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Person reading receipt for tax time

It’s that time of the year, tax time!

“It’s that time of year! What do I need to think of before the 30th of June rolls around again?”

If you use a tax agent for your annual tax return, you will have provided your information to your accountant and your tax return is probably ready to submit to the Tax Office, for last year’s tax.

What is different for me this year?

Many of us worked from home during the year due to COVID-19, this can mean a small tax deduction. If you worked out of your own home from mid-March to 30 June 2020, you can claim a deduction of $0.80 for every hour out of your home office. The accountant can work it out for you, but it’s as simple as letting them know the date you began working from home and your usual weekly hours worked. Assuming you worked 15 weeks at home at 40 hours/week, this could mean a tax deduction of about $480.

What about Division 293 tax? If you are a high-income earner (>$250K/year) you may have to pay additional tax on super contributions. Check your MyGov account to make sure you don’t miss seeing the notification from the ATO. You do need to pay the tax, but you don’t need any penalty on top for late payment.

How can a high-income earner get a tax break? If your spouse is younger than 75 and their income is less than $37,000, you can make a contribution to your spouse’s super account and receive a tax offset that will reduce your tax. The maximum offset is $540 and the optimum contribution amount to receive this offset is $3,000.

“I have surplus income, and I pay tax at the top marginal tax rate. How can I reduce my tax?” Talk to your pay office about setting up a salary sacrifice arrangement. This arrangement can save you some tax, and boost your future retirement benefits – that’s a win/win solution.

There is a cap in place that limits how much you can contribute to super on a pre-tax basis and this is made up of the employer contributions and any contribution you make, such as salary sacrifice. It’s important not to exceed this cap. The cap for 2020/21 is $25,000. You can also contribute a lump sum amount if you have made some savings during the year, and then claim a tax deduction against that amount, again it’s important you don’t exceed the cap.

“I sold some shares during the year at a profit and now I’m going to have to pay tax on the capital gain, can I do anything to reduce or eliminate this tax?” Yes, if you have spare capacity under the concessional contributions cap mentioned above, you can contribute part of the proceeds to superannuation and claim a tax deduction, again providing you don’t contribute more than the cap.

“During the year I sold the family home where we had lived for 20 years, but now I can’t put it into my superannuation.” Well, yes, under certain circumstances you can put it into super if you meet all the downsizer contribution rules, one of which is that you are 65 years of age or older. You don’t have to meet the work test and any downsizer contribution sits outside normal contribution caps.

Don’t forget that you can speak to one of our friendly financial advisers for information and assistance with your tax. Call us today!

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Two people shaking hands

The value of trust

Melissa Caddick was a Sydney based fraudster who went missing late last year. Her foot, still secure within her sports shoe, recently washed up on a beach.

Melissa held herself out to be a financial planner, and over several years, weaved an elaborate web of deceit designed to entrap friends and family into investing through her. However, Melissa’s only ‘investment’ was in herself, using investor funds to establish and maintain a lavish lifestyle.

In carrying out her charade she assumed the identity of another, genuine, financial adviser. And it was only when this financial adviser reported the misuse of her identity to the Australian Securities and Investment Commission (ASIC) that the charade finally unravelled.

Melissa was very successful in duping many people out of a lot of money over an extended period of time. How is that possible? A simple check on the ASIC website would have exposed her, but no-one bothered to check. They trusted her, they wanted to believe, and if truth be told, they were greedy to participate in the ‘fabulous returns’ that Melissa seemed to be able to achieve for her investors.

Trust is a very fragile ‘creature’. Once it’s been lost, it’s almost impossible to restore. It’s a fundamental aspect of a relationship that you’d have with a real financial adviser. I’ll often say to a prospective new client, “I’d like to earn your trust”. What I mean by this is that I don’t assume that someone is going to trust me simply because I’ve asked them to. I wouldn’t! I expect to be able to demonstrate through my actions that their trust has been earnt by way of me aiming to deliver tangible and verifiable results. Sometimes this means telling clients things that they’d rather not hear; this investment didn’t perform as we would have liked, but these did; you don’t have enough capital to retire, your fees will need to increase. However, these are all examples of being transparent and correctly managing people’s expectations which is an integral part of trust.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Man turning out pockets to find no money

Good Debt, Bad Debt, Smart Debt

Debt. In a time where the Reserve Bank cash rate and similarly the interest rates for borrowing are the lowest we have seen, it has become a temptation for us as consumers to borrow.

So, what exactly is debt? Debt is the obligation for one party (debtor) to pay money to another (creditor). We almost all certainly have had a debt, and it remains one of the most common financial goals of clients to repay debt and be debt-free.

A case can easily be made that there is no such thing as good debt and that to owe money is always bad, but this does not have to be true.

Let’s break debt up into 3 areas. Good, bad and smart

Good

Often when it comes to a big-ticket item, debt may be the only option as a means of raising funds to purchase the good. The main item here is your home. A home can be seen as a key item that can be funded through rent or home ownership. The idea of rent being ‘dead money’ which could be used towards a home purchase through debt repayment, leads many consumers to the decision to borrow for their own home, and why not when the government also provides incentives for first home buyers. Another benefit is that under most circumstances, the primary residence is also capital gains exempt.

Knowledge is a powerful resource and with it can often come greater opportunity to build wealth through employment. Borrowing for study can be very beneficial to help get that new job or to ask for a pay rise. Care must be taken to ensure, when selecting a course of study, that the future benefit will be there. The Higher Education Loan Program (HELP) is a government support loan that may help fund further education.

The last item I will cover as ‘good debt’ is one to borrow for a small business. Being your own boss, earning a salary and controlling your employment are all very positive features. There is a greater risk with this loan given the history of failures of small businesses. Much of the business success will depend on your willingness to work hard to build and maintain the business, determining from the outset that the business will be profitable and be able to repay the debt, and gaining an understanding of the type of business and how to manage a business prior to commencing.

Bad

‘Bad debt’ involves the borrowing of money to purchase a depreciating asset often through a personal loan. We all know this one and are guilty of discretionary spending on items in this category. Loans of this type are typically at higher interest rates, only increasing the reason for defining them as ‘bad’.

Our most common item for ‘bad debt’ is the family car. It is often seen as a ‘good debt’ for the reason of the functionality it provides, but the reality is that in most cases, the value of a car depreciates (in cases of new cars by up to ~$5000 upon leaving the showroom). By the time of debt repayment, the vehicle is often worth less than 50% of the value initially paid. Boats, motorbikes and jet skis are all similar examples of ‘bad debt’ loans.

Credit card and ‘Buy Now Pay Later’ debt is by far the biggest issue of ‘bad debt’ for most Australian households. Our penchant for spending on consumables, goods and services ensure that many of us require these credit options. Whilst an increase in the use of debit cards (spending money you already have) has reduced credit card use; through COVID-19, with reductions on the use of cash and an increase in online purchases, we have seen this type of debt continue to increase. For more information on credit cards, refer to the article in The Investment Collective’s Winter 2020 Newsletter by Cheng Qian. Our ever-increasing desire for discretionary spending on clothing, music, holidays, take away meals and even that morning coffee can all contribute to bad debt.

Smart

The last category is smart debt. Often referred to as an investment debt or gearing. This debt involves borrowing money (at a low rate) to invest in a product that will hopefully have a higher rate of return to generate wealth in a faster manner. There is an obvious risk with this debt and that is the need to generate a return with a higher rate than that being paid, otherwise, there is financial loss. That is, whilst it can magnify a gain, it can also magnify a loss. This type of borrowing can provide an income tax deduction and enable a larger portfolio to provide greater diversification in your portfolio to reduce risk. Gearing should only be considered after discussions with your financial adviser to see if it is a suitable option for you and your financial circumstances and goals.

In summary, commencing debt can be very tempting and even seen as a need, and at the right time and for the right reason, can easily be a justified option rather than saving the amount in full prior to purchase. Debt will always need to be repaid and when looking at commencing a significant debt, always take the time to discuss the situation with your financial adviser to see how it fits with your financial situation, goals and objectives. A well-managed approach to debt can ensure that no matter what category of debt (good, bad or smart) that it delivers for you.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Bitcoin is a volatile investment

The Crypto Craze

2020 was a rollercoaster ride for investors, as we experienced the most volatile stock market in decades. However, the 30-40% dip experienced by ASX investors in a mere matter of weeks is nothing in comparison to cryptocurrency investors and Bitcoin fanatics who can experience this on a daily basis. Bitcoin has been all over the news recently as it has surpassed the psychologically important level of US$50,000 per coin on the back of Tesla’s $1.5 billion investment. This leaves the question, what exactly is a Bitcoin and can we view it as a valid investment?

What is Bitcoin

Attempting an analogy to explain Bitcoin is no easy task as there is nothing quite like it. Even the best comparisons out there will be imperfect.

Bitcoin is a virtual currency created in 2009 as an alternative to government issued ‘medium of exchange’, which most of us know as physical money. It is designed to hold a similar function as a ‘store of value’ with the closest comparison being gold, this is why many refer to Bitcoin as ‘Digital Gold’. The major difference between Bitcoin, gold and cash is that you cannot hold onto a Bitcoin and you definitely cannot fashion it into a piece of jewellery, it only exists on an electric file. Transactions for Bitcoins are recorded and distributed via a decentralised ledger, which removes the need for government control in the regulation of money supply, and hence Bitcoin is referenced as ‘Decentralised Money.’

Is Bitcoin money?

There are generally three functions of money:

  • Money is a store of value: Consider it as a means of saving and allocation of capital. The issue with physical money is that inflation will erode the associated purchasing power over time.
  • Money is a unit of account: This allows it to measure value in transactions and facilitates a means of exchange. All financial terms around profits, losses, income, expenses, debt and wealth can be measured against money.
  • Money as a means of exchange: Put simply, you can buy things with it and it will be accepted almost anywhere and everywhere. Grocery shopping, buying a home or even lending services are all applicable with a universal understanding and acceptance of money.

Bitcoin has been surging in popularity; however, it is nowhere near being universally accepted as a unit of account or a means of payment. In light of recent events, some countries have even gone so far as to ban it entirely. Quoting billionaire Mark Cuban “Bitcoin would have to be so easy to use it’s a no-brainer. It would have to be completely friction-free and understandable by everybody first. So easy, in fact, that grandma could do it.”

Is Bitcoin like gold?

The common theme around Bitcoin and gold is that they are both speculative in terms of their valuations and are both viewed as a hedge to conventional monies such as the USD. The main reason Bitcoin is more closely aligned to gold as opposed to shares is that cash flow, revenue, earnings, interest payments or dividends do not determine the prices of these instruments. They are only worth as much as people are willing to pay for them as an alternative asset and as a ‘store of value’.

Bitcoin specifics

  • Bitcoin is a cryptocurrency; however, it is only one of the many thousands of cryptocurrencies available on the digital market.
  • A cryptocurrency is held electronically and can be used to buy goods and services online.
  • Cryptocurrencies are powered by Blockchain, which is a decentralised technology that manages and records transactions spread across many computers.
  • Bitcoin is not dependant on central banks or governments in control of the money supply. It also does not flow through the traditional banking system.

To put it simply, regular people like you and I can contribute to the record-keeping of Bitcoin transactions via our private computers, however in reality, it is not that simple. The key takeaway is that Bitcoin is decentralised which removes the need for central banks (such as the Reserve Bank of Australia) and retail banks (such as our Big 4, CBA, WBC, ANZ & NAB). For those with little faith in government regulation and a heavy distrust in our banking system, this is Bitcoins greatest appeal yet this same definition around unregulated monies is also why so many stay far away from the digital asset.

In summary, we are not able to conclude whether Bitcoin can be viewed as a valid investment. It is somewhat similar to money, somewhat similar to gold and the price volatility of late bears similarity to an extremely volatile stock market. What we can agree on is that the digital asset cannot be ignored, with over $1.5 Trillion in cryptocurrency assets, it will be interesting to see if Bitcoin is still around at the end of the decade.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. Bitcoin is not on The Investment Collective’s Approved Products List and will not form part of any client portfolios. If you would like more tailored advice, please contact us today.

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Are you eligible for the Concessional Catch-up Rule?

The Concessional Catch-up Rule

The ‘Concessional Catch-up Rule’ (catch-up rule) was introduced by the government a couple of years ago and provides individuals with superannuation balances less than $500,000 greater flexibility when making concessional contributions. From 1 July 2018, individuals have been able to accumulate unused concessional caps and utilise the difference in future financial years.

Concessional contributions are a valuable retirement planning tool that can enable Australian’s to build a retirement nest egg whilst also receiving valuable tax concessions in the process.

Why make concessional contributions?

Concessional contributions are a great way to reduce tax, as these contributions are those which are either sourced from pre-tax monies (before tax is paid at your marginal tax rate (MTR)), or voluntary contributions for which you intend to make a tax deduction claim. In both situations, the result is that rather than being taxed at your MTR, which could be up to 47% including Medicare levy, you are instead taxed at either 15% or 30% for high income earners. This means that so long as your MTR is lower than the applicable superannuation tax rate, there is a tax benefit to be had.

The introduction of the catch-up rule is great news for those with low superannuation balances with plans to boost their savings in preparation for retirement. However, there is also room for creativity in its use, where strategies can be devised to assist in the minimisation of large tax bills in future years.

In order to be eligible to utilise the Concessional Catch-up Rule, you must satisfy the following criteria

  • Be eligible to make concessional contributions: it is a requirement that you be eligible to contribute to superannuation in order to utilize this rule.
  • Have a Total Super Balance (TSB) of less than $500,000 at the end of the preceding financial year: in order to be eligible, you must have a TSB less than $500,000 as of 30 June of the previous financial year. Your TSB is the total sum of all funds held within the superannuation environment and includes those held in accumulation, pension, defined benefit and those funds in transit due to a rollover between funds.
  • Have unused concessional caps from the past 5 financial years: it is unlikely for anyone to meet this criterion at this moment, as due to the recent nature of this legislation you have only been able to accumulate unused caps from 1 July 2018 onwards. This means that at the time of writing, only 2 financial years are readily available to be brought forward.

The following table illustrates how the accumulation of unused caps can play out going into the future:

Comparison Table

Tax planning strategies utilising the catch-up rule

The introduction of the carry forward rule has opened the doors to some creative tax planning strategies, as eligible individuals can take advantage of unused concessional caps to reduce tax payable. We can see this being exceptionally valuable going forward for those with an investment property, business asset sale or share portfolio with a large unrealised capital gain tax (CGT) liability. Essentially, if an investor knows that they will generate a large capital gain and consequently incur a large tax bill, the catch-up rule could be used to their advantage.

If you would like to discuss how this could be applicable to you or if you are interested in discussing your broader financial goals & objectives, please contact one of our advisers for a no obligation discussion.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Everyone should have a financial plan

Why you need a financial plan

Everyone needs a financial plan and everyone should make a plan that suits their particular circumstances.

You can make your own financial plan that will set you on the path to good financial health. The first, and possibly the most important part is goal setting.

We’ve talked about goals here before, so it’s important to remember to set SMART (specific, measurable, achievable, realistic and time-based) goals. You will need to think about what you want in the short-term, which might be anywhere from now through to 3-4 years, the medium-term which could be from 5-8 years and then long-term goals that look well into the future.

An example of a short-term goal is to finance a new car in 2 years’ time, a medium-term goal might be to save enough for a deposit on a house within 5 years and a long-term goal could be that you don’t want to rely on social security payments when you retire.

It does not matter whether the goal is a short-term or a long-term one, the means to achieving every one of those goals is the same!

You must first look at your income and expenses. Make a budget, this is a pretty simple thing to do these days with a proliferation of budgeting and cashflow apps available, the MoneySmart website is always a good place to begin.

Now you have made your budget and identified that you have some surplus income that you can direct towards saving for your goals, but the critical thing then is to stick to it! You must be very disciplined in ensuring that the identified savings part of your salary goes into your savings and stays there. It’s worth checking with your pay office to see if they will pay your salary into 2 different accounts, but if not, then you must make the transfer as soon as your pay comes in or set up a regular direct debit to occur at that time.  You must also avoid drawing from that account until you are ready to buy the object for which you have been saving.

Unfortunately, in the current economic climate you aren’t going to get much help in growing your savings account via interest payments. This means that you will need to shop around to find an account that pays at least some interest, and as your savings grow, you may be able to use term deposits or other high interest savings accounts for a larger balance.

This will matter to you less when you’re saving for a short-term goal than it will if you are looking at long-term savings. If your goals are long-term, the best course of action is to contact a financial adviser to assist, as you will need their expertise to advise you in relation to how to invest your funds and where to invest them.

Don’t hesitate to call one of our friendly advisers to assist you with your financial progress.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Retirement presents a number of new challenges as well as uncertainty for many Australians.

Planning for your retirement

Retirement presents a number of new challenges as well as uncertainty for many Australians. The current economic volatility and low return on cash savings are increasing drivers for Australians seeking advice. It is important to obtain appropriate and tailored advice as it will help retirees navigate the change from saving for retirement to relying on your savings during retirement.

The danger of running out of money is the second biggest worry for retirees, with 53% of Australians concerned about outliving their savings. (National Seniors Australia 2020[i])

There are many ways we can provide value when planning for retirement:

  • Reviewing your historical spending to determine likely spending habits during retirement to know how much you need to support your lifestyle.
  • How to structure your savings to minimise or even eliminate tax.
  • Review your risk tolerance and understanding of the risk-return relationship.
  • Assist eligible retirees to access Centrelink benefits to supplement income and extend retirement asset longevity.
  • Ongoing review service to ensure you remain on track and are coping outside of employment.

The COVID-19 global pandemic is the current driver of volatility and low interest rates. The need to maintain a long-term investment strategy and avoid instinctively making emotional decisions is imperative to ensure that your retirement savings continue working for you.

Understanding your needs and objectives allows us to provide tailored and relevant strategies to support effective decision-making and a long-term plan that guides you through a stress-free retirement.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

[i] https://nationalseniors.com.au/uploads/0120203573PAR-RetirementIncomeWorry-ChallengerRpt-FNREV.pdf

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Before seeking financial advice it is important to think about your goals.

The importance of having goals

It’s a common occurrence as a financial adviser when someone asks me what I do for a living, and when I tell them, the reply is “oh, I need to see one of those”. I like to ask what they are wanting to see an adviser about. Inevitably it is to build wealth, but often they haven’t explored what they want the wealth for.

A key step when engaging with a financial adviser is having an understanding of your present circumstances, and having ideas, maybe not definitive, of goals you want to achieve. Sounds easy?

Not everyone knows what they want to do, achieve or what might even be possible.  Depending on the stage of your life, your goals could range from buying a house, travel, retirement, debt reduction, or even estate planning and the priorities for each goal will continue to change over time. This is where your financial adviser can assist to work through your goals and objectives with you, establish a financial plan suited to your needs and help you on the way to success.

Sometimes we have a goal, but can’t define it. When setting goals, we need to think S.M.A.R.T.

Is the goal;

  • specific,
  • measurable,
  • achievable,
  • relevant to you; and,
  • has a timeframe been set?

Having a S.M.A.R.T goal is shown to improve a client’s focus, whether it be saving money to travel around Australia next year, to paying debt off by retirement, knowing the ‘end game’ and what is important to you is essential.

A couple more ideas when setting your goals;

  • “Don’t be afraid to dream” – not everything will always be possible, but if you don’t aspire to a goal, then chances are you won’t make it.
  • In setting personal goals there is no right answer except the one that works for you.
  • “Share your goals” – discuss with your partner and family what you want to achieve. Working together on a family goal like saving for a pool at home is a great activity and can show the kids the value of budgeting.

Finally, everyone must have goals, dreams and ambitions. Even if you don’t know what you might want, discuss your ideas with your adviser who will be more than happy to assist you.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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The dreams of retirees are changing due to the COVID-19 pandemic

11 key findings on retirees dreams during the pandemic

Much like how the Global Financial Crisis hit the economic wellbeing of many retirees so has COVID-19, with confidence in the quality of life in retirement and how long money will last being shaken.  Returns on cash and term deposits are negligible and that doesn’t look like changing anytime soon, which augurs well for growth assets given interest rates appear to be ‘lower for longer’.

Allianz Retire+ conducted some research during the pandemic some months ago and they received over 1,000 respondents from current and prospective retirees.  Here are some key findings.

1. Money is a recurring worry for retirees

24% of the respondents said they worried about making ends meet whilst 20% indicated money was a constant worry.

2. Spending even less on necessities, luxuries

75% of retirees said they were spending less on luxuries due to COVID-19. 68% of respondents said they were only buying necessities.

3. Many retirees did not feel financially secure

51% of those surveyed did not feel secure in their financial position.

4. Wealth destruction

36% of respondents said they had lost money during the COVID-19 market downturn. 13% believed they had experienced financial losses that would not be recovered during their retirement.

5. Vulnerable to another financial shock

61% did not believe their financial situation was safe in the event of another economic downturn.

6. Lack of control

45% did not feel in control of their financial future. Heightened market volatility was making many retirees feel they were at the mercy of global financial markets and unable to control their financial future.

7. Quality of life worries

34% of retirees worried about whether their finances would allow them to have a good quality of life.

8. Illness, market uncertainty top concerns

Top five concerns were:

  • becoming ill (55%)
  • unexpected costs (45%)
  • losing a loved one (44%)
  • not having enough money to live the life they wanted to live in retirement (34%)
  • the risk of one-off market downturns (32%)

9. More conservative approach

62% of surveyed retirees said they were taking a more conservative approach to their retirement because of COVID-19. Given that many retirees already live conservatively, the finding added to the broader survey theme of retirees cutting back further and taking fewer financial risks during the pandemic.

10. Retirement expectations being downgraded

23% of retirees now had more negative expectations of their retirement due to COVID-19.

11. Wary of financial advice

23% of respondents sought financial advice, even though they were feeling less financially secure. Allianz Retire+ research consistently finds that retirees who used professional investment advice felt more confident in their financial position.

Some confidence has returned to markets over the last 5-6 weeks as vaccine rollouts appear to be close to happening.  The U.S election result has also calmed investors some. It would be interesting to view the results of the survey if it were conducted today.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Piggy Bank

RBA cuts rates to record low

Philip Lowe, Governor of the Reserve Bank of Australia (RBA) announced a further cut to the cash rate down to 0.1% on 3 November 2020. This is a 0.15% reduction from 0.25%, which was held since March 2020. This is broadly in line with market expectations and brings Australia’s official interest rate in line with rates in comparable countries (which is around zero). For investors, it means lower rates for longer, with a rate hike unlikely in the coming years.

What is driving the latest easing?

Put simply, the RBA’s economic forecasts show that it does not expect to meet its inflation and employment objectives over the next 2 years and sees the recovery as being bumpy and drawn out. The RBA has been undershooting its 2-3% inflation objective for the last 5 years now.

Will the banks pass on the RBA rate cuts?

Passing all of the 0.15% cut will bring some downward pressure on bank profit margins as a significant chunk of deposits are already at or near zero rates. However, I believe the banks will pass most of it on as they will be under pressure from the RBA and the government who have been providing them with a lot of support (including cheap funding which is now 0.15% cheaper). If they do not, they will face public backlash.

Implications for investors?

There are a number of implications for investors from the latest easing by the RBA.

First, ultra-low interest rates will likely be with us for several more years, keeping bank deposit rates unattractive, so it is important for investors in bank deposits to assess alternative options.

Second, the low interest rate environment means the chase for yield is likely to continue supporting assets offering relatively high sustainable yields. This is likely to include Australian shares where despite sharp cuts to dividends, the grossed-up for franking credit dividend yield on shares remains far superior to the lower yield on bank term deposits. Investors need to consider what is most important; getting a decent income flow from their investment or absolute stability in the capital value of that investment. Of course, the equation will turn less favourable if economic activity deteriorates again.

Third, the ongoing decline in mortgage rates along with easing lending standards will help boost house prices, but bear in mind that high unemployment and a hit to immigration will likely impact throughout the year ahead. The housing outlook also varies dramatically between cities given the rising demand for outer suburban and regional houses over inner city units.

Finally, lower rates and increased quantitative easing will help keep the Australian Dollar lower than otherwise, but it is still likely to rise over the year ahead if global recovery continues and this pushes up commodity prices.

If you are not satisfied with the interest rates on your savings or require assistance in reducing the interest rates on your mortgage, please speak to your financial adviser or a mortgage broker.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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2020