Before you read any further it\u2019s important that you take the time to dial up Bobby McFerrin on You Tube and get into the reggae groove.\u00a0 The following will simply not work otherwise!<\/p>\n
Here\u2019s a little song I wrote<\/em><\/p>\n You might want to sing it note for note<\/em><\/p>\n Don\u2019t worry, be happy<\/em><\/p>\n Some say credit crunch<\/em><\/p>\n I say bugger that, let\u2019s do a long lunch<\/em><\/p>\n Don\u2019t worry, be happy<\/em><\/p>\n In your loan application, there is some trouble<\/em><\/p>\n Royal Commission might make it double<\/em><\/p>\n Don\u2019t Worry, Be Happy<\/em><\/p>\n Ain\u2019t got no cash or equity<\/em><\/p>\n You can always call on me<\/em><\/p>\n Don\u2019t worry, be happy.<\/em><\/p>\n With apologies to Bobby McFerrin \u201cDon\u2019t Worry Be Happy\u201d (released 1988)<\/p>\n Interestingly enough, the Indian mystic Maher Baba (1894-1969) often used the expression Don\u2019t Worry, Be Happy.\u00a0 The expression has a certain simplicity and charm that resonates, particularly in these interesting times.<\/p>\n We move on. \u00a0I\u2019ve had a bit of writers block this month and the deadline looms.\u00a0 Given my predicament I reached out to my colleagues here at Mike Phipps Finance for inspiration.\u00a0 They replied as if with one voice\u2026\u2026. for god\u2019s sake Mike, say something positive for once!\u00a0 Hmmm, have I really been that negative of late.\u00a0 A quick review of past pronouncements suggests perhaps I have.\u00a0 Depressing really.<\/p>\n I\u2019ve always felt that as a finance observer my job is to be the lighthouse, warning of impending danger and possible wreckage.\u00a0 It\u2019s a pretty easy gig given the challenges that we all face on a daily basis but it\u2019s also a bit of a trap. \u00a0The fact is that things are actually going Ok and could be a hell of lot worse.\u00a0 If your job is primarily to warn of the danger of being dashed on the rocks it\u2019s easy to miss the calm seas, beautiful sunsets and bracing morning breezes.\u00a0 Jeez, I am in danger of lapsing into poetic clich\u00e9 but you get the drift.<\/p>\n Anyway, I have decided to try and find a few positives to talk about this month.\u00a0 To quote one of my favourite musicians Mr Ian Dury,\u00a0 I am going to look for reasons to be cheerful.\u00a0 Never heard of him?\u00a0 Look him up on You Tube, a dead set genius!\u00a0 A warning though, not for the faint of heart lyrically.<\/p>\n <\/p>\n Let\u2019s start with the Banking Royal Commission.\u00a0 After a very gloomy few days post presentation of the final report it is now becoming clear that the politicians and policy makers have woken up to the possible catastrophic consequences of some of the report\u2019s recommendations. \u00a0Obviously as a finance broker I am delighted that both sides of the political divide have signalled that recommendations to kill the finance broking model and give all the power back to the banks will not be implemented. \u00a0I also note that the more savvy politicians have realized that making credit compliance too difficult will simply lead to a credit crunch we don\u2019t need to have.\u00a0 Already we are seeing signs that the knee jerk reactions to the royal commission report are being tempered by reasoned common sense.\u00a0 Nobody wants the housing market to tank, least of all those who rely on the votes of those same home owners and aspirational buyers. \u00a0It\u2019s also very clear that while a certain sort of person begrudges bank profits those same profits make a substantial contribution to super fund returns, employment and taxation contributions. \u00a0I suspect the broader population will start to appreciate a robust banking sector as the industry is better understood through the current public discussions. I\u2019ve always had a concern that the average punter simply does not understand banking and finance. Certainly, we spend a significant amount of time educating clients. The current discussions around financial literacy and consumer education are very welcome if long overdue.\u00a0 Wouldn\u2019t it be great to get to a day where no one said \u201cThe bank shouldn\u2019t have lent me that money, they should have known I couldn\u2019t repay it\u201d because the borrower could work it out for themselves.<\/p>\n In the commercial and business finance space the review of the banking sector looks to have shone a much-needed light on the availability of credit to small business.\u00a0 The current discussion around bank support for small business, credit conditions and interest rates is good news for the accommodation sector.\u00a0 Remember, the definition of a small business in Australia is generally accepted as being a business with less than 15 employees and a turnover of less that $2M.\u00a0 That\u2019s the vast majority of management rights, motel and caravan park operators.<\/p>\n It is true that finance is taking longer but here\u2019s the thing.\u00a0 The time frames have little to do with the banks credit appetites which remain strong.\u00a0 The greatest impact on finance time frames seems to be a lack of supporting staff for specialists within the banks.\u00a0 The commercial reality is that we gravitate toward bankers who know what they are doing.\u00a0 As a result, they get snowed under and time frames blow out.\u00a0 Banks are notoriously slow to increase support in these instances and no surprise where we end up. I think it\u2019s important not to interpret slower credit approval time frames with diminished credit appetites.\u00a0 In fact, sometimes the inverse is actually the case.<\/p>\n Our experience is that properly qualified buyers are getting finance approved, simple as that.<\/p>\n On the political front I think we can also find some silver linings in apparent unhappy news. Let\u2019s take negative gearing and CGT as an example. It seems that there is a chance that tax benefits relating to interest costs and capital gains may be reduced depending on who gets in at the next election.\u00a0 I expect that one of the outcomes of such changes may well be increased incentives for investors to retain their investment units and not sell until retirement benefits can be accessed. Certainly, if negative gearing and CGT are grandfathered I cant\u2019s see a rush to sell the assets that accrue these benefits.\u00a0 If you\u2019ve got a stack of investors in your letting pool maybe good news indeed.<\/p>\n There\u2019s also talk of a relaunch of some form of social housing, maybe NRAS MK2.\u00a0 From a permanent letting viewpoint I would argue that potentially the safest and most profitable unit in any letting pool is an NRAS unit. With any luck a relaunch of such a scheme will drive investment and assist management rights operators to ensure higher occupancies and very low loss of unit risk.\u00a0 Watch this space, I am certain it\u2019s coming.<\/p>\n While on the subject of unit investment, current signs suggest that the predicted catastrophic oversupply of new units in Brisbane has failed to eventuate.\u00a0 To be sure some values are down a bit and there\u2019s certainly some developer stock overhang, but the supply cycle appears to have experienced a pretty soft landing.\u00a0 It\u2019s true that the outcomes of some limits on interest only lending and foreign purchaser finance are yet to fully play out but I think it\u2019s fair to say we don\u2019t have blood in the streets.\u00a0 I suspect population increases, demand by young adults leaving home (do they ever leave?) and a slowdown in new developments will contribute to reasonable uptake and the afore mentioned soft landing.<\/p>\n In the accommodation sector I think our shared regimented processes and tight industry professionals\u2019 groups have contributed to a steady ship and ongoing confidence from banks and buyers. We don\u2019t have too many cowboys (or girls) in our industry, and we enjoy the support of a very robust industry body in ARAMA.<\/p>\n Finally, and unlike most industries, when we all see a problem emerging, we discuss it and resolve to ensure it doesn\u2019t blow up.\u00a0 That\u2019s a sign of an engaged, mature and professional industry.<\/p>\n Don\u2019t worry, be happy.<\/p>\n <\/p>\n PS :\u00a0 Most of you will know how much I love quoting Winston Churchill.\u00a0 Here\u2019s Winston on happiness:<\/p>\n \u201cThe way to achieve happiness is to try for perfection that is impossible to achieve, and spend the rest of your life trying to achieve it.\u201d<\/em><\/p>\n Sorry Winston, sounds like a good way to send yourself insane!<\/p>\n","protected":false},"excerpt":{"rendered":" Before you read any further it\u2019s important that you take the time to dial up Bobby McFerrin on You Tube and get into the reggae groove.\u00a0 The following will simply not work otherwise! Here\u2019s a little song I wrote You might want to sing it note for note Don\u2019t worry, be happy Some say credit crunch I say bugger that, let\u2019s do a long lunch Don\u2019t worry, be happy In your loan application, there is some trouble Royal Commission might make it double Don\u2019t Worry, Be Happy Ain\u2019t got no cash or equity You can always call on me Don\u2019t worry, be happy. With apologiesRead More →<\/a><\/p>\n","protected":false},"author":1046,"featured_media":1306,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mbp_gutenberg_autopost":false},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/1305"}],"collection":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/users\/1046"}],"replies":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/comments?post=1305"}],"version-history":[{"count":1,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/1305\/revisions"}],"predecessor-version":[{"id":1307,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/1305\/revisions\/1307"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media\/1306"}],"wp:attachment":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media?parent=1305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/categories?post=1305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/tags?post=1305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}