Ask Alan News

The Reserve Bank firmly backed itself into a corner of its own making yesterday, facing external pressure to cut rates.

One commentator noted (and I agree) that yesterday’s decision effectively undid the completely unnecessary rate hike of November 2023, which raised the cash rate from 4.10% to 4.35%.

At that time, the economy was already struggling, and the increase only added pain with zero benefit.

How does making you hand over more money to a bank reduce spending pressure? (And this isn’t just me saying it—it’s a point raised by commentators.) Especially when we’re dealing with:

• A broken insurance market – where skyrocketing house insurance premiums are forcing some people to go uninsured just to afford groceries.
• A broken electricity market – where, despite promises of $275 cheaper bills, costs have risen by $1,000, artificially propped up by $300 government handouts.

2025 is a year that contains some absolute certainties, making it one of the easiest in recent times for planning.

That said, even though most people crave certainty—even when it stares them in the face and yells loudly in their ear—many still seek that ever-elusive “one more” piece of information and fail to take action. Most people spend their lives frozen by the fear of making a mistake…

Even though they’ve heard this truth:

“People who have never made a mistake have never made anything.”

So, what are these absolute certainties?

• There will be an election in the first half of the year—100%.
• Interest rates will fall at some stage this year—that is as close to 100% as possible.
• As a country, affordability will remain an issue.
• And here’s an intriguing one: Melbourne is currently the third cheapest capital city in Australia, which seems inherently wrong.
• Most people will do nothing.

As an aside, I once built the largest franchise that Mortgage Choice ever had in Australia—an incontestable fact. (Not anymore… that phase of my business life is long gone.)

I spotted opportunities before events unfolded and took action—most franchisees didn’t.

They would ask, “But how did you know?” And my answer, then as now, is:

“It was written on GIANT billboards for everyone to see.”

Yet most people drive right past these giant billboards—they are there to be seen, but for many, they are invisible.

I have written five giant billboards above… and the fifth presents an incredible opportunity for the few who read and have the courage to act.

An Election

I have no stated interest in its outcome—that is for all 27 million of us to privately decide. BUT… it is a FACT that during election periods, housing markets are subdued as most people freeze in “wait-and-see” mode.

Waiting for what, exactly?

In the mainstream, elections rarely make the sweeping changes that self-important politicians promise. One issue this year is significant—our electricity grid and its future direction. My specialist training in physics helps me understand its importance, but it is a 50-year issue. It may not even affect your lifetime. While it is a crucial technical matter, it has no direct or immediate effect on housing.

Election periods create a unique opportunity to take a step forward while most people stand still.

Interest Rates

Inflation is in a strange spot—two numbers were released last week. One shows inflation in the low 2s, which would prompt the Reserve Bank to cut rates. The other is in the low 3s, which would not.

The difference? The government’s carefully calibrated $275 per quarter energy bill relief—for four quarters. And when does it end? The election!

The government has openly stated that they were gaming the system to artificially lower the inflation rate in hopes that the Reserve Bank would act. However, the Reserve has made it clear it looks past such manipulation, stating that unless that government payment continues indefinitely, inflation will snap back to the low 3s.

Analysts are debating: Will the Reserve Bank focus on the 2s, or give more weight to the 3s? Will they cut rates or hold firm?

At an individual level, this matters to borrowers. But the certainty, as it was last year, is that rates are not going up. Any decisions you want to make can be made with as close to certain confidence as possible.

Affordability

Even if rates go down and home loan relief occurs, the things that have skyrocketed in price over the past few years are not coming down.

What does this mean?

Housing has shown clear signs of hitting affordability ceilings. Some heat has come out of the market, and conditions have shifted in favor of buyers—meaning opportunity exists again.

Melbourne

The city that endured the world’s longest COVID lockdown racked up the world’s largest COVID debt. The Victorian government decided that investors would shoulder that debt—through land tax, vacant property tax, and casual rent tax (Airbnb).

As a result, Melbourne now has the highest percentage of investment property listings in the country, as investors head for the exits—with very few stepping in.

Melbourne has fallen from its natural place as the 2nd highest-priced housing market in Australia to the 3rd lowest.

Governments don’t last forever. Policies that create perverse outcomes always change. There’s a billboard-sized opportunity here.

I have access to trusted contacts in Melbourne if you’re interested.

Behavior

Because most people do nothing…

There’s an old saying:

“Some people make things happen, some watch things happen, and after the event, most say, ‘WTF happened?’”

I’m not here to change behavior or even attempt to. I am simply saying: for the astute, these billboards are there to be read.

Happy 2025!

I’ll write again next week.

In the meantime, if you’d like advice tailored to your personal circumstances, please call or email me anytime.

That’s what I’m here for.

Ask Alan, Mortgage Broker Brisbane

So .. You’d like to apply for a loan!

Here are the steps to get started – and best of all – I am here as your personal guide to get you though.

Once you get through the early stages real Alan will take over.

First – you need to create a log in to get through to the Forms Page.

Click the above link or the log in page is easily found on the right side of the horizontal main menu.

If it’s your first time – you will need to register and create an account: Register a new account

Once logged in the very first question is are you applying..

·      On your own? – use the Single Applicant form

·      With someone else? – use the Joint Applicant form

·      Or as a corporate entity? (If as a corporate entity you will use the Joint Applicant form)

There are THREE forms and Alan needs them all:

·      Single or Joint Application form – Alan reads this carefully to work out what he needs to ask for next.

·      Expenses – an essential legal requirement these days – so we know roughly what it costs to run your life.

·      Loan Preferences – another sensible requirement so that Alan can match the best options to your own stated needs.

A couple of common questions and corresponding handy hints:

·      In the Application forms – when you get to liabilities – include all liabilities even if they are in your business name – because you are still liable for them personally.

·      For Expenses – don’t think too much – your best guess is fine and the frequency that comes to mind – eg council rates – $2000 and pick “per year”. Mobile phone might be $40 and “per month”. You don’t have be 100% accurate – Alan just needs your best estimates.

Before you finish and submit:

·      The SAVE function – makes sure your information is there for next time.

·      The SUBMIT function – is what emails this information to Alan.

You must SAVE and separately SUBMIT.

Now – if you are returning for a subsequent time – log in to get to the Forms page.

You still need to fill in all three forms BUT – when you click on the form you need you can find your most recent previous saved form in the table at the top of the form.

EDIT …. SAVE … SUBMIT

Once Alan has your forms – I fade away and Real Alan takes over – he reads carefully and then sends you a document list he needs to work out borrowing power and the best options to match your needs with lenders and loan products

Finally – privacy and data security is very important and the Ask Alan policy is one of mutual responsibility in which you as Alan’s client have total control.

If you want your data deleted – just ask and it is not saved.

BUT – that means there is nothing when you return and you must start again each time.

Ask Alan systems are encrypted and highly secure – so you can have confidence in opting for convenience in storing it there for next time, but if you feel more comfortable – just ask and it will be deleted.

There are three people who can help you with forms

·      Me – iAlan – just ask me for help in my pop up in the bottom right hand corner of your screen.

·      Real Alan – I can put you in contact, click here to send him an email.

·      Real Helen – Alan’s real IT / admin support person, click here to send her an email.

What is the biggest home loan risk facing most Australians today?

We can all accept that we will likely retire later than we once thought. Although maintaining purpose and income for longer is not all bad. Especially if you have taken the time now to invest in your own future retirement.

30-year home loans – by universal policy – are aimed to end at age 70.

Falling across the finish with your home paid off and maybe half a million in super will not give you a comfortable future.

I think it’s possible that the cost of living “crisis” is being a bit overplayed these days. Yes, everything costs more – insurance, electricity, education, food…