Category: Equipment Finance

| November Property Market Update
By Matthew Brown

Spring is typically the strongest season for the Australian Property Market and 2015 has been a year of the investor activity but since July it has become increasingly more difficult and expensive for investors to access funding.

Knowing this it should be a surprise that auction clearance rates in every capital city have dropped from again during November. What is more concerning is the continual weekly decline throughout the month to finish on all 2015 lows.

The average auction clearance rate for Australia in November was 48.69% with only two Victoria (67.25%) and Australian Capital Territory (66.75%) above the 60 percent level. This could potentially mean great buying opportunities early in 2016 particularly if the RBA maintain the current cash rate of 2% or reduces.

Rental Yields are still strong with vacancy rates remaining low. Darwin still the standout for both housing and apartment rental yields over 5%.

| Start 2016 on track to success with Goals – some quotes to get you thinking…
By Matthew Brown

As we enter the festive season of 2015 it’s a time to reflect on our achievements for the year. Did you achieve your most recent 90 day and 12 month goals? Is your life progressing towards the Success that you desire?

Below are some my favourite quotes that I recommend you read as review the year that 2015 was and plan for what 2016 will be:

  • “Everything you can imagine is real.” — Pablo Picasso
  • “Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.” — Barack Obama
  • “It is never too late to be what you might have been.” — George Eliot
  • “If you love what you do and are willing to do what it takes, it’s within your reach. And it will be worth every minute you spend alone at night, thinking and thinking about what it is you want to design or build.” — Steve Wozniak
  • “Try to be a rainbow in someone’s cloud.” — Maya Angelou
  • “In the midst of movement and chaos, keep stillness inside of you.” — Deepak Chopra
  • “We should remember that just as a positive outlook on life can promote good health, so can everyday acts of kindness.” — Hillary Clinton
  • “As we look ahead into the next century, leaders will be those who empower others.” — Bill Gates
  • “There are no mistakes, only opportunities.” — Tina Fey
  • “We can’t help everyone, but everyone can help someone.” — Ronald Reagan
  • “Be yourself. Everyone else is already taken.” — Oscar Wilde
  • “In the middle of every difficulty lies opportunity.” — Albert Einstein
  • “Education is the most powerful weapon which you can use to change the world.” — Nelson Mandela
  • “Your time is limited, so don’t waste it living someone else’s life.” — Steve Jobs
  • “But you have to do what you dream of doing even while you’re afraid.” — Arianna Huffington
  • “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” — Maya Angelou
  • “If you can do what you do best and be happy, you’re further along in life than most people.” — Leonardo DiCaprio
  • “Success isn’t about how much money you make. It’s about the difference you make in people’s lives.” — Michelle Obama
  • “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” — Warren Buffett
  • “Life isn’t about finding yourself. Life is about creating yourself.” — George Bernard Shaw
  • “The best way of learning about anything is by doing.” — Richard Branson
  • “Efforts and courage are not enough without purpose and direction.” — John F. Kennedy
  • “Don’t let the fear of striking out hold you back.” — Babe Ruth
| Real Estate Boom Worth $120B More After 2014
By Matthew Brown

New South Wales experienced quite the real estate boom over the last year, with homeowners netting $120 billion of extra land value. In fact, the average value of land in New South Wales soared an astonishing 11 per cent last year, reaching $1.12 trillion total, which included big rises in Sydney and on the Central Coast where the housing demand resulting from new infrastructure projects has pushed some current home prices sky high.

Australia Housing Market
Most states of Australia have felt the effects of the real estate boom of 2014 through increasing home prices. Source:

This real estate boom has led to current home prices increasing in almost every state. Average residential plots located in Woollahra have risen by 13.8 per cent to $1.4 million. Residential plots in places such as Hunters Hill, Manly, Waverley and Willoughby have surpassed the $1 million mark. In fact, Willoughby has seen the largest median increase, with average land values there having risen from $788,000 to $1.08 million over the course of last year – a stunning 37 per cent.

The rise in real estate value in these areas can be attributed to new infrastructure projects such as the North West Rail Link, which should be completed by 2019 if all goes according to plan. Its development will make many of these areas much more accessible than before. These rise in values can certainly be seen as a positive thing for homeowners, but there are some drawbacks as well. Due to the increase in property values throughout New South Wales, homeowners in this region can expect to pay increased land tax bills – specifically second home and business owners. This means that a the owner of a piece of land in Willoughby can expect to pay an average of around $10,000 this year – an increase of $4,000 from last year.

The 11 per cent rise in current home prices over the last year is even more astonishing when considering the fact that values only increased by 3.2 per cent the year prior. For more information about the current state of the real estate market in addition to advice concerning real estate investment, be sure to contact us at Your Corner today.

| How to Save Even More on Low Petrol Prices
By Matthew Brown

If you’re like many Australians, then you’re looking to save money, whether it’s to help cut down on debts or to meet future financial goals. This means that saving every little bit of money helps, which is why the recent low petrol prices are so helpful.

Petrol Saving Money
The additional money you will save at the petrol pump this season can be saved and used for other purposes. Source: Pixabay

Petrol prices haven’t been this low in years. This means that as long as you maintain your regular driving habits, you’ll be saving money when you fill up. This extra money can be put towards your debts or towards other facets of your life. For example, in the past year grocery prices have gone up by roughly 6.8 per cent. The money you are saving on petrol can be used to offset these costs.

Although petrol prices continue to fall in large cities, such as Adelaide, Melbourne and Sydney – where they are currently around $1 a litre, they are a little bit higher in regional areas, where you can expect to pay as much as $1.50 a litre. However, even though petrol prices are relatively low throughout the country, there is a higher average margin between wholesale and retail prices, which means you should keep an eye out for better deals when you can find them. Why settle for current prices just because they are considered low when you could be saving even more? For example, you can purchase prepaid fuel cards, which are typically available with either $100 credit or $500 credit, in order to save a 5 per cent discount on your fuel. This means that you are paying $95 for $100 worth of fuel or $475 for $500 worth of fuel. These savings may not seem like a whole lot, but they certainly add up, especially if you drive a lot.

The low petrol prices are certainly helping to put a little bit extra cash in the pockets of many Australians. However, can still save even more money by purchasing pre-paid fuel cards. For additional financial news concerning the cost of oil or for financial information and advice, be sure to contact us at Your Corner today.

| Home Prices in 2015 Are Looking to Slow in Their Growth
By Matthew Brown

The housing market last year experienced steady growth in home prices. While continued growth of home prices in 2015 is expected, experts believe that they will slow down. This is not something to be concerned about, however, especially considering that values are currently 8.5 per cent higher than they were at the beginning of last year.

2015 Home Prices
2015 is expected to be a turning point for climbing housing prices, slowing down since even last year. Source: Pixabay

The change in home prices will depend a lot on where the property is located. There will be a little acceleration in smaller capital cities, but these are the cities that were hit worst by the previous correction in home values. Even larger cities, such as Sydney, can expect the steady increase in home prices to finally slow down. Home prices in Sydney ended up at 12.4 per cent higher than the previous year and experts are predicting that it will only experience half the rate of growth in 2015. However, this rate of growth will still be quite strong and will most likely remain higher than the rate of growth that many capital cities experienced last year.

Melbourne’s housing market is also expected to slow down throughout 2015, mostly due to the fact that low rental yields and tighter financing controls concerning investment lending will reduce the demand of investors. Home prices should continue to grow in Brisbane at levels that may even potentially outperform the average capital city growth. Then there’s Adelaide, which is expected to experience modest increases in values throughout this year. This shouldn’t come as too big of a surprise considering that the city has always been a steady performer and doesn’t experience the same ups and downs and volatility as other larger city markets usually experience. One of the reasons for this is most likely due to its stable migration and population growth and its lack of overbuilding.

Keeping track of home prices in 2015 is important if you plan on buying or selling property. These are a few of the expected trends in some of the different areas around Australia. For more property investment advice or for additional real estate news, contact us at Your Corner today.

| What the Lower Petrol Prices Mean for You
By Matthew Brown

If you drive a vehicle, then odds are you’ve noticed that petrol prices have decreased significantly over the past year. In fact, at the moment petrol prices are at a five-year low. Since the middle of 2014, petrol has dropped from $123 a barrel to under $62 a barrel. So what exactly do these low petrol prices mean for you?

Petrol Prices
The current trend in lower petrol prices is having significant benefits to the average Australian consumer. Source: Pixabay

First of all, it’s important to understand why petrol prices are dropping so much. Basically, there has been a reduced demand from major importers such as the European Union, Japan and China. Other importers, such as the United States, have increased their own oil production, which means they no longer need to import as much. Then there’s the fact that supply chains that were previously disrupted, such as Libya and Iraq, have come back on line. This has led to a major over supply of petrol. Usually, this results in a cut in production in order to create demand. However, OPEC has decide to keep producing oil so that they can drive the price even lower, thereby attempting to retain its market share.

Lower petrol prices are actually hurting some countries. For example, Russian currency is tanking in value because of it, leading to a huge hike in interest rates by its central bank. For Australia, however, the lower petrol prices will be beneficial in a number of ways. First of all, as long as you use your car like you normally do, you’ll be saving money since you won’t be spending as much filling up your vehicle. This added spending power will help to boost the Australian economy. There’s a good chance airfares will be reduced as well since the cost of flight will be reduced. There may even be a decrease in grocery costs due to the decrease in transportation costs to grocery stores.

Low petrol prices should have a beneficial effect on Australian consumers. Not only should you be able to save money on petrol, you may save money on other products and services as well. Contact us at Your Corner for more financial news today.

| Household Mortgage Debt is at an All-Time High
By Matthew Brown

You might think that the global financial crisis would deter Australians from taking out large home mortgages, but you would be wrong. Although household mortgage debt slowed down between 2008 and 2012, they are back to record highs. In fact, the ratio of household debt to income is currently at 151 percent, which is the highest it’s been since March of 2008.

Mortgage Debt
If you plan to take out a mortgage, make sure you can cover any potential rate increases in the housing market. Source:

These debt levels are more than three times what they were in the early 1990s and are higher than many of the debt levels in other developed countries. Overseas investors are a little worried about such a high debt load, which comes as no surprise considering what could potentially happen to borrowers if there was a large increase in mortgage rates or if they were affected by an economic shock.

Even though interest rates are currently at record lows, the Reserve Bank stated that the burden of meeting loan repayments is currently at its 10-year average. The share of household income that’s needed in order to pay the interest on an average loan in Victoria and NSW over the next ten years is already at historical highs. Because a huge portion of household budgets in the country’s biggest two states are going towards paying off the interest on their loans, many economists fear that the average household debt compared to income is most likely near its limit.

There still remains a risk of borrowers over committing due to the act that interest rates remain low and there is a ton of competition currently in the property market. You may be tempted to take out a mortgage as interest rates are currently below 5 per cent. However, you should make sure you can still afford your repayments in case there is a hike in interest rates.

Although mortgage rates are currently low, household mortgage debt is at an all-time high. If you plan on taking out a mortgage, make sure that you can cover any potential rate increases in the future. For more information and advice concerning your mortgage, be sure to contact us at Your Corner today.

| A New Bill Could Lessen the Super Gap for Women
By Matthew Brown

One’s financial future is one of the most important concerns that Australians have. Most Australians would like to be able to retire as early as possible and to be able to live out the rest of their lives in comfort. This depends a great deal on their financial security, which explains the existence of the superannuation fund. The super is an arrangement in which employers are required to pay a portion of their employees’ salaries and wages into a fund. Additionally, you can put your own money into the fund as well, thereby using it as a savings account of sorts. While the superannuation fund is goes a long in helping to secure the financial futures of Australians, it’s not without its problems. For example, there has been a huge disparity between the supers of men and women, known as the super gap. Fortunately, steps are being taken in order to eliminate this super gender gap.

Super Gap for Women
The supers of men and women in Australia has experienced a huge gap, and steps are being taken to eliminate this discrimination. Source: Pixabay

Only a few years ago, in 2011 and 2012, the average balance of a woman’s super at the point of their retirement was $92,000 less than the average balance of the super of their male counterpoints at their point of their retirement. This is quite a big difference and illustrates the huge super gender gap that currently exists. It’s also somewhat strange when learning about this super gender gap, since it is a breach of the Australian anti-discrimination legislation for employers to contribute less to a woman’s super than to a man’s super. The issue lies in the fact that employers cannot contribute more to a woman’s super than to a man’s, even though there are a number of issues that female workers often deal with that male workers do not – such as the need for parental leave and the fact that many women are not paid as much as their male counterparts.

A new bill was recently introduced in order to allow employers to boost their contributions to women’s supers in order to make up for parental leaves without being found in breach of Australia’s anti-discrimination laws. This bill is known as the Sex Discrimination Amendment Bill 2014. Adam Brandt, the workplace relations spokesperson and Greens Deputy Leader, hopes that this will prevent women from entering retirement with less to live on than men. Brandt argues that the working life of a woman is simply different than that of a man, but that their financial security in retirement should not be negatively affected because of this. Not only are women more likely to go on parental leave, they are also paid as much as 25 per cent less than men on average. Not to mention that there are more and more women in casual and part-time employment.

Employers who want to contribute more money to female employees’ super funds in order to compensate for situations such as parental leave must apply to the Sex Discrimination Commission in order to do so. The Sex Discrimination Commission will assess such requests case by case and provide exemptions to those that are approved. There are companies that have been able to apply for exemptions on behalf of their female employees with some success. But this is still an obstacle that companies have to overcome in order to contribute more to female supers. Not only can the Sex Discrimination Commission deny requests, but many companies may not simply want to be bothered with the effort of having to go through them due to the time it takes to do so.

Even with the existence of the anti-discrimination bill and the Sex Discrimination Commission, female Australians still face inequality in the work place. The fact that women workers tend to end up with less money in their supers at the beginning of retirement than their male counterparts is a serious issue, and one that has arisen because of the anti-discrimination bill. However, this odd paradox wouldn’t exist if women weren’t still facing inequality in the workplace in other forms, such as in the amount that they are paid. However, even if pay was equal, the fact that women often have to take a break from working for parental leave is something that should be taken into account, and is a reason why employers should be allowed to contribute more money into a woman’s super. Hopefully, the Sex Discrimination Amendment that was recently introduced will pass.

While we have improved leaps and bounds in terms of gender equality, there is still a gap in equality that exists, especially in the workplace. This is most prevalent in the relatively large super gender gap that currently exists. The Sex Discrimination Amendment is a step in the right direction in terms of helping to eliminate the super gender gap.

Superannuation funds can seem a bit complicated. For information about how superannuation funds work and for advice on how to best use your superannuation fund to your advantage, be sure to contact us at Your Corner today.

| How Older Australians are Hurting the Finances of Young People
By Matthew Brown
Older Australian
In the current Australian economy, the wealth is skewed towards older Australians. Source: FreeDigitalPhotos

There has been an increase in the wealth of older Australians over the last decade. In fact, Australians between the ages of 65 and 74 have an average of $200,000 more than they did eight years ago. However, the average wealth of younger Australians has actually gone backwards in that same time span. Unfortunately, the finances of young people are directly affected by older generations.

One of the reasons why older Australians have become wealthier is due to the housing boom. The income for older Australians has grown at a much faster rate than younger Australians as well, giving them the opportunity to save more money. However, even though older Australians are making more money, they are paying less taxes. This is a result of the superannuation tax arrangements for older Australians.

Once you reach the age of 60, you can reduce your income by as much as $5,000 per year using super tax concessions. Additionally, you can reduce your tax payable by as much as $6,000 through the use of the Seniors and Pensioners Tax Offset. Older Australians also receive more benefits from the tax and welfare system in Australia. Pension increases have been financed through budget deficits instead of being financed through the reduction of benefits for other age groups or the increase of taxes.

Although younger Australians have been able to afford to help finance the retirement of older Australians while still improving their living standards over the last 30 years – in part because incomes have doubled in that period – they won’t be able to do so much longer if the trend continues as it has. This is partially due to the fact that many experts expect economic growth over the next few decades to be much slower for developed economies such as Australia’s. This could eventually lead to older generations having more wealth than younger generations.

The finances of young people are being directly affected by those of older generations, and not in a positive manner. For more information concerning the current financial state of Australians, contact us at Your Corner today.

| The Murray Inquiry: What You Need to Know
By Matthew Brown

The Murray Inquiry was released recently and as you might know, it was supposed to kickstart a number of financial reforms that would benefit consumers all over Australia. But will it actually do that?

The Murray Inquiry
Stay up to date with the latest Australian financial news to keep informed about your marketplace with Your Corner. Source: FreeDigitalPhotos

When it comes down to the very basics, Murray’s report on the financial system will basically ban borrowings from DIY super funds as well as hit bank dividends. As a 290 page report that’s supposed to provide all kinds of visionary reforms, the reforms are somewhat vague and lacking. For one, there will be new capital controls on banks that are expected to be paid for with less generous dividends and perhaps a very small increase in mortgage rates. However, this will be left for the APRA (Australian Prudential Regulation Authority) to figure out.

Any super reforms suggested by the report, such as the lowering of super fees, will require a Productivity Commission inquiry – and that’s only once MySuper is bedded down sometime during the second half of 2017. Not to mention that super reforms simply won’t occur unless there is bipartisan support.

So you’re probably wondering what reforms will deliver what amounts to super balances, right? Unfortunately, the report doesn’t itemize these things. Instead, it contains a footnote that shows around a 15 to 30 per cent increase would come the encouragement of retirees to take out more annuities. The Murray Inquiry does recommend the removal of tax impediments as well as regular projections for consumers on what their likely retirement income will be instead of just the balance as it is now.

Then there’s the discussion concerning the ban on future borrowings by DIY funds. Not only is the report unclear about whether popular installments would be included, but no date was included as to when this would go into effect, not to mention that bipartisan support would be needed for it to pass.

Although the Murray Inquiry was meant to benefit Australian consumers through the recommendation of serious financial reform, it remains to be seen if this actually happens. For more financial news and advice, be sure to contact us at Your Corner.

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