There has been a great deal of hype around how Australia’s banks are deviating from the historic norm of adjusting their mortgage rates in line with the Reserve Bank of Australia cash rate moves.  Two weeks ago, when the RBA slashed the cash rate by 50 basis points and the Big 4 banks passed on only 37 basis points (on average), the public outcry went up a notch. I can absolutely understand that there would be a reaction. Anyone with a mortgage is going to be very interested to know about changes to their cost of servicing that debt

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What’s more important…? How much of the RBA’s 50 basis point cash rate cut the banks have passed on or which bank actually has the lowest…

It’s all about resources and infrastructure..

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PROPERTY REPORT – June 2012

Homesales.com.au has launched ‘Investment Property Search’, a new free service specifically aimed at property investors.

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Homesales.com.au launches Investment Property Search

The Australian Tax Office (ATO) recently released taxation statistics for the 2009/10 financial year.  The data had a lot of good information, some of which was touched on in last week’s blog however, this week we will be specifically looking at rental income and deductions associated with property investment. Over the 2009/10 financial year there were 1,751,679 individuals that received rental income (owned investment property).  The number had increased by 3.5% from the previous financial year.  Of these 1,751,679 individuals, 1,110,922 individuals or 63% made a loss on their rental income; the remaining 37% of individuals turned a profit on their rental properties. Of those 63% of investors that had made a loss on their rental income, the typical loss was $9,132 over the year or $176/week.  The most concerning sign is that individuals that earn less than $6,000 a year are carrying a loss of $207/week with only those on an annual salary of more than $180,000 carrying a greater loss each week ($399).  It is difficult to determine what this actually means however, you could assume that a portion of those on incomes of less than $6,000 p.a.

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Negative gearing the choice of the nation

It seems that Chinese buyers have the buying power in today’s market. That includes Chinese-speaking Australians who hail from China and other parts of Asia Pacific. It also includes those who still reside China or other parts of Asia and want to buy property in the Asia-Pacific’s most stable, advanced country.

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In a first, a major portal puts listings in Chinese

The Australian Taxation Office has recently released their annual set of Taxation Statistics  ( you can see the whole report here ) for the 2009/10 financial year.  This is always a fascinating read (shame about the time it takes to be published though), particularly the tables which provide an insight about average taxable income across each of Australia’s postcodes. I’ve provided a summary of the top earning postcodes below across both the capital cities and regional markets as well as those capital city postcodes where mean incomes are the lowest.  We’ve also put together a bunch of thematic maps which are probably the best way to highlight the wealth trends across the capital cities. The top earners are the usual suspects, mostly clustered around Sydney Harbour, the Western Suburbs of Perth and a few bayside/inner eastern suburbs of Melbourne.  Nationally there are 47 postcodes with a mean taxable income of more than $100,000; that’s 11 more than recorded across the previous financial year.  More than half (57%) of these high income postcodes are located in Sydney, 21% are in Melbourne and 15% are in Perth.  Canberra and Brisbane showed only one postcode each recording a mean taxable income of at least $100,000, while the only regional postcode made the high earners list:  3441 which is home to the Macedon Ranges suburb of Mount Macedon

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The big end of town… Australia’s wealthiest (and poorest) postcodes

With the low CPI reading earlier this week, a drop in the cash rate next Tuesday is pretty much a done deal.   The question is now will the RBA cut the cash rate by 25 or 50 basis point?  According to financial market expectations (based on the  ASX cash rate futures yield curve ), the cash rate is likely to fall by 50 basis points by the June RBA meeting

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Welcome back below average mortgage rates

The Housing Industry Association (HIA) in association with RP Data released the December 2011 quarter Residential Land Report this week and it made for pretty sobering reading.  As the report states, over the past five quarters land sales have bounced around the bottom rather than showing any sign of improvement.  Over the quarter, residential land sales across the six mainland states fell by 0.8% with 10,479 sales.  The level of sales activity over the December quarter was 2.7% lower than over the previous year.

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Vacant land market weakest in more than a decade

Following a raft of economic data which has come out recently I felt it was important to reflect on this data.  It is obvious that the Reserve Bank (RBA) is currently in a very tough predicament. While much of the data is proving to be quite negative and providing a clear case for interest rate cuts, every now and then other pieces of data highlight that perhaps things aren’t so bad.

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The Reserve Bank is in a real bind