What are the pollies promising to do about housing?

What are the pollies promising to do about housing?

It’s no secret.  There are a lot of problems with housing at the moment.  Rental vacancies are at a record low.  Interest rate rises mean more expensive mortgage repayments.  And people still can’t afford cooled-market prices because the banks won’t lend them enough to cover the higher interest payments.

If you’re a politician, you might be scratching your head at how you can fix things.  And fix them fast!  Especially with a Federal election looming.

But there’s no mind-blowing solution that will solve all the problems in one fell swoop.

 

So, what policies are the parties proposing, exactly?

 

Well, they’re throwing around ideas like this:

 

  1. Build tens of thousands of affordable homes for rent by low-income earners and welfare recipients

 

  1. Help people buy homes with deposits much lower than the standard 20%

 

  1. See the government become a co-owner of some homes as a way to lower the up-front cost for buyers

 

  1. Cap mortgage rates at 3%

 

  1. Build 125,000 homes costing $300,000 each

 

But some renters, such as low-income-earning single mums, are not counting their chickens.  They see these stopgap measures as mere lip service.  And in reality, only those with sizable incomes can afford to buy.  Nothing new there.

Even though housing prices are gradually falling, they’re still much higher than they used to be.  And rent just keeps climbing.

Saving for a deposit has become harder than ever.

But even with the government’s 5% deposit scheme help, you risk being lumped with a whopping 95% mortgage.  And you’d be paying the bank more than the property is worth.  And now, with Labor’s 2% Help to Buy scheme, the demand on the property market will be under pressure all over again.  Plus, the government will stake a claim of up to 40% ownership of the house.

More housing is definitely an answer to balancing supply with demand.  But certain factors (looking at you, COVID, for starters) have reduced the availability of raw materials.  So, it’s now more expensive to build.  And this cost will invariably be passed on to the buyer.

And none of this even begins to address the poor renters!

Suffice to say, it’s all much harder than it looks.  And there is definitely no quick-fix solution.  This is a long, long, long game.

So, if you’re keen to hear about an investment strategy that might actually get you ahead, give us a call today.  We promise you’ll be glad you did.

Live in the studio: Agents talk investment

Live in the studio: Agents talk investment

Should you buy a studio apartment?  It may have a smaller price tag, but is it a wise investment choice?  There’s been a lot of stigma attached to this end of the market over time.  Yes, they’re cosy, but are they livable?  Yes, they’re affordable now, but what about the resale value?  It’s easy to see why potential homebuyers might be a bit gun shy when it comes to owning such a tiny, open-planned layout.

But once again, that old thing called COVID has caused a bit of stir.  Over the last couple of years, it’s forced people to reconsider just how much space they really need to live.  On top of that, the current property boom has squeezed first homebuyers and smaller investors out of the market.  So, a studio certainly seems like an attractive option.

Yet are they worth your time and money?

That all seems to depend quite heavily on who’s buying and where it’s located.  Young professionals and international students are snapping up studios in places like Newcastle.  It’s got a university and offers both a thriving city and a sea change for those looking for affordable accommodation.

South Melbourne is generating a lot of interest for similar reasons.  Plus, it has good public transport and other amenities, and offers convenience to its surroundings.

There are, of course, the more high-end apartments that end up costing what you might pay for a half-decent three-bedroom house.  One example is Clarence Street, Sydney, which currently presents a guide price of $900 – 950k.

So, the short of it is – it all depends on your long term goals.  In the short term, you get high rental yields.  But you don’t get much in the way of capital growth.  Plus, some snooty banks don’t even like lending for studios.

If you’re thinking long-term, perhaps an alternative option is on the cards.  That’s where we come in.  We not only help you get into the market, we get that mortgage paid off sooner too.  It’s definitely more than just talk!  Come and ask us how.

Rolling The Dice On Your Advice

Rolling The Dice On Your Advice

There is a myriad of financial advice out there – each advisor claiming to know what’s best for you.

So, it can feel rather daunting when it comes to choosing who to go with, yet it’s imperative to find someone you can trust.

According to the ABC, almost half of Australian adults have unmet financial advice needs.

But it’s hard to know where to turn when it can seem like many advisors are merely looking after their own financial well-being. It has recently become quite the greedy industry.

Is it better, therefore, to look outside the box and seek independent advice? And if you do decide to go down that road, how can you be sure (a) they indeed are an independent consultant, and (b) they do have your best interests at heart?

ABC states that about 45 per cent of advisors operate under a licence controlled by the ten largest financial institutions. They are referred to as company-owned advisors and have come under the spotlight for some shady practices.

Next, we have the independently licenced consultants, which are typically small to medium businesses under the ASIC umbrella, receiving similar scrutiny for scratching their own backs.

Then there are the truly independent advisors, of which there are very few, holding a membership with the Independent Financial Advisors Association of Australia (IFAAA).

IFAAA’s president, Daniel Brammall, states that –

“Independence is about impartiality, conflicts of interest or conflicts of duty.”

They can’t be associated with a bank, insurance or investment company (a product manufacturer), receive commissions of any sort and can’t charge asset-based fees.

Still, many people don’t question their financial advice. It seems that the other half of the Australian population are just blindly following their ‘leader’. But it’s essential to take a pro-active approach and do the research.

Are you truly making your money work as hard as it possibly could?

It’s one thing to acquire an adequate holding pattern – but an entirely different scenario to be financially free.

What if you found you could pay off all your debt in a third of the time it would usually take?

What if you then discovered you could not only start saving for the future, but you could also grow these savings exponentially?

GSA takes the time to understand your full needs, and therefore, we know we are the right ‘fit’ for your investment goals.

With many ads inviting you to “compare the pair”, it makes sense that you should be doing the same.

If you’d like us to send you a detailed plan so you can compare your potential provider against your current one – please get in touch. We’d love to help.