Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

‘Best’ investment plans have realistic buffers: Financial Mappers

house invest house invest
Lucy Dean 4 minute read

To produce a resilient financial plan, investors need to understand the political and regulatory climate domestically and abroad, says Financial Mappers.

According to Glenis Phillips, designer of Financial Mappers, many investors don’t know how to minimise borrowing risk and are not familiar with the risks they are currently facing. Ms Phillips also noted that having an understanding of “looming” issues could help investors be on the lookout for solutions before the problem becomes too severe.

She added: “Looking at how housing affordability is being addressed in certain comparable overseas markets gives a clue to what is happening in Australia, and where it could be heading.”

The housing market in Australia and its associated issues are comparable to the challenges facing Toronto and Vancouver in Canada, Ms Phillips said. As such, investors should be watching the Canadian response for clues on how the Australian market will react.

Advertisement
Advertisement

Pointing to freely available credit, an expectation that rates will remain low “forever” and an influx of Chinese investors, Ms Phillips said that the typical response had been to release more land and incentives for first home buyers.

For Canada, the response included “rent control on private rental units in Ontario, and restrictions on landlord evictions. Beware Australian property investors!”

Subsequent knock-on effects, such as an over-exposure to a “topping” residential market and possible ratings downgrades for banks, were likely outcomes, Ms Phillips added.

As a result of the shifting landscape, mortgage brokers and financial planners need to ensure that clients’ positions and financial outlooks are robust, “and that an interest rise or other unexpected event would not impair their client’s ability to service their loans”.

The investment professional added that the “key success determinant” for investment was the ability to model and test the plan for several years into the future, as well as its reaction to changes to interest rates or borrowing capacity.

PROMOTED CONTENT


Ms Phillips concluded: “The best investment plans have realistic buffers built in, and the only way to finely tune this is with sophisticated calculation that considers the many elements of one’s investment strategy and risk capacity.”

[Related: Asian banks lead foreign share of business loan approvals]

‘Best’ investment plans have realistic buffers: Financial Mappers
house invest
TheAdviser logo

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Work smarter, not harder, in 2022 and beyond, visit the website here to secure your ticket.

house invest

 

more from the adviser
Stephen Moore headshot

Breaking News

Brokers will dictate future of Choice, FAST, PLAN: White

After its management restructure, Loan Market Group will continue...

Peter Lock Kerry Betros Heritage

Breaking News

Heritage leaders address merger proposal concerns

The chairman and chief executive of Heritage Bank have addressed ...

uptick graph

Breaking News

Wisr reports 113% loan book growth

The non-bank lender originated a record $132 million over the las...