Best wishes for 2009 & farewell!
by Jennifer Nielsen, CEO, Loan Market Group

Happy New Year!! As we all return to work and our post-Christmas credit card bills, now is a good time to bear in mind that your home loan isn't the only interest rate you might be able to negotiate. Check the interest rate you are paying on your card, talk to your lender and see if they will give you a better rate, and if not, look elsewhere. Of course, if you have a mortgage and equity in your property, transfer the debt to your lower priced home loan and cut up your card for a while!

This newsletter will be my last with you at the Loan Market Group as I hand over to John Kolenda, Executive Director and move into a role with the Ray White Group. Thank you all for your generous support over the years and best wishes for the best of success in the future!

2009 showing early signs of promise
by John Kolenda, Executive Director

2009 will be one of the best years in history to venture into the property market. The combination of low interest rates, softer property prices and government incentives made the housing market particularly appealing, especially for first time buyers and the opportunities for first home buyers are unprecedented.

The official cash rate is down to 4.5 per cent and mortgage holders in the coming year are likely to benefit from the lowest variable interest rates ever offered in Australia as the cash rate could fall to as low as 2.5 per cent.

With concessions continuing for the first half of 2009 we also expect to see home mortgage rates fall further, encouraging investors to join the first home buyer queues.

Speaking of first home buyers, click the Play button below to view Loan Market's new television campaign, launched this week!

PAYG and ATO payments – think carefully!
by Arthur Kassos, CPA

The government’s offer to defer the December quarter payment of 20% of your PAYG Instalment until June 2009 will help many businesses. But it will only really help if that money is properly utilised (i.e. reduce a loan account and redraw it in June to pay your tax), otherwise you may end up with a double whammy when you get your June 2009 PAYG Instalment if you haven’t set the extra money aside.

Also, on the matter of taxes, if you are one of the many taxpayers who owes the Australian Taxation Office (ATO) money then be prepared for a call or a letter from a debt collection agency. The ATO is now using private firms to help collect the millions of dollars in outstanding debt from taxpayers. If you are one of the many taxpayers in this situation or you are going to be late to lodge your BAS, Income Tax Return or any other statutory requirement and / or late to pay your debt, then call the ATO to arrange an alternative plan.

You should also be aware that the ATO has many benchmarking processes that classify expected ranges of income for various industries including the taxi industry and building industry contractors such as concreters. These benchmarks can be found on the ATO website and should be perused to give you an idea of what other people in your particular industry or field are doing. If you fall outside these parameters (especially negatively) you should review your business and see what you can do to improve your situation and in turn save yourself a visit from the ATO.

If you have any tax questions you can email me at info@akcpa.com.au

What is Market Depth?
by Colin Nicholson

I once heard a new investor ask whether the term market depth meant a way to measure whether he was out of his depth on the stock market! The real answer is quite different and, like most market jargon, is simple if explained in plain English.

It does however have something to do with safety in the market. If you want to buy some shares, you would like to know that there was plenty of liquidity in the market. This means there are plenty of buying and selling orders at various price levels in the market and that the number of shares available to buy or sell is more than adequate for you to get in and out.

This is what we mean when we talk about the depth of a market. We are referring to the volume of buy and sell orders in the market. However, it is not the number of buying and selling orders that is important. It is the total number of shares that buyers want to buy at various prices and the number of shares that sellers want to sell at various prices.

Now some more jargon. Buying orders are called bids. A bid is a number of shares for which a seller is sought at a given price. Selling orders are called offers. An offer is a number of shares for which a buyer is sought at a given price. When there are plenty of bids and offers for substantial numbers of shares, the market is said to have good depth. It is a liquid market.

When you come to buy shares on the internet, you will have access to a market depth screen on your stock broker’s web site. The market depth screen will arrange all the bids, or buying orders, on the left with the highest price bid at the top and the lowest price bid at the bottom. Then the offers will be arranged on the right with the lowest price offered at the top and the highest price offered at the bottom.

In this way, you will be able to see instantly at the top of the depth screen the best bid and the best offer. You see the number of shares bid and offered at those prices. In a deep liquid market, there will not be a very big spread. A spread is a jargon term for the difference in price between the best bid and the best offer. By being able to see the orders below the best ones, you will also be able to assess at what price you will be able to transact your order.

Colin Nicholson has written four books: The Aggressive Investor, The Psychology of Investing, Hot Stocks 2007 and Hot Stocks 2008. Contact him at colin@bwts.com.au or through his web site www.bwts.com.au, where you may join the list to receive his free email newsletter.

New market direction in 2009
by Greville Pabst, CEO, WBP Property Group

The September quarter ushered in a welcome reprieve from a turbulent stretch in 2008. The ray of sunshine for Australian investors and home owners has come in the form of cuts to official interest rates totaling three per cent, as well as initiatives including the Federal Government stimulus package aimed at families, first home buyers and pensioners.

Despite varied opinion, general consensus seems to suggest consumer confidence improved leading into the Christmas period, irrespective of continued financial uncertainty in the Australian market and threats to job security.

This is good news for the national property market, which has taken a significant hit in recent months. The period between July and November saw record low stock levels in both Sydney and Melbourne, resulting in a 50% reduction in average sales volumes compared to the same period in 2007.

Despite only minimal increases in clearance rates, interest in the property market began to pick up in November.

The doubling of the First Home Buyers Grant by the federal government has seen first home buyers flooding back to the market. The boost to the grant, supported by falling interest rates, is encouraging to potential buyers who are looking to exit the rent rut where the costs of owning your own house and renting one are frighteningly comparable. A tightening rental market means that rental rates will continue to climb - a great incentive to buy.

Interestingly, research indicates that over the past few months, investors have been abandoning the higher end of the property market where growth has witnessed significant decline. They are now vying for lower-end stock, where rental yields offer more stable returns. This means investors will be competing directly with the first home buyer segment, which will translate into improved market activity in January and February.

The property market in 2009 will be further supported by the national housing shortage, which predicts demand of 200,000, a short fall of around 50,000 from the current supply. Although 2009 is unlikely to see any significant growth in property values, given these factors, it will see increased activity as consumer sentiment continues to strengthen.

5 reasons to invest in 2009
by Defence Housing Australia

Last year we saw international markets plummet and Australia’s economy waiver slightly, but with 2008 now behind us, if you are thinking of investing at all, 2009 will be a year of opportunities galore!

Driven by underlying demand and supply shortages, experts suggest residential property is less at risk in the current economic climate than any other investment or asset class.

Here are five reasons why your New Years resolutions should include expanding your investment property portfolio with Defence Housing Australia (DHA).

1. Capital growth
   You don’t gain capital growth by putting your money in the bank or investing in fixed interest. In contrast, when you purchase property, you expect that the underlying value of your asset will grow; especially if you buy in a good location to maximise your returns.
2. Rental income
   Unlike other asset classes, such as shares, when you purchase an investment property, you may receive income straight away and with DHA that income is guaranteed for the life of the lease. Further, demand for residential property is extremely high due to restricted supply and strong population growth, and vacancy rates are already at historic lows, forcing gross rental yields to around 5%.
3. Taxation benefits
   You should never buy an investment property just for tax purposes, but depending on your financial situation, the benefits can be lucrative. You may be able to claim a number of expenses related to the investment as deductions, and depreciate the building and its fixtures and fittings. Like DHA, some developers may provide a tax compliant depreciation schedule to assist you to maximise your deductions. If not, you should seek professional financial advice.
4. Greater degree of control
   While the performance of any investment is not guaranteed, a bricks and mortar investment may provide you greater control than other assets. Investments like a DHA property have the assurance of a long term lease, high calibre tenants, monthly rental payments with annual reviews, hassle-free property management and maintenance for a single fee, and recarpeting and repainting at lease end.
5. Timing is ripe
   Australia has experienced significant decreases in the official cash rate in recent months, with further deductions predicted in 2009. This is likely to result in a significant increase in demand for property in the near future, and those that act quickly will have a real head-start on the rest of the market.

For more information about DHA invest, please visit the invest website or contact a sales consultant by calling 133 DHA (342) today.

Note: Every attempt has been made to ensure the accuracy of this information at the date of publication; however information supplied is intended as a general guide only. Prospective investors should seek independent professional advice; and make and rely upon their own assessment of the risks prior to purchasing.

Serving size - what's acceptable?
by Judy Davie

Many people who eat well still struggle with weight loss because they eat too much. One way to combat this is to make sure your serving sizes are within the required guidelines - not too big, and not too small.

Eat more vegetables than any other foods (at least 5 serves) and 2 serves of fresh fruit a day.

Make a point of keeping cup and spoon measures within reach, as it's easy to use more oil or pour in more breakfast cereal than needed. An extra tablespoon of unnecessary oil clocks an extra 670 kJ to the meal.

The amount that you eat within each food category depends on your daily level of activity, current body size and weight requirements (to gain, lose or maintain).

Visit www.thefoodcoach.com.au

Competition winners

MBT swiss health shoes winner
The lucky winner was Louise Sullivan of NSW.

12 Days of Christmas
Thank you very much to all our competition sponsors with all those fantastic prizes and thank you to everyone who entered the competition. Below is a list of the prizes and the lucky winners!