Global stock market gyrations have silver lining for Australian property market

By Paul Bennion, Managing Director, DEPPRO

The finance sector in Australia has been spooked by the gyrations in international stock market over the past few weeks.

There has been a growing consensus by economists that a major correction is now due because of the soaring price of stocks during the past year, especially in the USA.

This is because over the past 12 months there has seen significant growth in major asset class values (particularly shares) across the world which has been fuelled by the significant increase in global debt.

For example, according to the PE Shiller Index, the US share market (as measured by the price of a company's share relative to average earnings over the past 10 years for US companies in the S&P 500) is now at its second highest valuation level in history at 32.62, with the highest being the 1999 dotcom bubble.

According to the PE Shiller Index, the bubble in US share market is now bigger than the peak reached in September 1929 which was 32.54. This was immediately followed by the 1929 Wall Street crash.

The good news for the Australian property sector is that any major correction in the stock market should benefit the local real estate sector.

When the stock market crashes, the property market tends to benefit as happened following the stock market crash of 1987.

The move from stocks and shares to property will be led by older Australians who had their retirement savings boosted by the stellar performance of the stock market over the past year.

Many of these older Australians have substantial amounts of money in superannuation funds, which in-turn have invested heavily in the international share market.

These superannuation funds will be badly affected by any stock market correction and this could see a flight of money into the property market led by older Australians who already own property.

These older Australians understand property offers a "safe haven" for investors during times of financial uncertainty as most have owned their family home for many years and seen it appreciate in value over time.

DEPPRO is finding a very high proportion of property investors undertaking tax depreciation reports are now aged forty-five years and over.

The tax benefits associated with property investment is historically encouraging mature investors to buy real estate.

Property investing still allows people to claim generous tax benefits associated with negative gearing as well as depreciation.

The tax benefits associated with tax depreciation can be very signification with DEPPRO clients achieving tax benefits obtained through depreciation equivalent to 60% of the total purchase price of the property.

To qualify for these legitimate tax deductions, an investor must have a fully compliant tax depreciation company undertake an onsite inspection of the property and then compile a depreciation report based on this inspection.

Property investors should therefore check that the company undertaking their tax depreciation schedule is a member of The Australian Institute of Quantity Surveyors (AIQS).

Employing a company who is a member of AIQS such as DEPPRO gives protection to consumers that their tax depreciation report complies is completed in a professional manner.

Click here to complete the details and ensure your client receives a higher return on their cashflow.

ZipID makes life easier for clients

Watch the video above to see how this can benefit your customers.

In response to broker requests, there is a growing group of lenders now actively supporting ZipID's 'come to you' agency service as its preferred VOI agent when a broker can't meet their client in person.

You might have seen Pepper Money's recent ZipID announcement, and other lenders are now looking to follow the lead that ING Direct, Macquarie and a range of third tier lenders have now taken. More lenders will be announced during February.

The table below shows which lenders now support the ZipID agency service, each lender's booking model and payment arrangements.

ASIC Warning: Shadow Shopper Scam

ASIC warns the public to be wary of a scam where cold callers are claiming to be undertaking a 'shadow shop' on behalf of ASIC. A shadow shop is where real consumers are recruited to purchase services such as financial advice to help assess the standards in the market.

These scammers claim to be looking for shadow shoppers as part of an ASIC compliance and monitoring campaign. The scam maintains that it will pay you for your time and may encourage you to meet in person or attend a presentation after which you will receive a questionnaire to complete.

The scammers promote their services at the following website, that makes false representations that their work is associated with ASIC.

ASIC has no involvement with this website or its operators, and is undertaking inquiries into the activities of the operators.

ASIC urges anyone who receives contact in these circumstances or is referred to this website to not respond.

From time to time ASIC carries out genuine consumer research including shadow shops, however we only work with accredited market research companies. If you are contacted by a company representing that they are undertaking research for ASIC you can call ASIC's Infoline on 1300 300 630 to check.

This scam is not connected or associated with legitimate market research firm Shadow Shopper at and ASIC thanks them for bringing this matter to its attention.

Prospa webinars: get up to speed on small business loans

Vow has recently partnered with Prospa to continue to provide fast, easy, efficient loans for small businesses.

All it takes is ten minutes to apply, you get approval the same day and the money you need can be in your client's account in 24 hours so they can get on with business sooner.

Key points to know:

-Borrow between $5000-$250,000

-Apply online in 10 minutes and be approved the same day

-Terms from 3 to 24 months

Want to know more? Attend our webinar on Tuesday 27th February at 2pm AEDT for a half-hour overview of Prospa and how we can support growth in your business! Click the below link to register:

Alternatively; if you have any enquiries, please call: 1300 630 030 or email

Nab special unadvertised rates

This is available now by visiting NAB instant pricing tool.

Summary of changes:

1. Owner Occupier P&I reductions of up to ~15bps

- $250k - $750k (aggregate lending) now in the 3.80's

- >$750k in the 3.70's

2. Investor P&I (~15bps) and IOL (~30bps) reductions

- Any P&I deal above $500k in the 4.30's

- Gap closed between Investor P&I and IOL to ~25bps (from ~50bps)

3. Construction BICOE loans now priced at P&I rates during the IOL construction period