Economic History Pre and Post GFC Glass Steagall Act Repealed in 1999 Banks Too Big to Fail Governments Step In Sovereign Debt Crises Reserve Banks to the Rescue Vicious Circle in the Wild West ID: 789589
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Slide1
The Sumo Group of Companies
Slide2Economic HistoryPre and Post GFC
Glass-Steagall Act Repealed in 1999
Banks Too Big to Fail – Governments Step InSovereign Debt Crises – Reserve Banks to the Rescue
Vicious Circle in the Wild West
Slide3Key Issues for Key EconomiesEurope – Uniform Currency but Political Diversity
USA – Huge disparity between Public and Private
Japan – Aging Population and DeflationIndia and Asia – Living Conditions
Slide4How does the Macro Economy Interact with Personal Wealth Gain
?
Slide5Golden Principles of the Past Macro Environment Now Challenged
Buy and Hold is a Safe way to Invest vs Affordability
Share markets Always Outperform – Is this True with Monetary Printing ?
If its all too Uncertain, keep cash in the Bank !!
Is there a New Paradigm ?
Slide6These are Unprecented
Economic Times !!
Slide7Relative debt positions
Slide8Sustainability of Debt - USAUS Tax Revenue - $2,170,000,000,000Federal Budget - $3,820,000,000,000
New Debt - $1,650,000,000,000National Debt - $14,271,000,000,000
Budget Cuts - $38,500,000,000OPTIONS : Raise Taxes, Lower Government Spending or Borrow more ?
Slide9Let’s Assess the FactsHave All the Economic Bullets Been Fired ?
Too much Capital chasing Too Little Yield
Changing of the Guard – The RiskWhich Country is Most Likely to be Left Still Standing ?
Slide10AUSTRALIA
Slide11Australia’s international standing
Organisation for Economic Co-operation and Development
(OECD)
Better Life Index 2012
Slide12Australia’s Economic Position12th largest national economy by GDP (US$1.57 trillion)8
th largest Stock Exchange in the World
Global trading valued at $627 billion (Financial Year)The Test of Time ?
Slide13Australia’s Track Record1987 Stock Market Crash1997 ASIAN Currency Crises
2007 Global Financial Crises
KNOWLEDGE TESTWhich Country is the biggest Investor in Australia and Why ?Which Country had the 2nd best Performing Stock Market in the World over 100 Years ?
Why has the Australian Economy been Growing
Consistantly ?
Slide15Slide16Where do we Start to Build Wealth in the New Economic World?
Slide17Where Money Printing Ends Up – On Real Assets, in the Safest Economic Geography !
Slide18What About Property ?
Source:
Residex
S
ydney Morning Herald
ANZ tie-up looks to boost
Chinese investment
in
Australia
The Australian-18 hours ago
“This will not only support the growing two-way trade and
investment
relationship between
Australia
/New Zealand and
China, but
will also help
.
Slide19AUSTRALIAN PROPERTY
There are a range of important factors that point the overseas buyer to invest in Australian residential real estate.
Stable and transparent governmentProvision of optimum yielding prime grade assets.
Strong economic performance –GDP growth.
Well maintained and improving infrastructure.
A skilled and educated work force.
Australian Government encouragement to offshore buyers.
Compares highly against other Asian property markets.
Slide20Is Property a Good Investment ?AFFORDABILITY higher NOW despite higher PricesGovernment Incentives – Tax and 1st Home Buyers
Ratio between Supply and Demand
Restricted Finance to developers
Slide21Major Cities
Sydney
New South Wales
Melbourne
Victoria
Brisbane
Queensland
Gold Coast
Queensland
SUMO AUSTIN GLOBAL WEALTH
Slide22Slide23Slide24Where does one start to Find Opportunities in Australia ?
Slide25Investing in
Australia
Some Key Financial Facts…
Slide26Borrowing Rate
Rental
Vacancy Rate
Key Facts
CHINA
AUSTRALIA
22.4
%
**
1.4
% (Sydney)*
Source: *
http://www.yourmortgage.com.au/article/rental-yields-in-sydney-set-to-rise-as-vacancy-rates-plunge-78808.aspx
Source:**
http://www.chinanews.com/gn/2014/06-10/6265850.shtml
Slide27Key Facts Continued
CHINA
AUSTRALIA
Source:
http://
www.chinasmack.com/2013/stories/chinese-land-use-rights-what-happens-after-70-years.html
Source
:
http://
www.ausproperty.cn/instruction/61971.html
Source:
http
://mt.sohu.com/20141223/n407219454.shtml
Slide28AUD / RMB Exchange Rate
AUD / RMB Exchange Rate
Key Facts Continued
CHINA
AUSTRALIA
*Source:
http://www.globalpropertyguide.com/real-estate-house-prices/I
Source
:
http
://
www.boc.cn/sourcedb/whpj/enindex.html
Source
:
http
://www.zhihu.com/question/27310210/answer/36091343
RMB 4.6= 1AUD(was 6.7)
BEST TIME TO INVEST!
Slide29Typical Property Investment
Investment Property Value $750,000
Your Investment
- 10 % on contract $75,000
- 10 % on settlement $75,000
Other Costs
- Stamp Duty + legal + accounting(around) *
$
35,000
Total
$185,000
Property Value grows by @ 6 %
of
$750,000
Year 1 ($795,000 – $750,000)
$ 45,000
Year 2 ($842,700 -
$
750,000)
$ 92,700
=
RMB
426,420
Year 3 ……
……
*Stamp
duty varies from State to State
Slide30The
longer
you hold the property, the more value you received
1 2 3 4 5 6 7 8 9 10 Years
Value
$750,000
Loan
$600,000
Value
$1,343,234
Loans can be “Interest Only”
Slide31Income / Expense Working
Income
Rent Received
Monthly (
@ 5 % of Value )
$3,125
Expenses
Interest on Loan ( @ 5 % of Loan )
$2,500
Other
expenses*
$529
-------------------
Total Expenses
$3,029
===========
This means you do not need to worry about the loan as the rental can almost cover the mortgage as Australia has lower Rental Vacancy Rate.
* This rate is based on average
Water,
council ,strata and agent service fees, they may vary from case to case.
How to
Manage
the
Mortgage
?
Slide32What we can do for you ?
Selection of appropriate property for you
Legal – assist you in conveyance of the property
3. Arrange for the Bank finance (Loan)
a. Property Management
b. Finding the tenant
c. Managing property
d. Collecting rent
Accounting services
Cross border tax advise
7. Assist in selling your property