Emag - Cairns Finance
Finance Focus by Cairns Finance

Australian Credit License Number: 415600 ABN: 70538583179

Welcome to our January newsletter
We hope that you and your family enjoyed a fantastic Christmas and New Year!

With the summer holidays in full swing, auction activity in our property markets around the country has been a little quiet as home buyers forgo the open inspection circuit in favour of the beach. So this month let’s do a review of the nation’s property market performance in 2017.

Read on to find out how your property market performed and what’s in store for 2018.

2017 Home Values

In the last quarter of 2017, month-on-month home value growth rates slowed considerably. In October and November there were little capital gains achieved across most capital cities.

However, across the year growth remained very positive in most markets. Darwin and Perth were the exception, where growth was still in negative territory during 2017. The good news for these markets is that analysts are expecting them to pick up somewhat this year, as employment and economic growth look set to improve in both regions.

In terms of capital growth around the nation, the outstanding performer for 2017 was Hobart at +12.25% pa. Check out the table below for a quick look at how your local market performed.

City % pa change 2016 to 2017
Sydney +3.09
Melbourne +8.89
Brisbane +2.35
Adelaide +2.98
Canberra +4.87
Hobart +12.25
Perth -2.30
Darwin -6.52
2017 Interest Rates

Even though we haven’t seen an official rate rise from the Reserve Bank of Australia (RBA) since 2010, interest rates did increase for both owner-occupiers and investors in 2017. On average, owner-occupier variable interest rates went up by 0.15% pa and the average variable investor loan went up by 0.34% pa.

Lenders indicated that the reasons for these increases outside of RBA movements are their increasing costs, other economic factors and a crackdown on risk management by regulatory bodies like the Australian Prudential Regulation Authority (APRA).

What’s in store for 2018?

CoreLogic is predicting the RBA will make no rate increases during 2018. This is good news for new home buyers, property investors and current home owners alike. 2018 will be a great time to focus on paying down your mortgage whilst interest rates remain low.

The slow-down in home value growth during 2017 is a sign the nation’s property market may be cooling. According to CoreLogic, the softening in the market is being driven by restrictions on interest-only loans by APRA. This restriction has significantly reduced property investment activity and therefore there is less competition to drive up prices. This is good news for first home buyers and we should see this sector of the market pick up during the first quarter of 2018. Call us now for a home loan health check.

An increase of 0.15% pa (or in some cases more) on your home loan can amount to a significant rise in your mortgage repayments – however our lending market is still very competitive. If you’ve had your home loan for a while, now is the time to talk to us about a home loan health check. We’ll be happy to compare the market to see if we can secure you a better rate with a different lender.

Remember, we’re here to help you to manage your mortgage and support you to achieve your property goals in 2018. Please give us a call for a chat about your plans. We’d love to hear from you!

Source: www.rba.gov.au, www.corelogic.com.au

6 questions to ask your mortgage broker

10 Top Caravan Holiday Tips

Will buying a smaller investment property provide a good ROI?

6 questions to ask your mortgage broker
Did you know that your mortgage broker can help you with a lot more than a home loan? Mortgage brokers are qualified as ‘credit advisors’, so we can be of great benefit to you in a variety of different ways when it comes to your finances. To start you thinking about maximising your financial goals this year, here’s 6 questions you might like to ask us in 2018!

1. How can I clear my debts faster?

According to the Australian Bureau of Statistics, about 29% of Australian households are classified as ‘over-indebted’. The most common form of debt is credit card debt, which is currently a real bother to about 55% of us!

If you want to clear your debts faster, particularly credit card debts, the trick is finding ways to save on interest, so your money goes towards paying down your debt rather than maintaining it. This could mean rolling all your debts into one loan with a lower interest rate. We could help you do this with a personal loan, or perhaps by refinancing your home loan to pay off your debts. Call us if you want to talk turkey on debt consolidation!

2. What’s the best way to save for my child’s education?

Dreaming of your child becoming a Nobel Prize winner one day? Then a great education is key. Paying for something like a four year university degree twenty years from now is not so much a question of saving your extra pennies, but putting your money to work for you so it generates money for the future. Ideas? Use your home as a money tree – put any extra money you’ve got into your home loan now, then access the equity to invest as soon as you can. Or if you already have plenty of equity, talk to us about refinancing now to get a deposit for an investment property or some other form of investment.

3. How can I take a year off work to travel when I’ve got a mortgage?

Ah-ha! A tricky one, but talk with us because there are a number of things we could do to help, depending on your personal financial situation and how much equity you have in your home. For example, we could crunch the numbers for you to see if renting out your property would cover your repayments while you’re away. Or to make that strategy work for you, potentially negotiate with your lender so you could switch to interest-only for a while to reduce the size of your loan repayments. We may even be able to refinance your loan to help you cover some of your travel costs, and at the same time, extend your loan period to reduce your repayments so a renter could cover them.

4. My car loan repayments are a killer! What can I do about it?

Refinancing your car loan is not out of the question. If you got your car loan from a car dealership, chances are you’re paying a whopping interest rate – we recently heard of a client who was paying as much as 14.5% pa. If this is the case for you, we could potentially find you a loan with a lower interest rate, or extend your loan terms to reduce your repayments. It may even be possible to roll your car loan into your home loan. Talk to us and we’ll see what options are available for you, or if you want to purchase a car this year – we are here to help set you up for success.

5. I’ve always wanted a jet-ski. Is it possible to get a loan for that?

Yes! Even though we usually specialise in home loans, we can also access great loan options for other large purchases. We call these ‘lifestyle assets’ – which covers everything from jet-skis and boats, to other items you may need like cars, caravans, campervans and even horse trailers! Give us a call – you’ll be surprised how quickly we can get it organised.

6. I work for myself. Would I still be able to get a loan?

If you are self-employed, there is no reason why you can’t get a home loan if you have a steady income. We can also help you with finance for commercial vehicles, equipment you may need for your business, or insurance to cover your business and personal needs. Why not talk to us now? The right way forward for you depends on your current personal financial situation and future goals.

Got a twisty one? Go ahead and ask us!

We’re always available to help you with managing your finances and credit facilities. We’re very much looking forward to helping you get ahead in 2018, so if you have a question, please give us a call. We’re happy to help.

Source: Australian Bureau of Statistics http://www.abs.gov.au/

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. This article does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

Welcome to our January newsletter

10 Top Caravan Holiday Tips

Will buying a smaller investment property provide a good ROI?

10 Top Caravan Holiday Tips
Wish you could take longer holidays and spend more of the summer in the great outdoors? Caravanning is a great way to make the most of your holiday budget and is increasing in popularity. Last year, we Australians made more than 11 million trips and spent more than 51 million nights in our caravans and campervans! If you’ve just bought a caravan, or you’re in the market for one, here are some great tips to make the most of your trips!

1. Plan ahead.

One of the biggest mistakes first-timers make is not booking a site in advance in the camping hot spots. The most popular locations can be booked out months ahead, so secure your site in each place you want to visit before you set off. If you’re on a budget, there are a number of free camping sites around Australia – check them out at www.freecampingaustralia.com.au

2. Allow enough time to get there in daylight.

Towing a caravan takes practice. You have to reduce your speed, allow for the wind factor and avoid creating a traffic jam that goes on for miles. It pays to start early to avoid heavy traffic and so you can arrive at your destination and set up whilst it is still light.

3. Practice reversing.

Reversing the caravan is a difficult skill to master so we recommend you practice at home. It helps if you have a partner to give you directions – walkie talkies can be a big help and will save you yelling and attracting an audience.

4. Get caravan insurance.

When you’re towing your own accommodation, it pays to get an insurance policy. Check out insurance that covers you for loss or damage anywhere in Australia due to accidents, storms, impact, vandalism, fire and theft. It’s also a good idea to ensure it covers your caravan contents.

5. Don’t leave the Esky outside.

Don’t make this newbie mistake! The interior space in a caravan is limited, so when bedtime rolls around, you might be tempted to put the Esky outside the door. This attracts the local wildlife and in the morning, there is no food left or your campsite is destroyed. If there is no room for you and all of your foodstuffs inside the van, put them in the car at night.

6. Laundry facilities may be limited.

There will come a time when you have to do some washing. Most good caravan parks provide laundry facilities, but it’s Murphy’s Law that everyone will want to use them at the same time. Consider doing your laundry at night. Remember to bring your own pegs.

7. Don’t rely on the kids for company.

Caravan parks offer great amenities for the kids. You can usually let them do their own thing without worry, but you’ll probably only see them when they’re hungry. Bring a good book.

8. Plan your meals.

If you’re going somewhere off the beaten track, there may be no local shop if you run out of essentials. Always bring plenty of fresh drinking water – the local water may not be drinkable.

9. Don’t depend on a campfire.

Don’t count on using a campfire to cook with. In many locations, campfires are prohibited or there may be fire bans. If it rains, you may not be able to light a fire. If your van doesn’t have cooking facilities, bring a BBQ.

10. Bring a first-aid kit.

It should include band-aids, bandages, antiseptic, sterile wipes, sunburn ointment, insect repellent, insect sting lotion, and burn cream. You should also include tweezers, scissors, safety pins and a knife.

In the market for a new caravan?

This is a great time of year to buy a new caravan. And if you need finance, talk to us! We can help you with a suitable loan for all kinds of large purchases – not just home loans. There’s still plenty of time to take advantage of the great summer weather and you’ll be surprised how quickly we can get a loan organised for you. Give us a call today!

Source: https://www.caravanindustry.com.au/research

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. This article does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

Welcome to our January newsletter

6 questions to ask your mortgage broker

Will buying a smaller investment property provide a good ROI?

Will buying a smaller investment property provide a good ROI?
A small property could potentially make a great investment, provided you choose the right one. The key to success with any investment property is thorough research. In this article, we take a look at how to research and choose the right small space property to give you the investment returns you’re looking for.

Pros - why choose a small space apartment or unit?

There are lots of benefits to buying a smaller property such as an apartment or a unit. Houses often have a higher entry price point due to land value, so you could potentially buy an apartment or unit with a smaller deposit. Ongoing costs for apartments and units can be a lot less too – council rates are usually higher on a house and in many states, you’re also required to pay land tax on an ongoing basis. With a unit or apartment, costs are limited to strata and body corporate fees.

Maintenance is also a cost that must be taken into consideration. If you purchase a house, all maintenance issues are your responsibility, whereas with an apartment or unit, many of these costs are covered by the body corporate.

These factors mean that a unit or apartment may be more favourable from a cash flow perspective – which is great, particularly for first time investors. Additionally, if you do your research carefully, you could potentially locate an apartment or unit in a location set to make both great capital gains and solid rental returns.

Cons - how small is too small?

Some developments offer studio and one-bedroom apartments of less than 50sqm. Many lenders are reluctant to finance these properties, and also some small space properties in high rise, high density developments, so it pays to discuss any property you may be considering with your mortgage broker before you sign a contract or put down your deposit.

Research is the key to success.

So how do you know for sure that a location will be in high demand for small space renters in the long term? Small space apartments and units are often in high demand in locations that are close to the action for singles! These may include the city centre and other busy employment hubs, universities, areas with vibrant nightlife, or excellent public transport facilities that provide fast and easy access to these amenities.

To find out what you need to know about a particular location, start by talking with local real estate agents and property managers. Essentially, you’ll want to find the answers to these questions about your chosen location:

  • How is the local economy doing? Is there employment growth?
  • What is happening that will affect supply and demand of small space property in the area in future? Are there many new developments in the pipeline?
  • What is the historical growth of property prices in the area?
  • What are the current rental yields on properties similar to the one you are considering?
  • What is the median price of properties in the area?
We can also provide you with a comprehensive report on any location or suburb of interest. We have access to specialised data from Australia’s leading property market data supplier, CoreLogic that specifically targets small space apartments and units.

How to analyse the market data.

You’ll want to analyse the data you collect to find a location with positive capital growth and solid rental yields to maximise the profit potential of your investment. (If you need help, please ask us as we have a great deal of experience!) Some other good indicators of these include:

  • Days on the market. How quickly do properties sell in the area?
  • Vacancy rate/demand to supply ratio. Is there much competition amongst renters?
  • Rental yield. What percentage of the price of the property can you collect in rent?
  • Auction clearance rates. Do sellers need to reduce the price to get a sale?
  • Limited available property. This could suggest that demand exceeds supply and this is likely to drive future capital growth.

Ask us to help you crunch the numbers!

There are always reasons for and against investing in any type of investment property. The right investment choice for you will depend on your financial position and investment strategy. If you’re considering in investing in property for the first time, a small unit or apartment could be a good way to start, so talk to us and we’ll help you crunch the numbers to see if they add up!

Remember, a good mortgage broker can be an invaluable resource when investing in property. We’ll help you choose the right loan that will not only serve your needs now, but set you up for further investments in the future. Talk with us today – we’d love to help you get started with a little property investment today!

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. This article does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

Welcome to our January newsletter

6 questions to ask your mortgage broker

10 Top Caravan Holiday Tips