I think its inevitable that a substantial number of projects will be scaled back with some being cancelled/postponed until the fundamentals correct themselves.

We have seen softening commodity prices, with blowouts in capital expenditure from when projects were first planned.

People talk about a lot of the projects as certainties, when most haven’t even reached final sign-off. (speaking about the whole of Australia). It’s never to late for a company too back out of a project.

I think when you add up the time and travel costs of multiple family members, living further out can be a false economy anyway (especially as they are always increasing), your also generally further away from services too.

I think with the high uptake of foreigners and younger generations, many are used to/have resolved to living in higher density closer to the cbd's (not necessarily in the CBD). Maybe considering moving into a house come starting a family.

They prefer the convenience and cost advantages provided. A student/young professional just starting out, will find it hard to justify paying for a large yard/house when they will never be there or don't have the time to benefit from it anyway. Units/Apartments also require less of their attention too.

Even with kids some complexes actually would provide more room for your kids to play, and you could also prioritise being closer to parks/ovals too, even better if there are other kids in the complex too.

For me personally, its location first, accomodation second with cost ruling out some locations.

I think affordability will be a big determing factor going forward, most conventional houses will be priced out of the next generations hands, they will have to opt for smaller houses on smaller blocks, or apartment living unless they are willing to move further out.

I think this will see unit/apartment prices at least trend house prices.

Gen Y.

It's not really just a question of cost, but the stigma which will now be attached to the building.

This will likely mean future buyers being turned off.

It could also affect future valuation's which could affect future purchases getting finance to buy your property.

If there was a purchase for $650K last October, why are you offering $670K now? Is there evidence to show units have gone up in the area over that time? Are the units comparable?

http://www.ato.gov.au/corporate/content.aspx?doc=/content/86191.htm

6 Year rule maybe?

So if you lived in the property to start with yourself, you can then declare it a ppor which makes it Capital Gains tax exempt for upto 6 years from moving out, while still allowing you to claim all the normal deductions for a rental property for the period in which you are renting it out.

All the other details seemed fine.

His calculation for putting the money into the savings account is wrong because he forgot to add back the benefit from negative gearing.

$100,000 savings@6% interest p.a., and are at the marginal tax rate of 30%, then you would earn $6,000 per year, but then be taxed on $1,800 and be left with $4,200

Adding Negative Gearing Benefit, $6700 * 30% = $2010.

So Savings account option = $4,200 + $2,010 = $6,210.

So its $6,700 (Money in offset) vs $6,210 (Money in Savings).

The difference is however all to do with the difference in interest rates.

Don’t do that. No way would you invest with a loan of 14%.

Paying down your personal loan would be the best advice, it’s effectively a return of 14% risk free.

What if the property values went down or failed to keep up with the rate of interest, so the borrower went into negative equity?

Even if you got possesion of the properties, they wouldn’t cover what your owed? Better than nothing though I spose.

My concern is they are risking your money, so how motivated are they going to be to do due-dilligence/make sure its a sound deal.

As an individual a capital loss can only be offset by a capital gain, therefor when a capital loss is declared for a particular income year on your tax return. It must be carried forward to future year's where it can offset future Capital Gains.

E.G.

Say I bought an investment property in 2005-2006 (Financial Year) for $600,000. I then sold it in 2007-2008 (Financial Year) but only recieved $500,000. Therefore for the 2007-2008 (Financial Year) I would declare a Capital Loss of $100,000, which I would have to carry forward.

Now in the 2007-2008 (Financial Year) I bought another property for $400,000. And sold it in 2010-2011 (Financial Year) for $450,000. That is $50,000 in Capital Gains for which a 50% discount is applied (due to holding >12montsh), so $25,000.

Now when I sit down and do the tax that year I would declare a Capital Gain of $25,000. This would however be offset by the capital loss ($100,000) carried forward from previous years. So +$25,000 – $100,000 = -$75,000.
Therefor I pay no tax on the capital gain that year and continue to carry forward the new capital loss figure of $75,000.

Tax has already been paid on the gift, by the person giving the gift. They paid income tax on the income they have gifted to you.

A lot of people on this site are strictly "Property Investors", this is counter intuitive to good Financial Planning advice. Therefor it is no wonder that many would not seek the services of a Financial Planner (even a good one) as it doesn't gel with their mantra.

A financial planner should be looking at and giving weight to all investment classes.

The biggest problem for Financial Planners in my point of view, is the strength of Australian Property over the last 10+ years, a lot of people have done really well out of it and it's meant that a lot of people have forgotten all other asset classes and just choose to invest in property. A financial planner just can't add enough value in this area to make it worthwhile, any advice they did add is likely to be ignored by the majority anyway. 

While there has been some skill involved in investing in property over the last 10+ years, there also has been a lot of luck. We all know what happens when someone gets lucky to often over a long period of time, they begin to define it as the norm and look at it as a normal market characteristic or even begin to believe that they somehow greatly outskill the market. (Much like the way the GFC started).

If there is a slow down in property, or a lot of people get burnt. And property doesn't become such an obvious or the only choice in the future. Financial Planner's will be able to add a lot more value. At this time, I believe people will be much more satisfied to make payment for financial planning services. Obviously the industry has some cleaning up of its own to do first.