State Of The Nation Compiled By Kevin Lee of Smart Property Adviser

www.smartpropertyadviser.com.au E: kevin@smartpropertyadviser.com.au T: (02) 9980 1311 M: 0416 083 995

Disclaimer: This document is a compilation of recent articles published in the media. The media sources are quoted beneath their respective article capture. Smart Property Adviser does not claim to be the author of any articles included within this document.

New Season Put A Spring In Perth’s Property Market Despite Shortfall

Perth's property market is running low on homes to sell as it heads into the traditionally busy spring period, putting price rises on the horizon. Warmer weather and the end of the football season has historically seen a flurry of people wanting to sell or buy property and after three years of a sluggish market Perth real estate agents are predicting this will be the best spring for some time. 4 September 2012. Click here to read more. Potential For Property Through Super How big, you ask? Try $439 billion, which is how much money Aussies have sitting in their self-managed superannuation funds. Quest Serviced Apartments manages properties in three countries and says more than 60 per cent of its purchasers are buying through SMSFs. The Self-Managed Superannuation Professionals Association of Australia (SPAA) says there has been a lot of talk about property in super since rules changed five years ago to allow SMSFs to borrow money to buy assets, while Australian Taxation Office figures show the use of residential real estate in SMSFs has grown 40 per cent in four years to about $15 billion. 4 September 2012. Click here to read more. How Property Investors Can Profit From Our Changing Demoghraphics In order to create long-term wealth from property it will be important to own the type of property that will be in continuous, strong demand from both owner-occupiers and tenants in the future. That's why recent population statistics from the Australian Bureau of Statistics are instructive to property investors. To understand what's going on let's do a quick Q&A. How fast are we growing? Over the year to June 2011, the country's population is estimated to have increased by 1.4%, which is faster than almost every other developed nation. However, population growth has been stronger across the capital city markets (1.6%) than in regional areas (1.2%). Where do we live? 31 August 2012. Click here to read more.

House Prices Flat In August, But Capitals Improve During Most Recent Quarter Home owners and investors should prepare themselves for more disappointment, after new figures show values remained flat in August despite having increased in both June and July. However, there is some hope. The new RP Data-Rismark figures show values have risen by 1.6% over the last three months, and seven out of eight capital cities have recorded gains. There are also some improvements to be seen – in the year to date values have declined just 0.6%, compared to the 2.2% decline recorded in May. During the quarter, Darwin has recorded the highest increase at 5.2%, followed by Canberra at 2.8%, Melbourne at 2.5%, Sydney at 2.4%, Hobart at 1% and Brisbane at 0.6%. 3 September 2012. Click here to read more. Big Cities Still Present Big Opportunities For Smart Property Buyers

The most recent data on median home values shows that there are still affordable housing options across our most expensive capital

city markets. Housing affordability has been one of the most significant barriers to entry into home ownership across the country, particularly for first time buyers. The relatively high cost of housing within the major regions of the country means that some have abandoned hopes of ever owning a home. Although housing can be expensive in the most populous areas of the cities, the data shows that there are opportunities in most regions to enter into the housing market at relatively affordable prices; you just need to know where to look. 3 September 2012. Click here to read more. Dwelling Approvals Record A 17.3% Drop In July: ABS While the monthly fall was spectacular and larger than the median consensus forecast of a 5% decline, Westpac suggested it was not outside the realm of expectations, with several forecasters anticipating a double-digit decline. For the record, Westpac was forecasting a 10% drop. "The main reason for the downbeat expectations was the surge in approvals in May (+27.8%) that was largely sustained into June (–1% mth) and led by the extremely volatile units segment which includes high rise developments that can see very lumpy moves due the size of projects," Westpac suggested. 31 August 2012. Click here to read more.

Issue # 005 September 7, 2012

State Of The Nation Continued…

E: kevin@smartpropertyadviser.com.au T: (02) 9980 1311 M: 0416 083 995 Disclaimer: This document is a compilation of recent articles published in the media. The media sources are quoted beneath their respective article

capture. Smart Property Adviser does not claim to be the author of any articles included within this document.

Why Rents Will Continue To Rise It is by now quite clear that at some point over the past five years there was a shift towards renting rather than owner occupation. The Australian Bureau of Statistics’ (ABS’s) 2011 Census revealed that 29.6 per cent of residential dwelling occupiers where tenants. That was higher than the 27.2 per cent in 2006 and also higher than

the 26.3 per cent in 2001. September 2012. Click here to read more. Massive Loss Plunges Property Developer Metroland Into Administration As Values Continue To Fall Listed real estate developer Metroland Australia appointed an administrator last Friday, just days after delivering a disastrous financial report in which its full year loss multiplied by nearly 900%. The business warned its retail property values had been declining and that it was continuing to negotiate with financiers. It has been heavily exposed to the retail space, where poor performances among SMEs have led to declining values. It is yet another sign of strain in the construction and property sectors, which have been suffering under falling values since the financial crisis. 3 September 2012. Click here to read more. Mount Isa And Mudgee Rents Rocket 25% Over Past Year: 15 Double Digit Rental Growth Locations The remote Queensland mining town of Mount Isa and the agriculturally rich NSW country town of Mudgee have both managed rental growth of around 25% over the past year, according to July figures from Residex. Mount Isa is 1,800 kilometres north west of Brisbane and adjacent to mining giant Xstrata’s underground copper and zinc mining activities. 3 September 2012. Click here to read more. Invest In Property But Aim Well

House prices may have defied the doomsayers' predictions of a crash but no one expects bricks and mortar to deliver easy capital gains during the next several years. The principal of Smart Property Adviser, Kevin Lee, favours a strategy of

buying cheaper units that produce better yields than more expensive units close to the city. ''You have the University of Western Sydney, Nepean Hospital and the major shopping centre of Penrith itself, '' Lee says. 25 February 2012. Click here to read more.

Controversy Corner What We Learned From The ATO About Property And Hybrid Trusts According to Ed Chan, founding partner of Chan and Naylor accountants and a leading property tax specialist that: “over the last three years of negotiating with the ATO to achieve an ATO-approved product ruling for our Property Investor Trust (PIT) we have learned a few things that we thought was interesting to share.” Firstly some background information: The use of privately held trusts in Australia has had a long history dating back many decades. 28 August 2012. Click here to read more. In last week’s issue, we included the above article. However, we’ve received an interesting rebuttal to the story. Brett, (a professional chartered accountant with a law degree) shared his opinion. Brett writes; “The Chan article says "A tax determination is not law, and it’s simply the judges’ view". This is incorrect and could be quite misleading. It is NOT a judge’s view, it’s the Commissioner of Taxation view (or his senior people) of the Law and as the Chan article does correctly assert (without saying it) earlier in the piece the ATO terrorises people into submission by issuing rulings that, basically, are a misstatement of the Law. The ATO would say it is "the ATO's considered view". That is, "We [the ATO] have worked a way out to further make it harder for people to make claims." and you need to have deeeep pockets to fight us. (That is be as rich as Twiggy). A further indictment of our tax system.” If you would like to share your opinion on any article included in the State Of The Nation Newsletters, please send it to us and we will broadcast it in a future issue. Send your opinion to kevin@smartpropertyadviser.com.au

Some Parting Advice

“NEGATIVE GEARING is actually better defined as ‘supporting

your tenant’s lifestyle’ because that’s exactly what you’re doing. Your cash is flowing – out – every month to cover the costs of a property that your tenant lives in while you wait for the God of

Capital Growth to visit upon you.”

Until Next Time…. Kevin Lee

www.smartpropertyadviser.com.au