Resources: Market Update

Reserve Bank of Australia (RBA) governor Glenn Stevens has hinted interest rates could rise before an expected peak in unemployment next year.  As the economy recovers in the second half of 2010 rates may rise to head off inflationary pressures.

The RBA governor said  "It appears at this stage ... that the downturn we are having may turn out not to be one of the more serious ones of the post-war era, in contrast to the experiences of so many other countries,"

The market is factoring in a rise of a full per cent at this time.  Stephen Walters JP Morgan chief economist believes the RBA are showing signs interest rates will rise in 2010 as they try to prevent an inflation breakout in 2011 and 2012.  "It will be a tough one to sell, but the (RBA) governor did not rule out that scenario" he said


IS YOUR HOME INSURED?

Posted 23/07/09

In Australia an estimtated 31% of homes are uninsured and worse still almost 80% of those insured are under insured.   Your home and contents insurance should provide the cover you require to repair or replace your home and contents in the event they are stolen, damaged or destroyed. 

IS THE WORST OF THE CRISIS OVER?

Posted 15/07/09

Paul Sheard, global chief economist at Nomura Securities International told a roundtable briefing in Sydney on Tuesday that the worst of the global financial crisis is probably over but the economic pick-up will be slow.

He added that "The bottom really is we think the worst is over, both in terms of the economic downturn and the financial system near-collapse."

His comments echo that of Westpac chief economist Bill Evans.

The Westpac-Melbourne Institute leading index of economic activity has shown signs of improvement over the last 3 months.

Mr Evans said in a statement "This May reading supports the reasonable expectation that we have passed the worst, although the index is still contracting on a six-month annualised basis,"

Posted 09/07/09

The Reserve Bank of Australia (RBA) has kept official interest rates on hold again as signs emerge that the global economy has stabilised.

Governor Glenn Stevens said in a statement "economic conditions in Australia have to date not been as weak as expected a few months ago"

"The board's current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed,"

"In assessing how it might use that scope, the board will continue to monitor how economic and financial conditions unfold and how they impinge on prospects for a sustainable recovery in economic activity."

He later added that "downside risks to the outlook have diminished, with conditions in global financial markets improving this year and action to strengthen balance sheets of key financial institutions under way,".

In conclusion he pointed out that "The effects of these changes will still be coming through for some time yet."

JAN-MAY 2009 PROPERTY MEDIANS.

Posted 02/07/09

Property in the majority of australian cities is showing signs of steady growth this year compared to the rest of the world.  Below is  the latest median price info from RP Data which shows Melbourne with the highest increase since January.  A lot of commentators now believe we have hit the bottom of this cycle with some believing we could see as much as a 20% rise over the next 3 years.   

Adelaide values up 0.5% to $396,839

Brisbane values up 2.6% to $432,101

Canberra values up 2.1% to $460,309

Darwin values up 5.5% to $444,846

Melbourne values up 6.1% to $443,811

Perth values up 0.5% to $468,052

Sydney values up 5.2% to $529,785


THINGS TO HAVE AT TAX TIME FOR INVESTORS IN PROPERTY.

Posted 02/07/09

To speed up time with your accountant and to ensure you recieve the correct refund, it is important that you have all necessary documentation at your fingertips.  This should include the following:

Interest paid on any loans

Any travel expenses

Property related expenses

Annual statement showing rent received, agent fees and repairs

Rates both council and water

Insurances

It should also be noted that residential property investors should have a depreciation schedule for each investment property they own. 

Further to this remember, that you can only claim expenses relating to your investment property for the period it was was rented or available for rent.

In conclusion many investors are losing potential tax refunds by failing to take advantage of the tax benefits offered to them, so it is adviseable you consult a professional.