Winners And Losers!

Ever wondered how to beat the banks, APRA, RBA and our Treasurer, Scott Morrison?

It appears that they are all out to screw every cent they can out of you, they incorrectly see people accumulating property as an investment and Interest Only investment loans as risky.

Are they right? Well, I would argue that the heads of these departments are not qualified to make that decision. While most of us work and make choices to amass assets so we can retire happy, healthy and wealthy whilst avoiding a pension, the heads of these departments will receive a taxpayer-funded pension, which you and I could only dream of, for the rest of their lives. Seems fair, right?

Only a qualified person can perform a surgery so why is it okay for these people to interfere with the Australian property market? In a press release from the RBA last week, they clearly state that they are out to "curb growth and Interest Only mortgages".

However, what the RBA has failed to realise is this has caused the market to slow to the point where shortfalls in supply across all facets of the property market and not just apartments and units.

Over the past few months, significant declines in areas of Interest Only lending and tighter funding has severely impacted not only investors but also developers. While there is still a current supply of housing options available these declines will see reductions in new housing in the near future.

However, this is not all doom and gloom, when there are too few bananas in the store and a rising demand, the prices go up. While now may be a difficult time to obtain funding, ultimately this is a perfect time to capitalise on the property market.

Can We Help You Win?

The RBA has blatantly stated that some borrowers, which include investors, could experience increased financial stress as a result of higher repayments from either switching to a Principal and Interest loan or higher interest rates if they retain an Interest Only loan.

There is absolutely no justification for raising interest rates, all this means is the banks are getting you to pay for the Federal Treasurer's Bank Tax from the last budget. I remember when the banks promised not to do this, do you? I also remember how the Treasurer thundered that he would ensure the banks didn't increase their rates and pass this Bank Tax back on to the consumers. I wonder if he will remember this when the next election rolls around?

Two weeks ago we showed you can avoid this financial stress. If you haven't got the solution you can simply contact your Property Mentor and they will give you this information and the process to follow.

So the banks are taking away your spending money and stopping developers and as a consequence retail spending has also taken a hit which is costing jobs. It can be seen that not only are the banks affecting your pockets but they are now also affecting Government coffers.

How You Can Win!

So the average investor is put off by:

(a) by better-located quality properties,

(b) or continuing to expand on sufficient properties.

We can help you avoid both of these problems we can get you buying the better quality investment property rather than being locked out in the boondocks. We know you will need approximately 8 properties to avoid the pension, however growing your portfolio can seem like a daunting if not impossible task. We can help you start and continue to grow to your portfolio.

Your Treasurer believes that you can retire on 4 properties but I believe he is under the spell of Treasury - who are generally always wrong. Retiring on 4 properties will leave you just enough assets to remove you from a pension but not enough to maintain your lifestyle once you retire, you should be spending your twilight years spending not worrying.

The Emperor Has No Clothes

I hope you know the parable and in this case, the Emperors are the heads of the RBA and APRA and the Treasurer. They all have no clothes, in fact, APRA in its press release "macro-prudential policies (APRA and RBA's actions) it said, can it best moderate the growth of credit and prices for a while, but they can't reduce the high levels of debt and prices."

In other words, all their actions, all the pain they are causing, all the extra bureaucrats that get employed, to look at all these files of all the brokers of all the mortgages can at "best moderate the growth of credit prices for a while." They fail to see each year debt and prices will naturally get higher, it's called inflation. Importantly, it's obvious that these Heads don't understand the difference between good and bad debt.

How would you feel about letting these people providing you with financial advice helping you to avoid the pension?

Kevin Young