This rich, ruby red Shiraz is a Barossa Valley classic and the perfect wine for your Festive Season dinner party. The wine is smooth and even, flavoured with dark plums, a sweep of spices and glossy berry fruits. The palate is full bodied, supple and very stylish. A bright wine that is very pleasant on both the palate and the nose.

Rating : 4 stars
RRP : $50


App review

Christmas Budget Lite

With this handy app, you can create a budget for your Christmas shopping and save your money for your holidays. It lets you create a list of people to buy presents for and assign realistic spending limits. You can also input gift ideas for each person and adjust your budget as you go. It’s a great way to keep your spending under control.

Available on :  iPhone, iPad, and iPod touch. Requires iOS 6.0 or later. This app is optimized for iPhone 5.




Contact us







Great Aussie Dream

T 1300 72 68 48
F 02 4733 4115

Australian Credit Licence Number: 387787 | ABN: 84129326352


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