Articles

Of late it seems as though the media is asking the following questions more and more: 

• is Australian property overvalued?
• is the property market set for a correction?
• what will the Australian property market follow a similar trend to overseas property markets?

The July 2011 MLC Investment Insight magazine provides in depth look into the Australian property market and what lies ahead.  The publication has been put together by Michael Karagianis an Investment Strategist with MLC Investment Management.

There has been a slowdown in the number of overseas pension transfers, most notably from the United Kingdom. 

This is a reflection of poor and uncertain market conditions here and overseas in the last 18 months and the appreciating Australian dollar exchange rate deterring repatriation of funds to Australia.

A tax liability can arise in Australia on the repatriation of funds from an overseas pension fund, the tax payable generally based on the growth of the fund since the client first became an Australian tax resident to the transfer date.

The All Ordinaries Index fell 2.9% to close the month at 4,369.9 points, marking the fourth negative month in a row.  Whilst August was another poor month, in a relative sense, the Australian sharemarket was somewhat insulated from the large falls experienced overseas.

Global sharemarkets were all significantly weaker in August with the Dow Jones Index falling 4.4%, the FTSE falling 7.2%, the Nikkei 225 falling 8.9% and the Hang Seng falling 8.5%.

The Australian sharemarket is down sharply today following an overnight global sell-down.  Given the events of the last few weeks (and months), I have put together an article with my thoughts.

The key issues facing investors at the moment are threefold:

Government debt was again a factor weighing down the performance of the Australian sharemarket in July. 

The All Ordinaries Index fell 3.4% to close the month at 4,500.50 points, marking a poor start to the new Financial Year.  Global sharemarkets were all weaker in July with the Dow Jones Index falling 2.2%, the FTSE falling 2.2%, the Nikkei 225 falling 0.6%.

Click on the link below to access the latest NAB Residential Property Survey.

This report monitors residential property prices and growth forecasts for all major Australian Capital cities.

NAB Residential Property Survey - June Quarter 2011

The Greek debt crisis played havoc on the Australian sharemarket in June, before recovering strongly on the last two trading days with news that Greece’s parliament passed a further round of austerity measures.

The All Ordinaries Index fell 2.7% to close June (and the 2010-11 financial year) at 4,659.80 points.  I note that the All Ords was down as much as 5.5% during the month, before staging a strong late month recovery.  For the full financial year, the All Ords had a positive 3.4% return.

Australian banks are likely to continue lowering their exposure to overseas funding markets, a senior member of Australia's central bank said today.

After relying largely on overseas markets to fund their operations in years past, Australian banks have been raising less of their wholesale funding from offshore than has matured over the past three or four years.

The total number of houses and apartments that started construction in the first quarter of 2011 rose 3.1% to a seasonally adjusted 39,578 from the fourth quarter of 2010.

The Australian Bureau of Statistics also said that the number of private-sector houses started in the first quarter fell 1.9% to 23,124 from the previous quarter.

The trend estimate for the total number of housing starts, which further smoothes the seasonally adjusted numbers, fell 1.9% to 38,570 from the fourth quarter.  

An index of consumer sentiment fell 2.6% in June from May, marking the lowest reading in the index in two years.

The index fell to a reading of 101.2 points in June in seasonally adjusted terms from 103.9 points in May, compliers Westpac Banking Corp. and the Melbourne Institute said.

In annual terms, the consumer sentiment index fell 0.6% in June in seasonally adjusted terms. In trend terms, the index fell 0.9% in June compared with May, contributing to a 4.7% annual decline.