January 2020 Finance Update
Welcome to 2020!
First and foremost, I hope you were not severely impacted by the bushfire crisis.
If you were, I may be able to help, so please get in touch if you need a hand with your insurance claims or finances.
If you are in possession of bank notes damaged by the bushfire, here are the steps to submit a claim for reimbursement.
I’ve put together four stories below about the revival of the property market, government aid for bushfire-affected businesses, the new first home buyer scheme, and identity theft to help you get ahead of your finances to start the year.
Property enjoyed strong recovery in late 2019
Property prices headed south in the first half of 2019, but bounced back big-time in the second half of the year.
The national median property price fell 6.9% in the 12 months prior to 30 June 2019, according to CoreLogic.
However, it rose 2.3% in 2019, thanks in large part to interest rate cuts in June, July and October.
Australia’s two biggest cities were mainly responsible for the big turnaround in the second half of 2019.
Sydney’s median price fell 9.9% in the year to 30 June, but rose 5.3% in the year to 31 December. Meanwhile, Melbourne fell 9.2% and rose 5.3% in the same period.
The Hobart and Canberra property markets are currently at record levels in terms of prices. However, the other six capitals are below their peaks:
Brisbane = 0.1% lower
Adelaide = 0.2% lower
Melbourne = 2.3% lower
Sydney = 6.4% lower
Perth = 21.4% lower
Darwin = 31.8% lower
First home buyers need to move fast
Want to participate in the federal government’s new first home buyer scheme? Then you better hurry.
The First Home Loan Deposit Scheme, which started on 1 January, is capped at 10,000 places per financial year. The first allocation of places have already been claimed; but 7,000 places will become available on 1 February.
Here’s how it works:
The government will guarantee your loan if you have a deposit of 5-19%
That means you won’t have to pay LMI (lender’s mortgage insurance)
Eligibility rules apply:
You must be a first home buyer
You must earn under $125,000 for singles and $200,000 for couples
Also, you must buy a property that costs less than the price threshold listed in the chart above.
5 ways to guard against identity theft
Having your identity stolen can be an expensive and traumatic experience.
Sadly, it’s impossible to completely eliminate the risk of identity theft. But you can minimise it by following these five steps from Equifax.
Put a security freeze on your credit file – this stops fraudsters taking out loans in your name (because you’d need to unfreeze the file before loans could be issued).
Check your credit report – you’re entitled to a free copy of your credit report each year. Get one, and then check for suspicious activity.
Check your bank statements – again, look for suspicious activity.
Guard against mail theft – lock your mailbox so fraudsters can’t steal sensitive documents.
Be vigilant when online – don’t share or reuse passwords. Don’t respond to ‘phishing’ emails.
Govt offers help to bushfire-affected businesses
Small businesses that have suffered damage in the bushfires may be eligible for four types of help from the federal government.
First, as part of the assistance package, eligible small businesses may be able to access up to $50,000 in tax-free grants.
Second, businesses that have suffered “significant asset loss or a significant loss of revenue” may be eligible for loans of up to $500,000:
Maximum term of 10 years
No interest for the first two years
Subsequent interest rate set at half the 10-year government bond rate (currently about 0.60%)
Third, the government will establish the Small Business Bushfire Financial Support Line:
Staff will explain what financial support is available to small businesses
Trained financial counselors will be available
Fourth, the Australian Taxation Office will help eligible businesses:
BAS deadline has been extended to 28 May 2020
Pay-as-you-go instalments can be changed to $0 for the December 2019 quarter
Refunds can be claimed for any instalments paid in the September 2019 quarter
If you would like to discuss how these may apply to you, please do not hesitate to get in touch.
Disclaimer: The advice provided in this article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. We encourage you to consult a finance professional before acting on any advice provided in this article or on this website.
