Government Property Incentives – Who is Winning?

When you buy a TV for $1000 and the store gives you a $200 cash rebate, what is the TV really worth? I hope you said $800! So when a young couple buys an off the plan house for $550k and the government gives them a bag of goodies totaling say $50k...

Buying off the Plan Risks

I have this discussion regularly with clients so I’ll set out the potential problems with buying off the plan. Critically, the time frame almost always blows out and settlement is often one or two years into the future. This creates a set of problems such as: 1....

Budget Home Loans – the problems

This month I’ve had a couple of clients mention really cheap home loan rates they found on the internet. “Gee whiz that was a great experience and I saved thousands”, are words I’ve never heard after a client has used one of these lenders. Let...

Do We Still Need Physical Cash?

Do we still need monetary notes? Earlier this year, due to the cashless society talk juxtaposed with Apple Pay on my phone, I was planning on doing an experiment to see if I could last a month without being cashless. The experiment was serendipitously brought forward...

Don’t Borrow from a Loan Shark – Advice

Loan sharks I came across a client last month who had been rejected because he took out a $600 payday loan from Cash Converters. Major banks don’t look favourably on customers when they see this type of loan in the credit history. In writing this article, I...

Higher Yield Versus Capital Growth

The importance of Growth 2 properties both for sale each $500k – which one is the better investment??? A. Good growth prospects, returning $15k pa (assume inner Melb) B. Low growth, twice the return ($30k pa) (assume regional) Of course a number of factors are...

Impact Credit Cards Have on Borrowing

Did you know… the impact credit cards have on your borrowing capacity? I regularly meet people applying for a home loan and I ask them the amount of their credit card limit. Most reply “I’m not entirely sure”, but then confidently follow up...

Understanding Property Price Growth

Why Does it Make Sense That Property Prices Have Increased 10x in 25 years In last month’s newsletter, I discussed that the price of houses in Melbourne has followed a trend of adding an extra 0 every 25 years. A house in 1942 worth $1k, was worth $10k in 1967,...

Can Property Prices Keep Increasing?

Why Property Growth Rates Must Slow I recently watched the owners of a house celebrate their sale after achieving a sale price of $1.5m. They had bought it 25 years ago for $150k! It made me wonder whether this type of growth could go on forever. I did some historical...

Cut up you Credit Cards

Why I said goodbye to credit cards How would retailers fare if credit cards didn’t exist and we reverted to cheque books? They would undoubtedly struggle. Notwithstanding this certainty, most retailers now charge us up to 2% extra on our credit cards to say...