Finance advice

October rate predictions

By Reporter

Smart Property Investment’s panel of investment commentators have made their predictions concerning the RBA’s October rate decision, due this afternoon.

The RBA will leave rates on hold for October, according to the majority of Smart Property Investment’s commentators, despite some indicating that another rate cut is due to come within this financial year.

Liz Sterzel, managing director of PerthPerth, TAS Perth, WA buyer’s agency Property Wizards, believes that Malcolm Turnbull’s ascendency to prime minister may have given the RBA some breathing space, despite the continued worsening of commodity prices following recent market shocks.

“On the positive side, retail sales are up, the economy is moderating but still growing, and the new prime minister is aiming to restore confidence in the economy,” she said.

“The low Australian Dollar is helping the economy by making exports and tourism more attractive, and the record low interest rates are helping lift construction and services investment.”

Property academic Peter Koulizos, reflected this sentiment – arguing that the performance of the Australian dollar would be key to any future rate movements.

“My prediction is that interest rates will remain the same and won't be changed at the October meeting of the RBA. The decrease in the Australian dollar is working in favour of the economy and, at this stage, the RBA doesn't need to decrease interest rates. However, if the Australian dollar bottoms out and the economy is still sluggish, then the RBA might drop interest rates,” he said.

Cate Bakos, director of Cate Bakos Property, believes that market confidence is strong enough to prolong any rate cut until next year.

“Our dollar has weakened and Australian exports are once again more competitive. Unemployment figures haven’t worsened and our government changes have possibly increased public – and more-so business – confidence as opposed to creating instability.

“While we still have commodity concerns in relation to oversupply globally, I believe that the RBA will keep their powder dry for a rate cut in 2016 perhaps.”

Alan Fox, director of Propertunity, believes that recent lending changes have dissipated the need for any rate increases – citing auction performances as evidence of their impact.

“I predict the RBA will leave rates on hold in October. The APRA clampdown seems to be biting and having the desired effect on lessening investor demand. Auction clearance rates have been coming off the boil,” he said. 

Opinion from Smart Property Investment’s two investors on the ground showed a marked difference in outlook, despite both commentators reaching the same prediction.

Julian Lancey was steadfast in his conclusion, citing calming Sydney and Melbourne markets as the primary reason rates will remain on hold.

“Rates will not go up, they will not go down, they will stay the same. This is a sure thing,” he said.

“What a great month of property news it's been. The biggest news for me was reading that the auction clearance rate has decreased from its peak in the 90 per cent to now in the early 70 per cent – one of the first [signs] that the boom is over. Why? Maybe the increased interest rates for investors, maybe that some banks are asking for more of a deposit for these new 'risky' postcodes, maybe investors are looking at other cities.

“Regardless, the Sydney and Melbourne property hysteria is calming down and property articles are making their way back into the back of the newspaper.”

Investor Jonathan Preston was less sure – pointing to market activity overseas and domestically as a precursor to future rate decreases.

“September brought about some interesting developments. ANZ stuck their neck out with the 1.5 per cent rate call, based on the idea that the unemployment rate is [set] to rise rather than fall. There is also a lot of commentary coming out about auction clearance rates decreasing, which indicates that the property price concerns by the RBA will be somewhat alleviated," he said. 

“Lastly, with the US Federal Reserve holding off on increasing rates in the US, the AUD/USD is unlikely to drop significantly further in the short term, which is not what Glenn Stevens wants. All of this points to the next move being down. I don't necessarily expect it to happen this month, but if not this month then by March next year,” he said.

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  ["title"]=>
  string(51) "Boost for investors as app sets up off-site bidding"
  ["alias"]=>
  string(55) "boost-for-investors-as-new-app-sets-up-off-site-bidding"
  ["introtext"]=>
  string(144) "

Property investors are now able to identify and bid on auctions remotely using a new live-streaming functionality launched by Gavl.

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Called “Request an Auction”, the new functionality enables users to watch and bid on any Sydney or Melbourne auction remotely.

Through Gavl, prospective buyers are now able to register to bid on their preferred auction. The platform will obtain permission from the listing agent and confirm within 48 hours.

Vendors can also request to have their auctions broadcast to a larger buyer audience.

Co-founder Joel Smith said that auctions streamed on Gavl attract 47 per cent more viewers than traditional ones.

He said that Request an Auction will be valuable for remote buyers.

“Buyers are able to have Gavl attend any auction they nominate, so they will never have to miss out on an opportunity due to logistical complications in physically attending the auction.

“Vendors, too, have the opportunity to directly book an auction with us, so they can open up their event to buyers all around the world. With more potential buyers, they’re giving their property the chance to receive more bids and maximise their sales result.”

Mr Smith said that prior to the Request an Auction app, buyers were limited to what they could achieve through the Gavl technology.

Gavl is a live-streaming and bidding platform for real estate auctions.

Mr Smith said that it has streamed more than 6,000 auctions, which have achieved 3.5 million views from 50 countries.

Gavl’s Request an Auction function is currently being offered in Melbourne and Sydney only.

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Boost for investors as app sets up off-site bidding
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  ["title"]=>
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Having to split her time between Hong Kong and her original base of Sydney has not slowed Julia Tita’s goal of building a high-performance Australian property portfolio. Instead the resulting alterations to her strategy have positively impacted her investing success.

" ["fulltext"]=> string(3579) "

Having recently purchased her 6th property, Julia joins host Tim Neary to discuss her journey, share her ups and downs over the years, and reveal her thoughts on why some properties are better than others.

Julia also explains why she no longer makes a move without the help of a buyer’s agent, why working with a strong team of specialists is extremely important and discloses her long-term property ambitions.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

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AREAS MENTIONED:

Eagleby
Charters Towers
Townsville
Brisbane
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Sydney
Orange
Melbourne 
Glen Iris
Bondi

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["secure"]=> int(0) ["page_description"]=> string(11) "sample desc" ["page_rights"]=> NULL ["robots"]=> NULL ["access-view"]=> bool(true) } ["initialized":protected]=> bool(true) ["separator"]=> string(1) "." } ["displayDate"]=> string(19) "2018-06-18 03:15:56" ["slug"]=> string(72) "18171:how-a-move-to-hong-kong-impacted-julia-s-australian-property-goals" ["catslug"]=> string(28) "45:smart-property-investment" ["link"]=> string(92) "/investor-stories-1/18171-how-a-move-to-hong-kong-impacted-julia-s-australian-property-goals" }
How a move to Hong Kong impacted Julia’s Australian property goals
object(stdClass)#1224 (52) {
  ["id"]=>
  string(5) "18159"
  ["title"]=>
  string(88) "‘Common’ referrer practice of being paid on both sides of the fence coming to an end"
  ["alias"]=>
  string(82) "common-referrer-practice-of-being-paid-on-both-sides-of-the-fence-coming-to-an-end"
  ["introtext"]=>
  string(246) "

The practice of property investment firms sharing undisclosed kickbacks among the supply chain involved in development sales will be outlawed in NSW on 1 July this year under the Real Estate Reform being handed down by regulators in NSW.

" ["fulltext"]=> string(2238) "

Property commentator and valuer, Suburbanite’s Anna Porter, said the reform will address conflicts of interest.

She said they arise when a mortgage broker, accountant or financial planner receives part of the commission from the property firm, who receive their fees from the developer or seller.

“This puts the broker into a position by which they are being paid on both sides of the fence,” she said.

“Until now this has been a grey area and there was nothing stopping this practice.” 

Ms Porter said this has been a common practice in the industry.

"Some well-known mortgage broking firms openly admit to receiving $5,000–$10,000 per referral in their pocket.”

She also said this process has been going on for decades.

"Property investment firms commonly pass some of their commission on to the mortgage broker, accountant or financial planner as a reward to them for passing on the referral. This means that many brokers or financial service providers are making significant amounts of money just to refer on to a property firm, often totalling hundreds of thousands of dollars a year," Anna Porter said.

Ms Porter said the Property, Stock and Business Agents Amendment (Property Industry Reform) Bill 2017 will be in force from July this year, and will prohibit this practice unless the broker or referring partner also holds a real estate industry license.

"Under the new laws, if the broker takes a referral fee from the property firm, they will have to be a licensed real estate agent and also hold a corporation’s license,” she said. 

“Subsequently, every transaction that they receive a referral fee from, they will be putting their license up against the transaction and taking full liability for the conduct, practices and outcome of that transaction, even if they have little to do with the transaction; they are a party to it financially and therefore take as much risk as everyone else in the transaction.”

Mr Porter said where a referrer holds a real estate license, and receives a part of the sale commission, they may find themselves in breach of the ethical requirements under the act.

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‘Common’ referrer practice of being paid on both sides of the fence coming to an end

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