September 09 BPS
Underpants are up.
Another sign that there are too many economists in the world is this story. A new indicator of economic health is the sale of men’s underwear. When times are tough men are happy to stay in their daggy old daks and then buy new ones is the first sign of things looking bright again. I am pleased to report that underpants sales are up.
The “Big Mac Index” developed by the UK Economist best represents the fad for funky formulas. This measures the cost of a Big Mac around the world. Since ingredients and labour are supposed to be the same globally they should have price parity once the currency is exchanged. But no, not true! Switzerland has the dearest Big Mac and Balkan countries the cheapest. Australia has also consistently scored low on the index and is another indicator that the Aussie $ is consistently undervalued. I am not alone in predicting the AUD will be over 90 US cents before long.
Mayhem in Mullum
I loved the front page of last weeks Echo. Must have been a slow news week. The picture of a dozen kids and a few adults at the gate of the Tuckeroo Ridge Estate development in Mullumbimby is a pretty lacklustre display of opposition to the development. Demand for affordable housing in Mullum is a lot more ‘intense’ than the ‘intense’ development of 600 sq m minimum lot sizes.
The demand for affordable housing along Left Bank Road so that families can send their kids to the popular Shearwater Steiner School is also intense. Most recent urban planning research encourages smaller lot sizes not larger and 600 sq m is plenty big enough for a kid to kick a ball around. Any ‘greenie’ or people wanting to limit urban sprawl should be encouraging smaller lot sizes not larger. The Echo needs to do just a little research on the pros and cons of a story before printing a front page promotion of a knee jerk reaction by a small minority on something that has been years in planning and already passed a rigorous DA process.
Fascinating facts about banks, duty and taxes
Stamp duty discount
I am surprised by how few people are aware of the discount being offered on stamp duty on houses under $600,000. If you are thinking of an investment property, moving or downsizing you get a 50% discount or maximum of $11,245. Offer lasts till December 31 and is NSW only.
CGT on Luxury Homes
Also finishing in December is Treasury’s Taxation revue and will be interesting to watch the recommendation that will probably include a Capital Gains Tax on all properties over $2M. Although this may effect my business as many of my clients are in this bracket I do see it as fair as long as it is accompanied by slashing of other property taxes like stamp duty.
Bastard Banks
As predicted in previous newsletters the major banks have now consolidated their market share to 92% of the mortgage market. Getting close to a near monopoly and watch out free market competition when rates start to rise.
Some are now predicting the RBA will either lift interest rates later this year or early next year. For those thinking of fixing their rate it may be too late to make it a winner financially. 3 year fixed rates are now mainly around 7% and 5 yr fixed are generally higher than 7.5%. That means there will need to be at least four .25 rate hikes in quick succession to make it work. Coming into an election year, I don’t see it happening.
Property Round Up:
Just some of the interesting options I have seen around the traps on my travels. If you have something you would like to know about, give me a call.
Brunswick Heads
I have been saying for sometime you don’t get any change from $600K in Brunswick Heads. There are currently two properties in Bruns under $600 and something tells me they are the last.
Byron Arts and Industrial Estate
The Byron Ind Estate has only a few vacant blocks yet to be built on. It will be full soon and the existing units will quickly rise in value. Only a few are advertised and I know of one good value at $375K for over 200 M2.
Ballina Houses
Ballina is continuing its stella performance in price growth. A couple of listings and a couple in an auction are soon to be under the hammer.
Lismore Flats
Worth mentioning when it comes up – positive cash flow property!!!! Block of two flats in Lismore for under $300K and brings in $410 a week.