EXPERT BLOGS
Why fixed rates and floating rates attract you at different points
Australian property tax and expatriate tax expert STEVE DOUGLAS explains why fixed rates and floating rates seem alluring at different points.
Q Why are fixed interest rates in Australia lower than the floating rate on my loan?
A When borrowing to buy an Australian property, lenders in Australia usually offer either a floating (or variable) interest rate, which will change periodically, or fix your interest rate for a set period of up to five years. However, sometimes the fixed rate might be more attractive than the floating – and vice versa. The two factors which influence this are expectation and availability.Expectation is whether the market believes interest rates will rise or fall in the future. Fixed rates are adjusted based on predicted future rates but issues such as the current interest rate policy of the Reserve Bank and the state of the local economy can also influence the outlook of the interest rate. Currently there’s an expectation Australia may experience another rate reduction in the coming year, so we can see this factor being priced in now. There’s no repercussion if the rate reduction doesn’t materialise. The fact that the market believes it may happen is enough to make a difference.
Availability is how much money the banks have in reserve to be readily loaned to prospective borrowers. In 2011 Australia’s lending output was as soft as the property market because many were procrastinating on decisions to buy. So at that point, the Australian banks had too many funds on deposit and not enough lending going out – they had interest cost on the deposit but no revenue coming in. This reduces their profit and costs the bank money. To encourage lending, the bank actually needs to have a “sale” on the interest rate. Once the lending picks up and they start making a profit on the lending margin, the bank will be less generous with the fixed rate offerings.
As a borrower, utopia is when you see a low interest rate policy from the Reserve Bank and a low lending output from the bank. We saw this happen during the Global Financial Crisis in March 2009 when the three year fixed rates in Australia dropped to 5.19 percent per annum. The variable rate was also low but not as low as the special fixed rates on offer. While there was talk rates may have reduced further – it didn’t happen. Within six months the fixed rate had risen to almost seven percent per annum even though the variable was still around six percent per annum. A combination of a higher rate expectation – as the Reserve Bank continued to lift rates – and reducing availability – as more people took advantage of improved conditions and began to borrow again – quickly shifted the fixed rate offering from low end to high end.
I believe a similar situation will occur in Australia this year as activity picks up, even though the RBA is likely to hold rather than lift rates through 2012. This may mean the fixed interest rate is an attractive option for any Australian property investor. To review your loan or check the current interest rates on offer visit www.smats.net.
DAS International engaging parents, empowering kids
The Finder spent quality time with the DAS team recently at the UWS Fair held on Saturday February 11 2012 at the UWC campus Dover. Just to bring you into the picture - DAS International provides professional support dedicated to individual learning. If you need specialist support for your child please contact DAS immediately and have an open discussion. The team of dedicated teachers and consultants are a dream to work with. The Finder regularly hears glowing reports from our readers about the DAS approach to educational support.
Consulting Educational Psychologist Dr Tim Bunn (pictured with members of the DAS team) has years of training and specialist knowhow in his field.His team of angels are committed to caring while being the largest provider of support services to students with learning differences in Singapore
(David Malligan with members of the school community at the UWC Beat the Drum Fair).The UWC Community Fair was a great day. Attended by thousands of students - past and present, parents, friends, families and interested onlookers the fair has an exciting atmosphere about it- backed by cool vibes and current hits of the sound waves with seemed like the resident school DJ and certainly voiceover and radio Jock celebrity of tomorrow.
The day was abuzz with activities. The entire school community lent a hand and ensured everyone in attendance had a wow of a time. DAS contributed to the success of the day with their informative discussions with members of the community about the work they do in the area of specific learning differences, dyslexia and dyspraxia, attention deficit disorder and other areas of educational support such as numeracy, literacy, oracy & skill writing. The Finder really appreciated the time DAS spent with us and other members of the school community and wish to personally thank the DAS team for their dedicated services and on-going commitment to learning. Let 2012 be a year full of success and achievement at DAS International and UWS alike.
AUSPICIOUS BUYS AT HARD ROCK FOR THE DRAGON YEAR
Hard Rock’s limited-edition Dragon Guitar Series pin is flying into Asia to spread good fortune! Hard Rock Cafe locations in Asia are offering a limited-edition Dragon Guitar pin series to celebrate the year of the dragon. The collection feature’s sixteen auspicious dragon designs unique to each Hard Rock Cafe location. The collectible pins are available for $20 while supplies last at Hard Rock Cafe locations in Singapore, Sentosa Singapore, Changi Airport Singapore, Melaka, Kuala Lumpur, Penang, Bangkok, Pattaya, Beijing, Makati Philippines, Jakarta and Bali. The entire Dragon Guitar pin series collection with sixteen city-specific pins comes in a stylish mini guitar display case (pictured) and is available for $688.Touch somebody's heart!
It seems like a month of Sundays since Christmas was upon us and already the mighty dragon is in full flight. Singapore is a buzz and it’s not going to stop – well not any time soon! One would find it a challenge to disagree, there seems to be so much variety and diversity on offer in the Lion City with each passing of the Lunar Moon and February offers no reprise.
This month, apart from personal, family and business routines only just being restored after the extended festive season, there really is loads to do and see. Like getting up close with aviation’s finest at the Singapore Airshow 2012 or being entertained by international and local artists at The Esplanade Theatres including Kumar’s Amazing Race, re-run by popular demand. And, of course, it’s time to embrace romance
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Whether you’re in a relationship one on one, lovingly up to your knees with kids or flying solo focusing on your brilliant career, travel or whatever tomorrow may bring, certainly a little loving can go a long way. We introduce Shamala Tan dedicated to helping solo entrepreneurs instil a love for themselves and others in their business, a sure way to success. Get further inspired when you read Going Places. You’ll get your sexy back in no time with the travel suggestions Assistant Editor Jassmin Peter has on offer.
You don’t necessarily need just one day in the year to tell someone you love them or that you truly hold them close to your heart. Although, we know it’s a great excuse to indulge for an evening, say, over a romantic candlelit dinner. Wine & Dine has some sensuous suggestions to consider.
February is the ideal month to embrace commitment and touch somebody’s heart, even though contrary to what some may believe, Valentine’s Day wasn’t created by greetings’ card companies just to sell cards and candies. I admit right here, right now, I’m an old softy from way back. Give me an opportunity to raid a flower shop to purchase the perfect bunch for the one I love or an excuse to drop into Tiffany’s to select that special something, there’s nothing better than the selfless high I receive with the giving of a gift – all year round.
To acknowledge a true sense of love for your partner, family members, friends and colleagues is a sign of inner strength and courage in all men and women. It’s the little thoughts of consideration that mean the most – in any relationship. There is nothing better than being on the receiving end of a great big dose of pure gratification. So, please accept this digital valentine as a gesture of appreciation and enjoy reading the articles mentioned above. Hugs!
Shop at the Tabitha Foundation Silk Fair and do your part for charity
Original furniture store is proud to once again announce it’s support for the Tabitha Foundation Silk Fair which will take place over 3 days, from Wednesday 14th through to Friday 16th March 2012, at Originals new location at the Sime Darby Centre on Dunearn Road.
The Tabitha Foundation was founded in 1994 by Canadian-born, Janne Ritskes. Since its inception, the Foundation has worked with over 1.8 million Cambodians in the country’s poorest communities. It’s philosophy of self-help is designed to promote self-sufficiency and dignity through savings, counselling, and goal-setting programmes. The programmes include house and school building, wells and pond creation, pig connection and cottage industry and many others.
Attendees at The Tabitha Silk Fair can expect to buy a wide variety of high quality home-wares and fashion items all made by the cottage industry programme. This programme trains embroiderers, seamstresses, weavers, and silversmiths and this year alone, approximately 400 families were involved in Tabitha’s cottage industry work. The items on sale will include: bedding, cushions, scarves, handbags, jewellery, travel and children’s items. 100% of the profit from the sale proceeds from the goods will go directly back to supporting the families involved in the cottage industry.
The Fair will be held at Originals’ new location at the Sime Darby Centre over three days, Wednesday 14th, Thursday 15th and Friday 16th March 2012.
Refreshments will be available at a minimal cost throughout the duration of the Fair and proceeds will be donated to support the Tabitha Foundation.
EVENT DETAILS
Fair Dates: Wednesday 14th, Thursday 15th and Friday 16th March 2012
Time: 9am – 6pm (Wed & Thur), 9-12.00 (Fri)
Where: Originals - 896 Dunearn Road, #02-03 Sime Darby Centre, S(589742)
Tel: 6471 9918
Fax: 6471 9917
www: www.originals.com.sg
Fair Dates: Wednesday 14th, Thursday 15th and Friday 16th March 2012
Time: 9am – 6pm (Wed & Thur), 9-12.00 (Fri)
Where: Originals - 896 Dunearn Road, #02-03 Sime Darby Centre, S(589742)
Tel: 6471 9918
Fax: 6471 9917
www: www.originals.com.sg