House Prices may go up by up to 20% in next 3 years..Perth, Sydney & Adelaide are set to boom !

AUSTRALIAN house prices may rise by up to 20 per cent over the next three years, despite interest rates possibly reaching 9.1 per cent, but Melbourne will miss out on most of the price growth, according to a respected business forecaster.
A QBE Housing Outlook 2010-13 survey compiled by BIS Shrapnel forecasts house price growth of between 9 and 20 per cent in Australia's capitals over the next three years, the result of a stronger economy and undersupply of housing.
Prices in Perth, Sydney and Adelaide are forecast to grow by up to 20 per cent and Brisbane and Hobart are expected to rise 15 and 13 per cent respectively. Melbourne, Darwin and Canberra will grow the least.

Strong growth in Melbourne house prices last year and early this year combined with a higher level of housing construction - more than in any other state - and worsening housing affordability would slow the city's price growth over the next three years to 9 per cent, below that of all other capitals, the BIS report said.
The forecast follows concern voiced by some economists and international investors that Australia's housing market is overpriced and may be verging on a property bubble.
Investment bank Goldman Sachs recently dismissed suggestions that Australia was experiencing a housing bubble, but said property prices were overvalued by as much as 35 per cent.
Last August, the national median house price dropped 0.2 per cent in seasonally adjusted terms to $457,000, knocking $8000 off the median price for July.
But BIS Shrapnel said strengthening economic conditions and an undersupply of housing in most states should provide substantial upward pressure on house prices.
''Economic growth is also forecast to continue to accelerate, fuelling employment and income growth,'' the report said. ''Price growth is expected to generally peak in 2012-13 as economic growth also peaks.''
Demand for housing from first home buyers was not expected to improve until next year.
Australia's housing market has so far proved more resilient than most other developed nations, partly because of population growth and commodity exports.
In the report, BIS Shrapnel forecasts that variable interest rates will peak at 9.1 per cent in 2013.
''This will ultimately have a slowing effect on the economy and prices, although there may be one last gasp for price growth in some cities in 2012-13 where there is a large deficiency, or affordability is not strained,'' the report says.
''We expect price rises will be underpinned by a deficiency of dwelling stocks across most capital cities, which in turn will lead to tight vacancy rates and solid rental growth, flowing through to increased investor demand,'' said QBE chief executive Ian Graham, who commissioned the report.
Another report released yesterday shows mortgage stress is being felt most in the middle to outer suburbs, but there were fewer delinquencies - defined as failing to pay one or more mortgage payments - in Victoria than other states.
A survey by Moody's Investor Services of residential mortgage-backed securities suggests that most areas in Melbourne have performed reasonably well in terms of loan arrears.

Cheers,
Rashesh Bhavsar
Financial Planner
Fortune Wealth Creation Group
www.fortunewealth.com.au


Source:http://www.smh.com.au/business/property/house-prices-up-20-20101012-16hr6.html

Property Report for September Quarter 2010

I have herewith attached a Property Report for September Quarter. This is a snapshot for Melbourne West. Read Page 3 for to read full report on Melbourne Property outlook. Click here to access the report.

Melbourne West:

Melbourne’s west remains relatively affordable, especially when taking into account proximity to the CBD. And although a levelling of the market is expected in the coming months, there will be no dramatic drop off as demand for suburbs in the west continues.

Vacant allotments in the west represent an especially strong segment with supply not meeting the significant demand. In particular, land with development potential is highly sought. 

There will be an increase in medium density housing as land costs gradually increase in response to the lack of supply. Although clearance rates are high, sale by auction isn’t traditionally the top method of sale in many of Melbourne’s western suburbs due to a stable supply of similar properties within designated regions. 

Deer Park supports this trend with only 11 per cent (REIV) of property sales resulting via auction in the last 12 months. However, this trend is slowly changing as demand for western suburbs’ property increases. Properties in Melbourne’s west continue to be supported by developments in infrastructure such as the additional rail links to the west, new shopping facilities and industrial warehouses on Derrimut Road, and the ongoing construction of Watervale Shopping Centre on the corner of Taylors Road and Calder Park Drive.


Please do not forget to feed my fishes by clicking your mouse on the water and hungry fishes will follow your mouse and eat the food !! 

Cheers,

Rashesh :)

Financial Planner, 

Fortune Wealth Creation Group

www.fortunewealth.com.au

Industry funds have a lot to answer for, says AFA

The millions of dollars spent on “anti-adviser advertising campaigns” by the industry fund movement would be better spent on restoring confidence in superannuation and advice, according to the national president of the Association of Financial Advisers (AFA) Jim Taggart.

Responding to recent Roy Morgan research that revealed a low level of consumer trust in advisers, Taggart said industry funds had a lot to answer for.

“Such campaigns only stoke and prolong the crisis in consumer confidence brought about by the global financial crisis,” he said. “Members’ money could be better spent on campaigns which set about restoring confidence in superannuation and advice, so that consumers are better positioned to grow their wealth and protect their assets.”

Taggart called on advisers to fight back.
“The future of advice is now up for grabs and the only people who can fight this battle are those of us who truly believe in the value of advice.”
Referring to the Roy Morgan research that found that a ban on commissions may make financial advice unaffordable for those that need it the most, AFA chief executive Richard Klipin said it supported AFA’s Back to Basics Consumer Research, conducted by CoreData/brandmanagement earlier in the year.
“The Roy Morgan analysis says what the AFA has been saying for some time now, and that is that the current proposed ‘reforms’ may actually limit consumer access to advice,” he said.

Source:http://www.moneymanagement.com.au/news/industry-funds-have-a-lot-to-answer-for-says-afa

Clarifications to some important insurance questions

Dear Friends

I have clarified some important questions directly with Senior officer at ING Risk Underwriting which was asked by Shail last weekend.

1)      What happens with 3 months waiting period when you review your policy in future, is it starts again ?

Ans: 3 months waiting period only applies to increased level of cover, not the existing one.

2)      Are you able to cancel any one type of cover from your existing Policy in future ?

Ans: For example, if you go for Life, TPD, Trauma and Income Protection cover now and if you decided to cancel TPD or Trauma cover in future, you are able to cancel them without cancelling Life and Income protection. So there is no need to go for new policy.

3)Does Life or Income protection cover is for worldwide and for how long?

      Ans: This is very complex question to explain. I will try my best to simplify.

Scenario 1: If some has a intention to live permanently overseas then ING will not cover.

Scenario 2: If someone does not have any intension and he goes overseas permanently then ING covers worldwide cover for permanently. For income protection, when you claim income protection cover when you are overseas, you need to come back within 3 months to Australia to get continuous claim unless you are not able travel Australia.

       4)If you become unemployed, does income protection cover continuous ? (My doubt)

Ans: Income protection cover will cover for 12 months after you become unemployed for your own occupation and after 12 months it will continue to cover under home-make (home duties) definition.

I personally thank Shail to ask above questions and I encourage everyone to participate to our discussions. These kind of discussions/questions ultimately help you and me to get the most out of my services which is my ultimate goal to provide top quality advice and service. 

Please do not hesitate to ask me any doubt or question and no question is a silly question. The best way to ask me is via email as I can go back as many times and you can clearly explain your doubt.

Cheers,

Rashesh

Financial Planner,
Fortune Wealth Creation Group
http://www.fortunewealth.com.au/
Ph: 03 9018 5534

Myths about Financial Planning/Financial Planner

Myths about Financial Planning/Financial Planner

There’s a lot of misconception about financial planning and how it can help you.  Here is a list of the top 6 myths surrounding financial planning.  We hope that by dispelling some of these common myths you can get a better understanding of financial advisers and how they can assist you to achieving financial prosperity and security.

Myth #1: Only people who have already accumulated wealth and/or assets can see a financial adviser

This is one of the biggest myths surrounding seeking professional financial advice.  Most people believe that you need to have already established yourself financially before a financial planner can help you.  Some financial advisers will only want to work with you if you have some established assets as by advising you on how to allocate this wealth this allows them to be paid.  At Fortune Wealth Creation Group, we follow Fee-For-Service, or charge a flat fee instead of earning a commission.  This means that they are able to assist you in accumulating wealth through things such as setting up savings plans and budgeting, whereas other advisers won’t as they wouldn’t earn a commission for this advice.  The value of advice at the early stages of your life can be just as great, if not greater than when you have already built up your wealth.

Myth #2: Financial Planners just sell their clients managed funds

Many people believe that financial planners just sell managed funds to their clients.  This isn’t true. Whilst a financial adviser can recommend their clients invest in specific investments as one tool to help grow their wealth, a holistic financial planner will look at areas such as debt reduction, tax minimisation, property, shares, superannuation, insurance, and cash flow just to name a few.  All of these areas are important when looking to grow and secure wealth – not just investing into products.  Some financial advisers have a greater emphasis on placing their clients into managed funds as this provides them with payment via a commission.  This perhaps may explain why this myth is a common one.  Not all financial advisers are equal however.  Fortune Wealth Creation Group is in the minority when it comes to offering clients truly holistic advice.  Because Fortune Wealth Creation Group doesn’t earn commissions, its’ financial advisers place just as much emphasis on areas such as paying less tax and budgeting, as placing clients in managed fund investments.

Myth #3: I’ve already got an accountant, so I don’t need a financial planner.

Many people already have an accountant that they know and trust for their financial needs so they don’t think that they would benefit from seeking the services of a financial planner.  What most people don’t understand however, is that although it is very important that accountants and financial planners work together in partnership, both fulfill very different needs.  Financial advisers are trained to take a more holistic approach to your finances than accountants are.  Whereas an accountant will complete your tax return or offer advice for small business, a financial planner will work with you on understanding your life goals and help to implement a financial plan to help you achieve them.

At Fortune Wealth Creation Group, we work closely in partnership with accountants to ensure that our clients receive the benefit of a team approach.

Myth #4: I don’t need a financial planner – I’m nowhere near close to retirement

A common misconception is that financial planners are only to help retirees or people starting to think about retiring.  This is very far from the truth!  Whilst it is true that there are many financial advisory firms whose target market are retirees, at Fortune Wealth Creation Group we believe the true value of financial advice can be gained by starting early.  Most of our clients are younger professionals in their 20s, 30s and 40s who are at the accumulation stage of their lives.  We know that we are in the minority when it comes to our competitors but we are passionate about helping young Australians get ahead financially.  We help our clients to map out the goals they want to achieve in the short, medium and long term, and work with them to implement a financial plan to help achieve these goals.  Time is your biggest ally when it comes to setting yourself up financially – so don’t wait until you are in your 50s and 60s to start planning for the future! 

Myth #5: Financial planners charge too much and get hefty kickbacks from companies they recommend their clients invest in

Financial planners have received a lot of bad press over the years and the result is that many Australians have a very negative view of the trustworthiness of the financial planning industry.  In truth, individuals authorised to provide financial advice to people in Australia are bound by strict regulations from the Australian Securities and Investments Commission (ASIC).  All remuneration received by implementing a proposed financial plan must be clearly outlined in a Statement of Advice (SoA) which must be given to the client.  This enables transparency in the financial planning process so that you know exactly how much your financial adviser will be paid in relation to your financial plan.

At Fortune Wealth Creation Group, we’ve gone one step further and developed a fee-for-service or a fixed fee payment structure so that we don’t receive any commissions from any investment product that we recommend to our clients.  This means that our clients pay for our advice.  We believe that this fee structure helps to protect our clients from potential conflicts of interest.  In addition we offer a range of packages for our clients to select from so that they can feel comfortable that they’re getting value for money.

Myth #6: All financial advisers are the same.  Shouldn’t I just see the adviser at my bank branch?

There are financial advisers, and then there are financial advisers.  Whilst it’s true that all financial planners in Australia must be authorised under a financial planning licence from ASIC, it is important to know that there are potential conflicts of interest that may arise by seeking the services of a financial adviser who is connected to a large institution – be that a bank or other financial institution.  Why?  Financial advisers who are part of financial institutions who offer their own financial products (eg. life insurance and investments) will likely be restricted to a small selection of products that they can offer their clients.  This means that if you went to Bank XYZ seeking advice and the financial planner at Bank XYZ identified that you need income protection – it is likely that they’ll be restricted by the XYZ Bank to only provide you with advice to obtain an XYZ Income Protection policy.  The problem is that your XYZ financial adviser might know that a better policy for your situation can be provided to you by ABC Life Insurance, but because they are part of the XYZ institution, they can’t offer this policy to you.

The good news is that not all financial advisers in Australia are part of large corporations and therefore are better able to provide you with a wider selection of investment and insurance products from a range of providers in Australia.  These financial advisers tend to be known as “boutique” or “privately-owned” financial planning firms as ASIC restricts the use of the word “independent”.  These small boutique financial advisory firms are in the minority as many have been bought out by the larger institutions and do not have the massive monetary resources of their competitors, but they are out there and can offer you great financial advice.  Fortune Wealth Creation Group is one such privately-owned financial planning firm based in the Melbourne CBD.

Myth #7: I can't afford a financial plan right now.

Perhaps part of the reason you think you can't afford one is because you're paying too much in income taxes, interest and investment expenses, all of which a financial planner can help you to reduce. And fees you pay for ongoing investment advice and tax planning are also tax deductible.

Hiring a competent and ethical fee-only financial planner to write you a comprehensive financial plan will probably be the best investment you will ever make.