August Update

With property prices at record levels, the size of the average mortgage has also hit new highs, making it more important than ever that you shop around for the right loan.

Australia’s median property price reached a record $794,000 in June, up 8.0% year on year, according to CoreLogic. Meanwhile, the size of the average owner-occupied loan reached a record $626,055 at the end of May (the most recent month for which we have data), up 7.1% year on year, according to the Australian Bureau of Statistics.

Just as interest rates can vary significantly from lender to lender, so can your borrowing power, depending on your financial profile, the type of property you’re planning to buy and the location of the property. Sometimes, one institution might be willing to lend you tens of thousands – or even hundreds of thousands – of dollars more than another institution.

Trying to source all this information yourself would be very time-consuming. But brokers have an intimate understanding of the credit policies of many different lenders. That’s why, if you get a home loan through a broker, they can recommend a lender that is suitable for someone with your profile and scenario.

The unemployment rate has continued to creep up, reaching 4.2% in July, compared to just 3.7% in February, according to the Australian Bureau of Statistics (ABS).
 
However, the Reserve Bank of Australia (RBA) doesn’t expect it to rise much further, forecasting that the unemployment rate will be 4.3% at the end of this year and 4.4% at the end of next year.
 
“The participation rate remains strong and average hours worked have proven resilient. Job vacancies have come down, but they are still higher than before the pandemic,” according to the RBA.
“The unemployment rate is expected to keep slowly rising until early 2025 but the expected recovery in GDP growth should continue to support demand for labour.”
 
The economy grew by an annualised rate of just 1.1% in the March quarter, based on the latest ABS data, and the RBA expects growth to fall to 0.9% in the June quarter. However, growth is expected to rise to 1.7% by December 2024 and 2.5% by December 2025 – which is likely to lead to greater business profitability and an increased demand for labour.
If your business is planning to invest in a company car, there are three main things to think about when you do your research – the price of the vehicle, the reliability of the vehicle and the amount of time you’ll need to wait to receive the vehicle.
 
That’s because there’s just as much variability around waiting times as price and reliability.
 
The average waiting time for a new car in June was 65 days, according to the latest data from Price May Car. But it was significantly longer for some vehicles, including the Toyota Hiace (278 days), Toyota Corolla (216 days), Hyundai Staria (133 days), Ford Everest (127 days) and Suzuki Jimny (119 days).
By contrast, some vehicles had short waiting times, such as the Subaru Impreza (15 days), Subaru Forester (16 days), Mazda CX-5 (19 days), Hyundai Tucson and Volkswagen T-ROC (both 21 days).
 
Please contact me before you start searching for a vehicle, so I can compare the market and organise a pre-approval. That way, you’ll get a good deal and know your budget.
The first superannuation guarantee (SG) payment of the 2024-25 financial year is due on 28 October, as it is every year.
 
Thereafter, payments are due on 28 January, 28 April and 28 July, as per normal.
 
The Australian Taxation Office (ATO) has urged businesses not to miss these deadlines.
 
“The ATO takes non-payment of SG seriously,” it said. If you miss a deadline, “even by a day”, you must pay the super guarantee charge (SGC) to the ATO and lodge an SGC statement within one month of the SG deadline.
 
The SGC is not tax-deductible and is more than the super that was supposed to be paid.
 
One common reason businesses are slapped with an SGC is because their super payments don’t reach their employees on time.
 
“Remember, if you use a commercial clearing house, you need to allow time for payments to reach your employee’s super fund by the due date,” the ATO said. “The due date is the date payments are received by the super fund, not the clearing house.”

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