With the shadow of the Royal Banking Commission still hanging heavily over the major banks, they don’t really want to give politicians another stick to beat them with but as UBS analyst Jonathan Mott told clients on Monday, “the spread between the bank bill swap rate and the overnight index swap rate was at its highest since the financial crisis. Put another way the “yield curve”, a line that plots fixed interest securities against the length of time they have to run to maturity
There are plenty of opportunities for sharp-eyed property investors with a lazy $500,000 looking for a home or apartment in most of the capital cities but where are the real bargains?
APRA, the Australian Prudential Regulation Authority last year forced the banking sector to limit interest-only (IO) lending to 30% of all new loans, down from 46%. Today borrowers holding some $400 billion in IO loans are facing arguably the tightest lending squeeze in modern history in addition to out of cycle bank increases to interest rates.
There are few feelings of financial disappointment greater than scrimping and saving(not to mention begging and borrowing) for a deposit only to see the prospects of living where you want, in a style to which you aspire, disappear over the affordability horizon. Various studies have disagreed on whether renting or buying – over the longer term is the better option but what if you could have your cake and eat it too?
Much has been written and broadcast of late suggesting the Chinese are intent on world domination over the next 20 or so years. So much so that tensions between many countries and the Chinese are as strained as they have ever been; snapshot last Tuesday’s concerted effort by the Turnbull government to smooth over strained relations with China. My personal view is the Chinese are very adept at taking advantage of countries, states and private and public corporations experiencing funding pressures to deliver on promises previously made. Take the recent investment by Chinese firm Aqualand in the listed but ailing McGrath real estate business
So you thought your mortgage rate was expensive. Spare a thought for the big end of town where the companies that develop your next apartment or office are facing stiffer borrowing costs as a consequence of a flight of capital out of the construction sector, due in part to growing perceptions the market is over cooked and a crash in prices, inevitable. Think Grocon, the iconic brand behind such Australian landmarks as Melbourne’s Rialto, the Eureka Tower and Sydney GPO who recently, in an effort to secure funding for its stake in the Barangaroo Central project have recently tied up a $40 million loan with non-bank lender; understood to be Maxcap at an annualized interest rate of 37% that’s about 10 times the cheapest home loan rate today.
It’s an age old story; calamity and liability collide; news agencies of every description emblazon the disaster across their front pages or 6pm news and invariably heads roll and compensation is paid, if not reluctantly. Think Dreamworld/Ardent Leisure, Volkswagen, AMP; the list goes on but I’m blown away by the attitude of the banks that support it to the company at the heart of the latest corporate fiasco; PEXA.
The Official “Mandatory” roll-out date for Positive Credit Reporting or Comprehensive Credit Reporting as it is better known in Government circles, was due to take effect 1 July 2018. The consequences to borrowers of diverse credit histories has been well documented in previous articles so I won’t reiterate the obvious; however; a recent move last week by the Labor shadow treasurer Chris Bowen to call for a 12 month delay to the roll-out may just entrench the big four’s dominance of personal loans.
Chinese investment in Australian real estate of all kinds has halved to $15.2 billion as internal controls and new taxes crimp demand, according to the latest Foreign Investment Review Board figures.
A new anti-avoidance rule announced in the federal budget put the kibosh on some aggressive tax-planning techniques. Relate to distributions from trusts, which is something the Australian Tax Office is also keeping a close eye on through its trust task force.
The measure is an anti-avoidance rule applying to circular (or round-robin) distributions by family trusts. Some trustees seek to make distributions through a chain of trusts so that the identity of the ultimate beneficiary is disguised and no tax is paid.