A lender has recently put a new offer to the market of 4.39% Comparison rate 4.44% for loans of $150,000 and above. Snap shot of details as follows:

• Loans within 80% LVR 4.39% Comparison Rate 4.44%
• Over 80% LVR 4.69% Comparison rate 4.80%
• No application fees
• To approved applicants
• For a limited time

*Each comparison rate is based on $150,000 over 25 years.
WARNING: For qulaified applicants. These comparison rates apply only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

Suncorp-owned Guardian Advice will have to appoint an independent consultant approved by the Australian Securities and Investments Commission for the next two years to ensure it is complying with its obligations under the law.

Guardian Advice currently employs 257 authorised representatives and has 130,000 clients across the country.

ASIC said it was concerned the company was not complying with its general obligations as an Australian financial services (AFS) licensee, including failing to properly supervise its advisers.

Specifically, ASIC was concerned that Guardian Advice did not “properly assess and monitor its representatives’ competence to provide financial services”.

According to the watchdog, Guardian Advice also failed to meet its record-keeping obligations, did not adequately respond to identified breaches by its representatives, nor have in place adequate human and technological resources.

“The weaknesses in Guardian Advice’s systems and controls show that there was an ongoing risk that unsuitable advice could be provided by Guardian Advice and its authorised representatives,” ASIC Deputy Chairman Peter Kell said.

The ASIC-appointed expert will report regularly to the watchdog over the next two years, and ASIC says it may publish the results of the reports.

The move is the result of an investigation launched in 2013 after a number of former employees of AAA Financial Intelligence Limited and AAA Shares Pty Ltd — both of which had their AFS licenses cancelled by ASIC — joined the company.

Consumers are in a particularly vulnerable position when purchasing life insurance. Source: Getty Images

In a statement, Guardian Advice said it takes ASIC’s findings very seriously and would work “to ensure the necessary improvements are implemented by the business”.

“The life insurance and advice industries are undergoing widespread reform and GFP accepts that it is appropriate that there is greater scrutiny of these industries,” it said.

“GFP is confident it can seize this opportunity to improve our business, including improvements in adviser recruitment, training and adviser audit processes.”

The determination follows a review of the industry last year, which found what ASIC described as an “unacceptable level of failure” with more than one third (37 per cent) of advice received by consumers failing to comply with the laws relating to appropriate advice and prioritising the needs of the client.

David Leermakers, a senior policy officer at the Consumer Action Law Centre in Melbourne, said consumers were in a particularly vulnerable position when purchasing life insurance, and so had a right to expect advisers act in their best interests.

“When someone buys life insurance it’s an important decision, but it’s also very confusing. A lot of people don’t have the expertise or the time to do a good job themselves, so they put a lot of trust in advisers,” he said.

He added the entire remuneration model of the industry needed to be looked at with a view to banning upfront commission outright.

“We’ve said for some time we don’t think upfront commissions are appropriate,” he said. “Clearly we want advisers to be out there and to be able to make money, but they need to be paid in a way that encourages them to help consumers.”

Saw this article this morning. Certainly aligns with some of our observations.

5 BIG reasons to think South East Queensland in 2015

Your Investment Property Magazine Predicts Queensland to outperform all other States for Capital Growth in 2015 and there are a number reasons why.

Capital Growth

Much of the hype surrounding the Sydney market over the last 24 months has focused on the strong capital growth of Australia's largest city.  Whilst 2015 is still expected to be a good year for NSW, Queensland is tipped to out perform not just NSW but all other states for Capital Growth in 2015. 

Angie Zigomanis, BIS Shrapnel: Queensland prices haven't moved much for a long time, so it has become increasingly affordable.  We think Southeast Queensland, as well as Brisbane, could finally be on its way to becoming a property market powerhouse.

(Your Investment Property Magazine, January 2015)

Affordability

The median house price in QLD is now sitting at $480,000.  Compare this to NSW at $810,000 and VIC at $660,000.  Buyers in Qld have significantly more buying power and options available to them particularly at the $500,000 price point.  Not only can the typical investor actually get into the property market but they also have many more buying options available to them, particularly in the South East Queensland hotspots of Brisbane, Gold Coast, Logan, Ipswich, Toowoomba & the Sunshine Coast.

(source: Deloitte Access Economics & BIS Shrapnel)

Rental Yield

Largely, discussion of Sydney's outstanding 2014 centred on double digit capital growth in the chronically undersupplied western corridor and city fringe.   Less so was there a focus on the relative weak rental yields (3.0% on average) that investors can expect when buying in these locations.  Rental yields in Victoria (2.9%) also weakened as rental prices failed to keep pace with property prices in 2014.  The bright spot for some years now is Queensland where average rental prices have remained higher at 4.1% and looking at South East Queensland in isolation this figure is likely in excess of 4.8% or some 40% more than key Sydney or Melbourne locations.

Australia's prudential regulator APRA has already indicated that it "may institute further supervisory action" in relation to record low interest rates that could fuel a property boom.  This will mean even greater scrutiny on the serviceability of borrowers and an even greater emphasis on potential rental yields for investors.

(source: QBE Australian Housing Outlook 2014- 2017 & The Australian, Jan 5 2015)

Why constrain yourself to a $1 million apartment in Sydney returning $600 per week with similar capital growth potential as a 4 bedroom house in South East Queensland for $480,000 returning $500 per week?

Chinese Investment

Brisbane will be the next cab off the rank for Chinese Investment according to Greenland Australia Development director Kang Xue.   Headquartered in Shanghai Greenland has joined forces with James Packer's Crown Resorts in a multi billion dollar hotel, apartment and casino development in Brisbane's CBD. He says that Chinese investment into Australian will increase further this year, "Melbourne and Sydney have been paid attention for a long time and I think Brisbane will catch up."

Aussie Home Loans founder John Symond says Brisbane will also attract more investors from NSW and Victoria next year, "Investors are looking for better value than in Sydney and Melbourne and they will go into regional areas and cities like Brisbane to get a better yield."

(source: The Australian, January 3 2015)

Employment

The Queensland economy has continued to improve despite a slow down in the resources sector.  The pace of state Government cutbacks has slowed and there are also a considerable number of big, well spaced infrastructure projects in the pipeline.

Overall unemployment (5.3%) is less than both NSW (5.8%) and Victoria (6.0%).  The weak Australian dollar has already had a positive impact on exposed industries such as tourism and also retail which now represents $60 billion to the Queensland economy. 

Another interesting statistic is average weekly income.  Despite a considerable difference in the cost of living between QLD and the other Big States NSW and Victoria.  QLD's average weekly income is currently $1,116 slightly higher than Victoria ($1,096) and slightly less than NSW ($1,152).

(source: Deloitte Access Economics Business Outlook)

When buying an income producing property, the expenses which are associated with that are treated differently, depending upon what the expenses were and when they were incurred.

Where a building inspection is concerned, this is considered a 'capital cost' and not an expense. This means that you do not get an immediate tax deduction in the year it was incurred. Instead it is added to the cost base of property. If you sell that property then that cost will be netted against any capital gain reducing the amount of capital gains tax you must pay.

If you arrange an inspection on a property but did not proceed with the purchase then it will not be claimable at any time.

(Source: Property Observer)

Bill Evans, who has been cheekily dubbed the interest rate whisperer by the Daily Telegraph's business columnist Scott Rochfort, has issued a revised 2015 rates advisory.

"While we still expect rates to be on the rise in 2016 as the world economy gathers considerable momentum, we now expect the RBA to cut rates further in the early months of 2015 in an effort to bolster domestic demand and lower the AUD before evidence on the world economy becomes clearer around the middle of the year," he said.

"We now expect the RBA to cut rates by 25bps in February and again in March prior to another period of stability."

The surprise call came on late Thursday afternoon shortly after Deutsche Bank and Goldman Sachs made similar forecasts amid signs the slowing pace of economic growth in Australia.

(SOURCE: Property Observer)

Peter Martin, the economics editor of The Age, says the Reserve Bank of Australia is stirring.

He was confidently advised the Reserve Bank board is considering cutting its cash rate when it next meets on 3 February next year.

"A cut isn't completely locked in and a lot can change in two months," he told his readers adding most of the arguments line up in favour of a cut.

"One is that a cut would boost the economy without stoking damaging inflation.

"Another is that a cut would help bring down the dollar, which itself would boost the economy."

Martin maintains the "only cause for concern" was it might restoke an unsustainable real estate boom.

"The Bank has other measures in mind to deal with that including tougher lending standards for banks that lend to real estate investors," he advised.

(SOURCE: Terry Ryder - Property Observer)

There’s a pretty good argument that the hottest property precinct in Australia right now is South East Queensland.

Brisbane, the Gold Coast, the Sunshine Coast: Together they comprise a vast metropolitan area - ongoing urban growth means these three big centres have merged into one big conurbation which starts at the NSW border and extends 250 kilometers north to Noosa.

All three have hot markets. The research conducted by Hotspotting for the latest edition of the Price Predictor Index revealed 254 suburbs across South East Queensland with rising sales activity.

To put that in perspective, the Sydney metropolitan area has 106 growth suburbs. If you add in the Central Coast, which has caught the growth wave from the capital city, there are 120 growth markets.

This shows that, while Sydney is the nation’s hottest big market in terms of price growth, it’s starting to fade (though not markedly, as yet), while South East Queensland is starting to rise.

So when you see headlines suggesting that the boom is fading and price growth is starting to dissipate, remember that it’s Sydney they’re talking about. There are markets elsewhere in Australia that are really just starting their run.

They include Adelaide and Hobart, as well as numerous regional cities in Queensland, New South Wales, Victoria, South Australia and Western Australia.

But the headline event is the rise of South East Queensland. While there has been some price growth in 2014, to date it has been fairly moderate.

The big shift has been in sales volumes and that’s what I mean when I say there are 254 growth suburbs in the region – 254 suburbs throughout Brisbane, the Sunshine Coast and the Gold Coast with distinct patterns of rising sales activity.

The greatest price growth will come in 2015.

I remain hesitant about the Gold Coast. There’s no doubt that the oversupply that has dragged down this market for five years has now been absorbed – and that there is a significant real estate recovery under way.

The heartening thing is that most of the growth suburbs on the Gold Coast at the moment are what I would call genuine housing markets – inland suburbs where houses are being sold, rather than coastal locations where highrise apartments are flogged to investors and speculators.

Unfortunately, that will change. Now that the Gold Coast is back on a growth path, developers are flocking back, intent on creating the next oversupply. Driven more by ego and greed than common sense, developers are competing for the title of biggest project and tallest tower.

And, like their counterparts in Melbourne, it’s all designed for sale to Chinese investors. It won’t end well.

Beyond that cautionary note, the message about Brisbane and South East Queensland looks highly positive at the moment.

The opportunity for investors lies in understanding that the rise in sale volumes we have seen in 2014 is a forerunner to significant price growth.

South East Queensland has more momentum now than does Sydney, but it’s not yet reflected in price growth data.

That is yet to come.

Deutsche Bank economists have tipped the RBA will cut rates by half a percentage point in 2015.

The cuts would take the cash rate from current historic lows to 2%.

The Deutsche Bank economists previously forecast rates steady until at least mid-2016.

They forecast the first rate cut late in the June 2015 quarter and then again late in the September quarter, or early in the next quarter.

Higher unemployment prompted the Deutsche Bank forecast given they expect unemployment to peak at around 6.75% in 2015, up from 6.2% now, levels that would “ordinarily be consistent with interest rate reductions”.

“What has prevented us, until now, from actually forecasting rate cuts has been the strength in the housing market – in particular house price growth and the degree of investor activity,” the report said.

The recent “nascent signs” of easing in housing market price growth and prospect of regulatory measures to improve the quality of lending should ease the RBA's concerns, they added.

“As always, there are risks to any economist’s view,” they reported.

“In this case the key risks would appear to be a stronger labour market that we expect, or an absence of moderation in parts of the housing market. Obviously, a much weaker AUD could also, in the absence of further declines in the terms of trade, negate the need for rate cuts.”

The DB chief economist Adam Boyton believes the strength in the housing market that has been supporting the economy is easing.

"When we combine that with our expectations for the unemployment rate - which is that it will rise all the way through next year - all that suggests to us that there is scope for the RBA to cut rates further," he told ABC News.

But both the RBA and APRA will want to see more house price data before they are satisfied that house price growth has slowed to a more sustainable pace, Phil O’Donaghoe, at Deutsche Bank, told The Wall Street Journal.

(SOURCE: First Home Buyer)

The latest Finder Reserve Bank Survey, with 37 experts on the panel, has found that a rise in property prices is largely expected to occur next year.

Money Expert at Finder, Michelle Hutchison, said that this is bad news for first home buyers who are already struggling.

“If you’re a first home buyer struggling to get into the property market this year, next year isn’t looking to get any better,” she said.

Of those surveyed, 69% expect the price gains to continue.

“There were also 14% of respondents who expect property prices to stabilise, while 17% are betting on property prices to fall next year,” she said.

While it isn’t necessarily expected to improve, it may not worsen too much either.

“Most of the experts in the survey are expecting property prices to continue rising however, they don’t expect the higher costs will dramatically impact the first home buyer market,” she said.

The majority, 64%, expect the level of first home buyers active in the market to remain similar to this year, with one in five expecting fewer people will be able to enter market.

“With the national median property price across our capital cities hitting $545,000 in October – 8.9% higher than the previous year – it’s a good time to jump into the property market if you are prepared,” said Hutchison.

“But there’s no point in rushing in you’re not ready, because overstretching your budget could have serious consequences if interest rates rise next year.”

BIS Shrapnel’s Outlook for Residential Land, 2014 to 2019 report has forecast that Sydney’s upturn will continue but the big performers appear to be Queensland’s Brisbane, Gold Coast and Sunshine Coast. Perth is, however, expecting a downturn over the period.

Sydney’s sales rate in the outer suburbs is notable for being close to its early-2000s level, explains BIS Shrapnel’s senior manager and report author Angie Zigomanis. Despite the increase in sales there has been an extended downturn in Sydney’s land market resulting in a continued shortfall in new housing.

The markets in Brisbane, Gold Coast and the Sunshine Coast can be looked at more as a recovery after extended weakness, with new house and land packages looking affordable relative to established houses with minimal upwards movement for land prices.

Melbourne and Adelaide are forecast to see growth, at a moderate pace, over 2015 – even in the low interest rate environment – with healthy levels of new house building seen in both.

“Demand for land in both the Melbourne and Adelaide markets is showing some increase, underpinned by low interest rates,” said Zigomanis.

“In Melbourne, lot production bottomed out in 2013/14 after the land market was oversupplied due to new subdivisions coming online following the market peaking in 2009/10. As a result, the stock of completed lots had to be progressively sold down before the next round of development could occur,” he said, noting that any excess has now been absorbed by an uptick in land demand, rising prices and low interest rates with sell outs in estates and off the plan sales common.

“Adelaide experienced mild growth in lot production in 2013/14, with low interest rates and limited price growth improving affordability and encouraging greater demand for land. However, the upside is more limited, with slower population growth expected, resulting in milder growth in demand for new dwellings in general. The market is also being impacted by the removal of the Housing Construction Grant at the end of 2013,” he said.

Brisbane – Entered early stages of recovery

Early recovery phase entered in 2013/2014, as lot production rises from 4,700 lots in 2012/2013 to 6,000 lots, though it remains below 8,900 lots per annum produced in the 10 years to 2011/2012.

“The improvement in lot production in 2013/14 was underpinned by the emergence of pent up demand for new houses after the sustained period of low new dwelling activity following the GFC,” said Zigomanis.

“Cuts to interest rates have improved the affordability equation for Brisbane home buyers, while weak land prices over the last five years have also made new housing more attractive.”

Key driver: Net interstate migration expected to pick up with strong price growth in southern states to encourage some to look to Queensland. Deficiency of dwellings to remain.

Lot production forecast to continue to rise and peak at 9,000 lots per annum by 2015/2016. Lot sizes have failed to maintain affordability, but are larger on average than other capitals.