House prices 'too high for cops, teachers'

ESSENTIAL community workers such as teachers and police face being priced out of most Australian capital cities due to rising house prices, research shows.

A BankWest study shows 78 per cent of the nation's local government areas have average house prices well outside the affordability of police, teachers, nurses, fire fighters and ambulance officers.

The bank deems an area unaffordable if the average house price is more than five times the average annual earnings of a worker.

The percentage of capital city council areas seen as unaffordable is up from 75 per cent in 2009, and 70 per cent in 2005.

"These are the essential workers which Australians rely on every day to provide important services and they face the possibility of being priced out of housing in the communities in which they serve," Bankwest Business chief executive Ian Corfield said.

"This means that many are being forced to rent for longer or buy and face a long commute into work.

"This is particularly evident with the strengthening in the east coast property market in the last 12 months which has stretched affordability for key workers in Sydney and Melbourne."

The research also shows how difficult it is for all first home buyers in capital cities, he added.

Sydney is the most unaffordable city, with the average house price more than eight times the average annual earnings of a what BankWest calls a "key worker".

Peppermint Grove in Perth was the most unaffordable council area, followed by Sydney's Mosman and Woollahra council areas.

Regional areas are much more affordable for the 480,000 Australians working in key community roles, with 65 per cent of council areas deemed affordable, BankWest said.

Tasmania's Brighton, Sorell and Glenorchy City council areas were in the top five most affordable areas, along with Playford and Salisbury in South Australia.

Read more: http://www.news.com.au/money/property/house-prices-too-high-for-cops-teachers/story-e6frfmd0-1226019134637#ixzz1GGQSS0Uj

Top 7 excuses not to see a financial planner for investing

1. Budget? Never had one in my life
   Congratulations for getting this far without one. For most of us, a budget of some sort is an essential guide to making the most out of our income. We also rely on budgeting to achieve short and long-term goals. Without a budget, it can be hard to keep track of day-to-day expenses, let alone being able to cope with the unexpected.
   
   
2. We've got no spare money – I'm in debt up to my eyeballs
   Has anyone got a sizeable chunk of spare money hanging round? I can only think of Bill Gates and Donald Trump, and they’re way out of my league. However if you’re battling debt and your credit cards are out of control, maybe it’s time to reassess how you are living. You might be surprised how much money you ‘waste’ which could be put to better use by saving for a set goal or protecting your income.
   
   
3. I’m too busy, I’ll get around to it another day
   You’re not alone in being time poor. It’s the biggest scourge of the modern working world and, as with everything else; you’ve got to make time. It’s your life, your family, your dreams and goals. Surely, some thinking time to put it all in perspective is not too much to ask?
   
   
4. I won’t understand all the jargon
   That’s what a licensed financial planner is there for – to translate any jargon into plain English you can understand. Of course, the more you prepare for your first meeting with a planner, the more comfortable you will be. It’s not hard or intimidating, and planners love plenty of questions.
   
   
5. My husband/wife handles the money side of things
   That’s not a problem but if you’re not sure what measures your partner has put in place for your future security, perhaps the two of you should sit down together and discuss your finances in detail. Personal goals change at every stage of life so it’s a positive move to think about where you are at now and the lifestyle you want in retirement.
   
   
6. My accountant looks after all that
   An accountant’s qualifications are very different to those of a licensed financial planner. Putting all your eggs in the one basket can mean you’re missing out on important industry developments.
   
   
7. Superannuation is something to worry about when I am older.
   Very true and it will be very worrying if you don’t start early. No matter how small the contribution, the earlier you start the less worry you will have as you get older. The government is encouraging us all to fund our own retirement. A licensed financial planner keeps up with all the changes and opportunities that will best assist you to be financially worry-free at retirement.

Source: http://www.canstar.com.au/investing/top-7-excuses/

        

Rates to rise later in 2011: economists

The Reserve Bank of Australia (RBA) surprised no one by leaving the cash rate unchanged but economists expect a rise in the next few months.
The central bank on Tuesday opted to leave the cash rate at 4.75 per cent, where it has been since November.
In a statement that accompanied the interest rate decision, RBA governor Glenn Stevens cited low inflation, a pick-up in private investment and ongoing consumer spending as reasons for holding off the rate rise button.

ICAP senior economist Adam Carr said the decision to leave rates on hold was unsurprising although economic conditions suggested the RBA should have raised rates.
"There is no credible counter to the idea that rates shouldn't be going higher today," Mr Carr said.
"This idea that consumers are being cautious is demonstrably false. There's no truth to it and no evidence for it.
"I think the sooner we let go of this flawed analysis, the sooner we can get on with the job of managing what is a very strong expansion."
He said the RBA's statement was slightly more hawkish than the language it had used recently.
"They tinkered with the description of monetary policy, highlighting that it's mildly restrictive - this is relatively new to their last statement," he said.
"The way the data flow is going, particularly the sharp pick-up in consumer spending, I don't think a rate hike should be too far off."
HSBC chief economist Paul Bloxham said the RBA statement offered no surprise.
"No one was expecting them to change rates," Mr Bloxham, a former RBA employee said.
"It repeats the story they have been telling us over the past couple of months."
Mr Bloxham said he did not expect the central bank to lift the cash rate until the second half of the year and that it would be 5.25 per cent by year's end.
AMP Capital Investors chief economist Shane Oliver said the RBA statement implied no great urgency to move.
"The general impression is that the Reserve Bank is still pretty happy with the way things are and that the outlook for inflation remains fairly benign over the year ahead," Dr Oliver said.
The RBA said in its statement that the adverse economic effect of the recent floods in Queensland and Victoria was temporary.
"Whatever the impact, the Reserve Bank has signalled it's prepared to look through the impact of the floods and focus on the medium-term outlook," Dr Oliver said.
"My take on it is the RBA maintains a weak tightening bias."
Dr Oliver said he expected the RBA to keep the cash rate on hold for the next few months with a possible hike by mid-year.
"That's when rates will start to head higher, mainly again on the back of the boost to national income and the boost to business investment."

Source: http://news.smh.com.au/breaking-news-business/rates-to-rise-later-in-2011-economists-20110301-1bcvp.html

Comminsure and Tower named life companies of the year

CommInsure and Tower have both been named the winners of the Association of Financial Advisers/Plan for Life 2010 Life Company of the Year Awards.
At the awards presentation in Sydney, the AFA chief Richard Klipin said it was “impossible to choose between the excellent products and services offered by both CommInsure and Tower”.
CommInsure also took out the Service Quality (Which I always did say to my clients) and Investment Bond Award.
Speaking on behalf of Plan for Life, the senior vice president for operations of Asset International, Mike Rosenthal, said the risk market represented a huge growth opportunity.
“In Australia, there has been 18-20 per cent growth per annum over the past six years,” Rosenthal said.
“While the [global financial crisis] has had some effect on this industry, now is the time to invest in product development and service to advisers, ensuring your sails are there to catch the wind as it picks up shortly and we return to double digit growth again,” he added.
Runners-up for the Platinum award were AXA and OnePath.
Source: http://www.moneymanagement.com.au/news/comminsure-and-tower-named-life-companies-of-the-y

Rashesh Bhavsar
Financial Planner
Fortune Wealth Creation Group
566 St. Kilda Road, Melbourne, Vic 3004