Tuesday, 31 January 2012

New Year’s Resolutions about Property for 2012

 

ING report that personal financial goals were the top of the list for New Year’s resolutions.  Are you thinking about your financial future and how to ensure you have the choices you need?

 

It’s been a confusing year with the Australian stock market down 15% (i), the Reserve Bank reducing interest rates, superannuation funds to September 2011 only returning 2% for the year  and Australian property marketing returning minus 1.33% for the year (i).


We all need to think about preparing our financial future and making sustainable choices.  Property has been a solid asset in many successful wealth creation strategies over the decades.  Australia, with its high home ownership, has many home owners seeking to gather their maximum funds capability to gain entry to their desired real estate.  This is the foundation of price increases: demand/supply, availability of funds and aspiration.


Many property investors consider entry price related to their borrowing capacity, and what the gap is between their income and outgoings, plus potential capital growth.  What they don’t consider is the resale opportunity as the value of the property. Many have lines of credit give you the opportunity to take borrow against the valuation price of the asset and reinvest.  However few LOCs are evergreen, providing permanent approval.  The rest have bank conditions that mean they can ask for the money back if your risk profile changes or that of the rest of the world.  So you can appreciate it is important to have a large and ambitious resales audience.

 

Content provided in collaboration with PW System.

 


 

i  http://www.theaustralian.com.au/business/australians-nominate-saving-more-as-key-2012-resolution-ing-survey/story-e6frg8zx-1226234736706

i  http://www.heraldsun.com.au/business/australian-share-market-starts-final-trading-day-of-2011-in-positive-mood/story-fn7j19iv-1226233199007

i  http://www.apra.gov.au/Super/Publications/Documents/Super%20Quarterly%20Performance%2020110930.pdf

i  http://blog.residex.com.au/2011/12/21/from-the-ceo-10/#more-1523

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