Linz’ Musings – May 24th, 2019

G’day all

Happy Friday! So, its done…it appears that ‘ScoMo’ has pulled off the “Steven Bradbury” of politics…winning the unwinnable election. Question I guess for the much more politically savvy than me, is that did the Libs win or did Labor lose it…?

I kinda feel is more the latter than the former, but the markets certainly were happy with the result – the USD/AUD jumped up over the weekend (short term rise though); ASX, and particularly banking stocks took a nice short term rise as well. The Labor loss will certainly allay the fears of many investors, particularly in Real Estate, with Labor’s proposed changes to Franking Credits, Negative Gearing, and Capital Gains tax now confined to the Recycle Bin of history.

With APRA also finally seeing the light and allowing the banks a touch more leeway when lending (they have released the tough constraint of rating serviceability at equivalent rates of 7% when its clear our interest rates will not be back near level for a LONG time) and the Fed Reserve chalking up two rate cuts this year (one is pretty certain to be next month) this should see an easing in the financial markets and make lending more accessible for everyone. Throw in the Liberal Gov’ts “First Home Buyers Grant” which is not really a grant, more like a bonus, and I think we are in for a nice period of growth again in property in the months to come. It will take some time to see this in pricing (up to 6 months possibly) but soon could be a good time to start looking to set up offset loans against property here, and get some high cashflow from the States!

If you need help with the strategies of where to start, or how to set this up, sing out, we would love to help.

Have a great weekend all and Happy Investing…!!