SSS – Sept/Oct 2016

Interest Rates
The official cash rate has been kept on hold at 1.5%. Some analysts expect another cut in November but will all depend on inflation data. Majority of interest rates on investment lending are around the 4.2-4.5% range with some lenders offering sub 4% if packaged with an owner-occupied loan. If you currently have a NAB DHOAS loan greater than $250K your target rate should be 4.4% or below.

DHOAS
Our network now includes capacity to accept and process DHOAS home loan applications through Australian Military Bank (AMB). If you or someone you know would like to discuss DHOAS loan options, subsidies or the potential grants available for first-home buyers when building new, then please get in touch.

Australian Market
Cairns. Plans for the $8 billion Aquis casino project have been cancelled for a luxury hotel complex capped at $2 billion. If this project gets approved, it will still prove to be a boon for the Cairns economy (and land values). Although Cairns is predominately tourism driven, it could still be a good play given the low Aussie dollar and increasing tourist numbers coming to Australia from the Asia-Pacific region. I’m still keeping this market in the watch-list.

South-East Queensland. There’s a lot going on in this market particularly to the north and west of Brisbane. As mentioned previously, congratulations to those that purchased in Coomera and Pimpama as new-release land prices no longer offer investment value.

Key markets for us are now within the Ipswich LGA and north toward the Sunshine Coast. When assessing a potential market, key fundamentals are infrastructure, commercial investment and population growth. The following projects are either planned or underway in both regions:

-$5 billion Kawana Health Precinct
-$2.3 billion Sunshine Coast University Hospital
-$1 billion on the Bruce Hwy upgrade (linking Brisbane with Sunshine Coast)
-$400 million on the Sunshine Coast international airport upgrade
-$12 billion Springfield community
-$1.5 billion Springfield rail link
-$2.8 billion Ipswich Motorway upgrade
-$154 million Orion Shopping Centre
-$1 billion Citiswich Project (Ipswich CBD upgrade)
-RAAF Amberley major base upgrade

Adelaide. Since the $50 billion submarine project announcement this year, sales activity has increased across the city. Key markets we’re watching are within the Port Adelaide Enfield and City of Charles Sturt LGAs.

Law of Economic Rent. As mentioned, the above projects will attract population growth and strengthen local economies. Local land values will absorb this increase in economic output which is why land content is the critical piece to any property investment.

As always, please get in touch if you have any questions or would like to expand or start your long-term property investment portfolio with an experienced team.

QuoteTime is more valuable than money. You can get more money, but you cannot get more time. Jim Rohn

Strategy – The Defencewealth strategy of TWO-50-TEN™ is based on acquiring a $2million portfolio at 90% LVR over a 6-8 year timeframe. Once acquired we work to reduce the LVR to 50% over the next 4-7 years using a combination of capital growth and principal repayments. Once at 50% LVR, you will have some serious financial options but it will take time (10-15 years) to achieve. The types of properties Catherine and I recommend are considered investment grade based on experience and results and are selected for their balance in anticipated cash flow, capital growth and risk.

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