RBA Cash Rate
The official interest rate was again kept on hold at 2% for December. The RBA will meet again next in February. National unemployment has dropped to 5.8% and the Aussie dollar still hovers at around $0.72US. This is all good news. Inflation though is still quite low so expect the RBA to remain on hold with potential for another rate cut in early 2016.
There’s been a substantial drop in investor lending nationwide over the last few months. This is great news! Owner-occupied lending has increased as banks are still making it harder to borrow for investment purposes. This is the cycle at play and we’ve been here before.
Some commentators are expecting a recession in 2016-2017. The 18-year cycle has it timed for around 2019-2020. I’m still acquiring assets leading up to 2019 but we will need to watch our debt levels going into 2019. For our older members who might remember, effects will be similar to the ‘dot-com’ crash in 2000-01. Whilst 2019 may seem like a long way off – property investment is long-term.
Congratulations to our Investors and First Home Buyers that have recently constructed or are in the process. As you’ve seen, land acquisition and subdivision is a time-consuming task with significant red-tape attached. If you are seeking the DHOAS lump sum, just make sure your subsidy certificate is valid for when hand-over occurs otherwise you will miss out.
The south-east Queensland region still remains our investment location of choice. Significant infrastructure projects that add to land values combined with population and employment growth are the primary reasons. We have now missed the boat on the Pimpama/Coomera region due to high land price although Catherine has been successful in sourcing stock in other emerging markets. For mine, key areas we’ll be focussing on include Ipswich, Ripley, Narangba, Northlakes and Cairns in Queensland and Epping, Mill Park, Doreen, Mernda and Thomastown in Victoria.
I think the key indicator for wealth is not good grades, work ethic, or IQ. I believe it’s relationships. Ask yourself two questions: How many people do I know, and how much ransom money could I get for each one? ― Jarod Kintz
Once again thanks for all your support over 2015 and please feel free to get in touch over the holiday period if you have any investment questions.
We wish you a very festive and safe Christmas and New Year and look forward to assisting you and your family in building genuine wealth throughout 2016!