Small businesses are suffering harm from Facebook, LinkedIn and other social media platforms, according to a new report from the Australian Competition & Consumer Commission (ACCC).

The report, which examined how consumers and businesses interact with social media services, found evidence of:

 

ACCC Chair Gina Cass-Gottlieb said the consumer watchdog was concerned about the level of influence social media platforms held over users and their position as critical intermediaries for businesses to reach customers.

“Limited competition in these services can lead to poorer outcomes for consumers and small businesses,” she said

“Where there are few comparable alternatives available, consumers feel compelled to use a service because their social, family or work networks are on them. This creates a ‘take-it-or-leave-it’ situation which can result in consumers accepting unwanted collection and use of their data.”

 

As a result, the ACCC has recommended establishing:

 

Ombudsman calls for reform

Australia’s Small Business and Family Enterprise Ombudsman, Bruce Billson, echoed the call for social media platforms to dramatically improve their dispute resolution processes for small business.

“We’re arguing for a policy change and for dispute resolution agency support like what we provide, to equip small and family businesses with the tools to protect themselves,” he said.

“When small businesses turn to us for assistance, our contact with the digital platforms is generally constructive and most have provided us with a direct human contact to enable these disputes to be escalated and a satisfactory outcome achieved quickly.

“However, the need for a government body to step in to resolve every small business dispute is not the answer and should be the exception.”

HECS-HELP student debt will rise by 7.1% on June 1, in line with the latest inflation rate.

That reflects the recent surge in inflation – the increase was only 3.9% in 2022 and 0.6% in 2021.

The Australian Taxation Office (ATO) has advised people to move fast if they want to reduce their loan balances by making voluntary payments ahead of the indexation change.

“If you intend to make a voluntary repayment before indexation is applied, it is important to allow enough time for the payment to be received and processed by us before 1 June,” according to the ATO.

 

How student debt impacts mortgage applications

When you apply for a home loan, lenders look at all your liabilities – including your student debt – when deciding whether to approve your application, and how much to lend you.

The higher your HECS-HELP balance, the more critically lenders will assess your application, because every dollar the government garnishees from your salary to repay your student debt is one less dollar you can devote to paying down a mortgage.

That said, making voluntary repayments on your HECS-HELP debt won’t necessarily improve your situation, because it will reduce the amount of money you can contribute to a deposit.

So if you have student debt and you’re thinking about buying a property, it would be a good idea to get professional guidance around how to manage your repayments.

Please contact me ahead of time and I’ll be happy to model a range of scenarios for you. Different lenders assess HECS-HELP debt differently, which means you might have several different options to choose from.

This is a pretty good time to be a first-home buyer, according to one of Australia’s leading property economists.

Ray White Group Chief Economist Nerida Conisbee said there are four things in favour of first-home buyers right now:

 

That said, Ms Conisbee also noted that first-home buyers faced three main challenges:

 

Still, more first-home buyers are overcoming these challenges and getting into the market, Ms Conisbee said, citing Australian Bureau of Statistics data.

“After hitting an almost record high in January 2021, the number of first-home buyers more than halved,” she said.

“However, in March [the most recent month for which we have data] we saw a tentative return with the number increasing by 15% in one month. The number of first-home buyers is still at very low levels but they do seem to be returning.”

 

First-home buyers receive budget boost

Ms Conisbee said measures announced in the recent Federal Budget were a further boost to first-home buyers, with both the First Home Guarantee and Regional First Home Buyer Guarantee being expanded.

From 1 July 2023, friends, siblings and other family members will be eligible for joint applications under these schemes – previously, they were limited to singles or couples (whether married or in a de-facto relationship).

The First Home Guarantee is open to 35,000 eligible first home buyers each financial year and the Regional First Home Buyer Guarantee to 10,000. 

Under these schemes, eligible first-home buyers can enter the market with just a 5% deposit, without having to pay lender’s mortgage insurance.

Contact me if you want to buy your first home, or help one of your children do so. I’ll explain your options in simple terms, let you know whether you’re eligible for government assistance and compare home loans on your behalf.

Refinancing cashback deals may become a thing of the past, after several big banks and smaller lenders, including Commonwealth Bank, NAB and Bankwest, announced they planned to phase out the incentive.

Now that some institutions have made the first move, it wouldn’t be surprising if other lenders followed suit, because cashback deals can have more downside than upside, for both lenders and borrowers.

Some lenders started offering cashback in previous years to differentiate themselves from their rivals and attract more refinancers. But once other lenders copied them, cashback ceased to be a point of difference and instead became an extra cost of doing business.

Surprisingly, though, borrowers could also benefit. That’s because cashback can be a false benefit, because lenders presumably pass on the cost to customers through higher rates or fees. Also, cashback can make it harder to weigh up the pros and cons of different loans, because you need to calculate how a loan’s upfront incentive fits in with its long-term value.

 

Expert guidance from a trusted broker

Regardless of what happens with cashback, my role as your broker – which is to help you compare thousands of loans from dozens of lenders – remains unchanged.

I’ll crunch the numbers on your behalf, so you understand both the short-term and long-term implications of your options, and make expert recommendations.

Once you’ve chosen your preferred loan, I’ll manage the application process, saving you time and stress.

Get in touch if you’d like to get the ball rolling on a new loan or a refinance.

Seventeen banks – including the big four – have signed up to a “near real-time reporting” system that is designed to reduce scam activity.

The Fraud Reporting Exchange (FRX) will give the participating banks a way to quickly communicate with each other as fraudulent payments are transferred from one institution to another.

That is expected to increase the likelihood of fraudulent payments being frozen and the funds being returned.

“Given every minute can be crucial in disrupting scams, the launch of the FRX is a major development,” Australian Banking Association Chief Executive Anna Bligh said.

“It means more and more scammers are going to hit a brick wall and adds to the arsenal of anti-scam initiatives under way.”

 

How to protect yourself from scams

Despite the introduction of the FRX, Ms Bligh said consumers still had a role to play in preventing scams – including by reporting fraudulent payments to their bank as soon as possible.

“The sooner that banks know about a fraud, the sooner they can take swift action to try to halt the payment before it gets to the scammers,” she said.

Australians lost a record $3.1 billion to scams in 2022, according to Scamwatch, which was 80% higher than the year before.

 

Scamwatch’s top three tips for protecting yourself are:

You may have heard the Federal Government last night handed down its 2023/24 Federal Budget. Federal Treasurer Jim Chalmers’ Budget included a number of measures aimed at easing the cost-of-living pressures and improving housing affordability.

The challenge the Treasurer faced was to ease pressure many Australians are facing in covering increasing costs without adding to the rising inflation, which was at 7% in the March quarter.

We wanted to highlight the key points from the Budget that may impact you from 1 July.

First-home buyers

The Home Guarantee Scheme, where the Government guarantees the loans of eligible first-home buyers with a deposit under 20%, has been expanded. It will expand its criteria to enable more people to qualify including permanent residents, non-couple joint applications, previous home owners and more single guardians.

We can help determine if you are eligible and help you find the right loan.

Home owners

While electricity costs are increasing, the Government is encouraging homeowners to make their homes greener. It is offering 110,000 low-cost loans through private lenders to people looking to make their home more energy efficient. This could include solar panels, insulation, double-glazing windows and more. 

We can help determine if you are eligible and find the right loan for you.

Renters

Increased international migration and a decrease in investors has led to a shortage in properties to rent. In a bid to increase supply, the Government is changing the way it taxes build-to-rent developments. These developments usually have corporate ownership and are much more common overseas. The change is expected to add 150,000 rental apartments over the next decade.

Commonwealth rent assistance is increasing for people on low incomes. Over one million people will receive a 15% increase in their fortnightly payment (up to $31). There will also be a boost to affordable and social housing through the National Housing Finance and Investment Corporation (NHFIC).

Cost of living relief

Mr Chalmers said more than 5 million households will receive up to $500 deduction from the power bills in the next financial year. This is applied directly, resulting in you receiving the already lowered bill.

Families that use childcare may also receive a boost to subsidies. Families earning less than $80,000 per year may receive up to a 90% subsidy, with the rate progressively falling for families with an income above this.

People on Jobseeker will receive an increase of $40 per fortnight, and people aged between 55-59 will receive an additional $92.10. Austudy and Youth Allowance will also increase $40 per fortnight. Single parents receiving the single parenting payment may be eligible to receive support for longer with the Government increasing the age of the child from eight to 14.

The Reserve Bank of Australia (RBA) today announced the cash rate will move by .25 percentage points to 3.85%. 

This follows the release of inflationary data last week that showed annual inflation had cooled slightly in the March quarter (7%) compared to the December quarter (7.8%).

While many homeowners across the country have been impacted by the changing cash rate, has it impacted other people with other loans, such as a car loan? The answer is – it depends.

How does the cash rate impact car and personal loans?

The cash rate is the rate charged for banks and lenders to borrow and lend cash from one another overnight. This is then used as a benchmark for lenders to charge for interest rates on their own products, including home, personal and car loans as well as savings accounts. This means that as the cash rate increases, often the interest rates set by the banks and lenders also increase across their products.

Will I need to pay more for my car or personal loan?

If you already have a car or personal loan, you will only notice a difference if you have a variable rate. When the cash rate increases, it is likely your lender will also increase its interest rates meaning your repayments will increase. If you are on a fixed rate, your repayments will not change until your fixed-rate period ends.

If you are considering taking out a personal or car loan, the increased interest rates across the board mean it is important to compare lenders to find the right product that offers a competitive rate. If you have a home loan and have grown your equity, you may be able to refinance to access the funds you need to purchase a new car. I can have a look at your situation to recommend a strategy or shortlist of products that are right for you.

What can I do if my repayments increase?

Increasing repayments can put strain on your household budget, but there are steps you can take to see if you can limit the impact. Some options to consider include:

What can I do if my fixed rate is due to expire?

If your fixed rate is due to expire in the coming months, it is a good idea to compare the variable rate it will roll into to other products on the market. This is because the variable rate may not be the most competitive and the loan may not be ideally structured for your goals. I can compare loans on your behalf to let you know if you could be better off with another lender, or negotiate with your current lender.

A total of $4.74 billion of commercial property transactions were conducted in the first quarter of 2023, 68.2% lower than the year before, according to data from Real Capital Analytics and Ray White.

Ray White Commercial Head of Research Vanessa Rader said “a combination of rapidly rising interest rates, difficulty in obtaining finance and sentiment shifts” had caused both vendors and buyers to “delay property decisions until greater economic and market certainty arrives”.

The breakdown of commercial transactions was:

Changing market reflects changing finance conditions

Ms Rader, who is one of Australia’s leading commercial property experts, said the commercial downturn followed two years of strong sales volumes, which were in part caused by “historic low interest rates and availability of finance”.

During that period, strong income gains for some asset classes also saw an increase in purchasers entering the market.

“As conditions have changed, we have seen many less experienced buyers leave the market, and many opportunistic investors jump,” she said.

“These buyers are moving with less urgency or are seeking out distressed assets or value-add opportunities at the right price. As a result, we expect to see volume this year remain subdued, while REITs [real estate investment trusts], funds and offshore buyers are likely to proceed with caution given the global banking turmoil which continues to unfold.”

WA supplants Queensland as number three market

Western Australia was the biggest market mover between the March quarters of 2022 and 2023, and became the third most popular state in which to invest, according to Ms Rader.

“We have seen a number of local, interstate and international buyers look to Western Australia and its economic strength and affordable price point as a market to speculate in,” she said.

“While Western Australia has recorded a major retail transaction propping up these numbers, strong population gains have resulted in improvements in occupancy for office and industrial assets, while an uptick in tourism has also seen hotel and retail assets grow in popularity with the expectation of future income return movements.”

I can help you buy a commercial property, whether you want to invest locally or interstate. Call or email me if you’d like to discuss how to finance the purchase.

The business sector has a stronger balance sheet than before the pandemic, according to the Reserve Bank of Australia’s (RBA) latest Financial Stability Review.

That finding was based on a study of non-financial businesses’ balance sheets over the three years to June 2022, the most recent period for which the RBA had data.

“Aggregate leverage (measured by the debt-to-assets ratio) continued to decline, while cash buffers (measured by the ratio of cash holdings to total assets) increased further,” according to the Financial Stability Review.

“However, the rate of accumulation of cash buffers has slowed since early in the pandemic and has been distributed unevenly across businesses. Data on bank deposits suggest that larger businesses’ cash buffers have expanded by proportionally more than those of smaller businesses.”

Most businesses meeting their borrowing commitments

The Financial Stability Review also reported that indebted small businesses were more exposed to higher interest rates than larger businesses.

That’s because about half of small business lending was collateralised with a residential mortgage, and most of those loans were on variable rates.

That said, the non-performing share of banks’ business loans remained low.

Also, unlike the household sector, small businesses were not being threatened by a ‘fixed-rate cliff’, in which a large and concentrated volume of fixed-rate loans was about to expire.

“Although fixed-rate loans account for around 35% of outstanding small business lending, these loans tend to be relatively small (e.g. for equipment finance), have shorter maturities and are likely to be fully repaid by the time they mature,” according to the Financial Stability Review.

The business finance market has changed a lot in the past year, so if you haven’t refinanced recently, it’s something you should seriously consider. Refinancing may allow you to reduce your repayments or improve your borrowing terms. Contact me if you’d like to discuss your scenario.

Just as employers are dreaming up perks to lure staff back into the office, office landlords are offering incentives to attract businesses to their premises.

Ray White Commercial Head of Research Vanessa Rader said the incentives range from drinks and discount food to pilates sessions and special events, and have proved effective.

“Post COVID-19 we have seen an increase by institutional owners to create sub-communities within their office buildings, growing their offerings from concierge services to entertainment events, working with tenants (as well as local food retailers) and their employees to grow vibrancy in their workplace and within their buildings, reducing the threat of relocation or sublease,” she said.

Landlords grappling with WFH trend

Zooming out from the office market to the broader leasing market, Ms Rader said landlord incentives had produced mixed results.

“Relocating tenants continue to grapple with their space use requirements, often opting for smaller or the same size accommodation options, happy to allow for growth via work from home,” she said.

“Sublease continues to be a contributing factor to the overall vacancy environment, with banks, legal and technology users just some of the tenants handing back space.”

Ms Rader said the low unemployment rate – just 3.5% in February – was one reason why landlords were still finding it hard to fill their properties.

Employers have been forced to offer more flexibility to staff, with many choosing to work from home or vary their start and finish times.

If you want to purchase an office, factory or warehouse, or already own one but want to see if you can save money, get in touch and I can help.