Real Estate Your Way

Five tips to secure a business loan

Assess your needs: Determine the purpose and amount required for the loan to guide your application process.

Check your credit score: Ensure your personal and business credit histories are in good standing to improve your chances of loan approval.

Prepare a comprehensive business plan: Present a well-drafted plan outlining your market understanding, growth potential and how the loan will be used to achieve business goals.

Research lenders: With the help of a finance broker, compare your lending options to find the best fit for your business.

Gather documentation: Organise necessary documents such as financial statements, tax returns, and legal agreements to streamline the application process and demonstrate your business's financial stability and credibility.

Investment in BTR on the rise

Build-to-rent (BTR) is becoming an increasingly popular option for investors as the number of projects continues to rise.

According to Savills, investment in the sector has been increasing rapidly and now captures 8 per cent of all transnational dollars across the Australian real estate market in the past year.

As a result, there are around 13,265 BTR units under construction in Australia and a further 32,300 that have or are seeking planning approvals.

However, only 42 per cent of the development pipeline currently has funding.

The benefits of invoice financing

There are five key reasons businesses might want to think about using invoice financing when dealing with cash flow challenges:

Confidentiality – Customers aren’t impacted by invoice financing.

Flexibility – Invoice finance can be used as required.

Speed – The process is organised in advance and can be finalised quickly each month.

High drawdown – This can be higher than an overdraft, a credit card loan or bank loan.

Ease of use – Well suited for small businesses.

Are balloon payments worth it?

A balloon payment is a large, one-time payment due at the end of a loan term that might be a great way to manage your car loan repayments.
Here are some advantages:

Lower monthly payments: Balloon payments reduce monthly instalments, easing financial strain.

Improved cash flow management: With lower payments, borrowers can manage cash flow better.

Access to higher-end vehicles: Balloon payments make expensive vehicles affordable, matching preferences and lifestyles.

Potential tax benefits: For business users, balloon payments may offer tax advantages by reducing taxable income.

Flexibility: Borrowers have choices at the end of the term – make the balloon payment, refinance, or trade-in for a new vehicle.

Time to buy in the cities?

The big capital cities could be the best buying opportunities in the next 12 months, according to a new report from Canstar.

With surging population numbers and limited supply, Brisbane, Adelaide and Sydney are shaping up to be leading property markets.

The report said that Brisbane has multimillion-dollar projects underway as it prepares for the 2032 Olympics and Sydney is benefiting from business investments and governments pouring millions into transport and education.

Adelaide property’s relative affordability has made it an appealing investment, with strong house price growth signalling good prospects for more growth ahead.

Luxury property outperforms

Luxury property has led the surge in prices over the past decade, with new data showing that high-end houses and units performed the best.
According to the Ray White Luxury Property Report, luxury house prices increased 84 per cent since 2014, while median house prices grew by only 70 per cent.
Notably, Hobart’s luxury market has been the best performing, up 122 per cent over the last 10 years, while Brisbane follows close behind with 102 per cent growth.
Meanwhile, luxury unit prices also outpaced median unit prices growing 58.3 per cent compared to 31.5 per cent.
Hobart had the largest growth rate across major cities with 101 per cent for luxury units and 102 per cent for median units.

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Confidence returns to the property market

Confidence in property is back, with industry insiders believing there will be more good times ahead.

According to the Property Council’s Confidence Index, national confidence in the property market has risen six points to 120, with a score of 100 considered neutral.

Sentiment was highest in South Australia and Western Australia, however, across Victoria, levels dropped to only slightly above neutral – the lowest in the country.

The confidence boost comes as the housing supply remains tight and demand continues to increase on the back of huge levels of immigration.

RBA UPDATE | Effective May 8, 2024

Following its two-day board meeting, The Reserve Bank of Australia (RBA) opted to hold the official cash rate at 4.35% for its third consecutive month. This decision came about because the board does not yet believe the time is right to move the official cash rate, despite the latest inflation data coming in higher than expected.

The board explained, “in the near term, inflation is forecast to be higher because of the recent rise in domestic petrol prices, and higher than expected services price inflation, which is now forecast to decline more slowly over the rest of the year.”

Property prices have hit yet another record high, with capital city house prices and units seeing value increases. According to Domain, capital city median house prices jumped 1% to $1.112 million, while capital city units rose 0.6% to a median of $637,578 over the quarter. For the combined regional areas, house prices fell 1.1% in the March quarter to $590,378. At the same time, units saw prices rise 2.6% to $465,711.

Oxford Economics Senior Economist, Maree Kilroy said the unprecedented increase in population numbers, led by mass immigration, is a catalyst for the uptick in prices, whereby despite higher interest rates, “demand eventually won out.”

Lest we forget. Please pause and reflect today on the sacrifices made in the past and present to protect the freedoms we enjoy today

The benefits of a business loan

There are five key reasons businesses might want to consider applying for a business loan to address their financial needs:

Flexibility – Business loans can be used for various purposes, such as expansion, equipment purchase, or working capital.

Speed – The loan application process is often streamlined, providing quick access to funds.

Higher loan amounts – Business loans can potentially offer higher borrowing limits compared to other financing options.

Ease of use – With straightforward terms and repayment structures, business loans are accessible to a wide range of businesses.

Confidentiality – Business loans maintain confidentiality, ensuring that customers and clients are not impacted by the financing arrangement.

Four things businesses overlook with invoice finance

Invoice financing can make a huge difference to your business's cash flows, but there are a number of things owners can overlook.

Costs and fees: People often overlook the various fees associated with invoice finance, including discount fees, service charges, and interest rates.

Impact on customer relationships: If you have to outsource invoice collection to a finance provider it can potentially strain customer relationships if not communicated properly.

Contractual obligations: Invoice finance agreements come with contractual obligations like minimum volume requirements and termination clauses that must be carefully reviewed.

Credit control: While invoice financing shifts credit control responsibilities to the finance provider, businesses should ensure they maintain professional standards to preserve customer relationships.

Office values reaching their bottom

Higher interest rates have weighed on the office market, however, investment bank Jefferies believes that prices are nearing the bottom.

Jefferies analyst Sholto Maconochie said there’s not much downside left.

“We’re probably within 5 to 10 per cent of the trough for premium and secondary buildings,” Mr Maconochie said.

“The valuers are letting the air out of the tyres.

“We’re pretty close to letting enough air out and getting back to race ready.”

2024 to see overseas investors return to commercial real estate

After a slow year from overseas investors in 2023, the next 12 months could see interest return to commercial real estate thanks to the Australian economy.

According to PropTrack, Australia offers political stability and economic resilience which is appealing in the current climate.

Australia’s population is forecast to grow by more than three times the OECD average over the next five years, which will support economic growth and demand for commercial real estate.

Another drawcard has been a declining Australian dollar relative to the currencies of many of our most active offshore investors, PropTrack said.

Benefits of putting down a deposit for your car loan

Deposits for car loans aren’t always mandatory, but there are some reasons why you might want to consider it.

Here are three benefits of putting down a deposit:

● You might be offered a lower interest rate, which can save you money over the life of the loan.
● Potentially a higher chance of approval, especially if you have a bad credit score.
● Greater purchasing power, as you might have access to a wider range of lenders.

Auction results remain strong in 2024

It’s been an impressive start to the year for auction markets, with clearance rates rebounding across the country.

Sydney’s preliminary clearance rate finished down slightly (76.2%) across 891 auctions this weekend, but the result is still considered very strong.

Meanwhile, Melbourne’s preliminary clearance rate came in at 66.2% and well above levels recorded late last year.

Across the smaller capitals, Brisbane recorded the busiest week, with 169 homes headed to auction, followed by Adelaide (119), Canberra (50), Perth (13) and Tasmania (1).

Adelaide recorded the highest preliminary clearance rate at 83.1%, followed by Canberra (69.4%) and Brisbane (65.9%).

Property prices have risen 32.5% since March 2020

Property prices have surged 32.5 per cent since the start of COVID four years ago, according to CoreLogic.

Prices increased the most over the past four years in Perth (53.8 per cent), followed by Adelaide (38.5 per cent), Brisbane (37 per cent) and Darwin (34.2 per cent).

Meanwhile Sydney values increased 28.6 per cent and Melbourne prices jumped 23 per cent.

Regional Australia has outpaced the capital cities, with values rising 35.2 per cent compared to 31.5 per cent for the city.

Regional areas outpace the major cities

Buyers are back searching for properties in regional locations, with price growth now outpacing the major capital cities.

According to CoreLogic, regional Australia recorded a quarterly increase of 1.2%, compared to capital cities that increased by 1% over the same period.

Capital growth remains varied across Australia's 50 largest regional areas, however many of the standout performers were from WA and Queensland.

WA’s coastal towns of Albany and Bunbury recorded the highest quarterly rises, with value growth of 7.7% and 6.2% respectively, ahead of Northern NSW's Lismore (5.5%), and Townville (4.7%) in Queensland's North.

RBA UPDATE | Effective March 20, 2024

From its March meeting, The Reserve Bank of Australia (RBA) has once again kept the official cash rate on hold at 4.35%. The reasoning behind this decision was highlighted in the board’s post-meeting statement, where they confirmed that “returning inflation to target within a reasonable time frame remains the Board’s highest priority.”

In an article by MPA Magazine (AU), the RBA said higher interest rates were working to establish a more sustainable balance between aggregate demand and supply in the economy. Meanwhile, PropTrack believes that the consecutive rate holds has helped boost vendor confidence. According to the property data group, new listings jumped 12% nationally from last year.

Melbourne led the capital cities, increasing by 27.8%, closely followed by Sydney on 27.7% year-on-year. New listings were also strong in Canberra (up 13.2%) and Hobart (up 4.3%). Adelaide (up 9.9%) and Brisbane (up 4.8%) recorded more new listings this year than in 2023 as well. While Perth, in contrast, recorded a 0.4% decrease.

Why you should consider asset finance for your business

Asset finance can be a great way to improve your business. Here are three reasons why you should consider asset finance:

Improved cash flow: Opting for asset finance allows businesses to preserve their cash flow and direct funds to critical operational areas. This proves especially advantageous for startups and small businesses managing day-to-day expenses and expansion.

Tax advantages: Payments made through asset finance agreements may be tax-deductible, enabling businesses to reduce taxable income and potentially save on taxes.

Flexibility and upgradability: Asset finance provides the flexibility to upgrade equipment or technology as newer, more advanced options emerge. This ensures businesses can stay competitive in their respective industries.

Apartment rents are rising in New South Wales – meaning apartment blocks are becoming more attractive to investors, according to CBRE.

CBRE agent Paul Grasso said he thinks apartment blocks and commercial property will be popular in 2024.

“This is the year of beds and sheds,” Mr Grasso said.

“With the consistent increasing of rents through the metropolitan Sydney market, we expect these blocks to be a hot ticket for the market.

SQM Research found that there was 16 per cent growth in unit rents over the past year, compared with 13.7 per cent for houses.

CBRE said this aggressive growth is expected to continue due to the housing shortage and apartment blocks present the perfect asset to capitalise on this trend.

The commercial market looking strong in 2024

Optimism has returned to Australia’s office, industrial and retail sectors going into 2024, according to Colliers.

Colliers Australia CEO, Malcolm Tyson, said office assets are seeing renewed interest.

“Premium office rents and investor appetite will continue to elevate this asset class above the rest of the sector, with the yield spread between Premium and A-Grade assets set to expand,” he said.

“Similarly, the spread between Premium and B-Grade office asset yields is likely to expand, as appropriate risk and costs are priced back into purchasing decisions.”

Mr Tyson said the resilience of the industrial market is due to tight incentives, low vacancy, and rental growth.

“We predict rental growth for a market that is currently renowned for the tightest vacancy rate globally (one per cent) and will continue to exceed the historical average rate, since 50% of industrial supply for 2024 is already pre-committed.”

Will your dream car qualify for car finance?

These days most people purchase a new car with the help of finance. However, there are some cars that lenders might not deem suitable to lend against with a traditional secured car loan.

Here are some factors to consider:

Age of the vehicle - most lenders require vehicles to be no older than 12 years of age at the end of the proposed finance term.

Type of vehicle - not all lenders are prepared to lend on all types of cars such as older exotic cars or prestige vehicles.

Imported vehicles - if a vehicle doesn’t have a history of being registered in Australia, some lenders might refuse to lend against it.

Repairable write-offs - any vehicle that has been declared a repairable write-off in most cases would not be able to be used as security for car loans.

Sydney house prices doubled in 10 years

The East Coast has led the Australian property market over the past 10 years with Sydney being the standout performer.

The Harbour City has seen house prices increase 107.1 per cent in 10 years according to CoreLogic, making it the best-performed market in the nation.

House prices in Melbourne (81.5 per cent), Brisbane (86.9 per cent), Adelaide (81.5 per cent), Hobart (85.5 per cent) and Canberra (81 per cent) also saw strong gains during the same period.

Meanwhile, Perth increased by just 35 per cent and Darwin fell by 0.4 per cent.

Nationally, median house prices increased by 85.3 per cent to $816,599 over the past 10 years.

Rents have now passed $600 per week

In good news for property investors, national rents have hit a new record high, passing $600 per week.

According to CoreLogic, rents are up 8.1 per cent nationally to $601 per week over the past 12 months.

Rents have increased the most in Perth, up 13.4 per cent over the past 12 months, followed by Melbourne at 11.1 per cent, Sydney at 10.2 per cent, Brisbane at 8.2 per cent and Adelaide at 7.7 per cent.

Median rents across the capital city markets ranged from $745 per week in Sydney, to $535 per week in Hobart.

Canberra and Hobart were the only markets to see a decline in rent values through 2023, falling -1.9 per cent and -3.5 per cent.

RBA UPDATE | Effective February 7, 2024

As its first decision of the year, The Reserve Bank of Australia (RBA) elected to hold the official cash rate steady at 4.35%. This meeting is the first of the central bank’s new schedule. Going forward, the RBA will meet every 6 weeks, totaling 8 meetings annually, rather than 11. This is so the board has more time to assess the economic impacts their last rate decision; and with fewer cash rate changes, there will be more time for mortgage holders to adapt to increases.

Commenting on the decision, PropTrack economist Anne Flaherty said, “While interest rates appear to have peaked, two years of high inflation have eroded real wages and, as of September, the household saving to income ratio was sitting at just 1.1%. This is the lowest level seen since December 2007 at the onset of the Global Financial Crisis.”

Despite this, property prices are expected to continue growing, with Perth and Brisbane predicted to be the top performers over the next 12 months. Oxford Economics anticipates that property prices in Perth will increase 9.1% this year, followed by Brisbane seeing values rise 4%. Meanwhile, Sydney sits at 2.6% expected growth, Adelaide at 1.4% and Melbourne at 0.9%. Overall, the capital cities are predicted to increase in value by 2.7% in 2024.