JobKeeper 2.0 is about to begin: here’s what you need to know

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Like most sequels, JobKeeper 2.0 won’t be as big a blockbuster as the original. But that’s not to say it won’t help many SMEs navigate the difficult times ahead. Today we’ll cover what you need to know about making the transition for your business. 

It’s hard to believe that JobKeeper 2.0 is due to begin next week.

But it’s actually been half a year (or 13 fortnightly payments) since the scheme was first launched, over which time around 42% of small businesses have accessed it, according to a MYOB survey.

Today we’ll look at whether your business might be eligible for JobKeeper 2.0, and if not, some other potential options that might be worth considering instead.

28 September 2020, JobKeeper extension 1 starts

The first extension will cover seven JobKeeper fortnights between 28 September 2020 and 3 January 2021.

The rates of the JobKeeper payment in this extension period are:

Tier 1: $1,200 per fortnight (for eligible employees or business partners who worked 80+ hours within a four week designated period)

Tier 2: $750 per fortnight (all other eligible employees and eligible business participants).

To claim JobKeeper payments for this period, you will need to show that your GST turnover has declined in the September 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019).

But here’s the good news just in: if the quarter ending 30 September 2019 is not an appropriate comparison period, you may be able to use the alternative tests, the ATO has just confirmed.

These alternative tests are broadly in line with the original seven alternative test circumstances, and cover businesses that started after the comparison period, had a substantial increase in turnover, had an irregular turnover, or were affected by drought or a natural disaster.

The key difference this time around, however, is that the tests must be applied on the basis that the turnover test period is a quarter (rather than the choice between a month or quarter, which you had for the first version of JobKeeper).

What if my business is no longer eligible for JobKeeper?

If your business is no longer eligible for JobKeeper, please know there may be other financing options available to assist you through the coming period.

One option to explore is the federal government’s Coronavirus SME Guarantee Scheme, which allows lenders to provide eligible SMEs unsecured loans more cheaply and more freely than regular business loans.

Another potential option is something like invoice financing, which brings forward payment of your invoices so you have cash in hand sooner, rather than having to wait for your client/s to cough up the cash.

But to be honest, there’s a whole range of possible routes available, some of which might suit your business, others that won’t.

To discuss your options, your best bet is to get in touch with us today so we can sit down with you and see if we can help you work out a path moving forward.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

House prices tipped to surge 15%, RBA hints at cash rate cut

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Strap yourself in: Australian house prices are tipped to experience a mild COVID-19 dip before surging 15% over the following two years, according to some of the nation’s top economists.

And in more good news for homeowners, RBA Deputy Governor Guy Debelle has hinted at further reductions to interest rates, while not going into negative territory.

Both NAB and Westpac economists have been quick to jump on board the rate cut hype train, predicting the RBA could cut the cash rate by 15 basis points to a record low 0.10% as early as October.

But back to that tipped 15% price surge

Westpac’s Chief Economist Bill Evans and Senior Economist Matthew Hassan believe house prices are set to bottom out by June 2021 after a further 2.3% fall – which would mean a total fall of 5% from the peak in April.

But the good news is they’re tipping prices to bounce back hard and fast across the country.

Indeed, the duo expects national dwelling prices to “surge” 15% until mid-2023, or 7.5% per year, led by massive gains of 20% in Brisbane and 18% in Perth.

Sydney (14%), Melbourne (12%) and Adelaide (10%) wouldn’t miss out on the action, either.

If it plays out as predicted, we could see a cumulative increase in national prices of 10% from pre-COVID highs over a three year period.

“This recovery will be supported by sustained low [interest] rates, which are likely to be even lower than current levels,” Mr Evans says.

Such a rebound would also be assisted by ongoing support from regulators, substantially improved affordability, sustained government fiscal support, and a strengthening economic recovery.

Mr Evans adds the recovery would be further aided “once a vaccine becomes available, which we expect in 2021″.

Got your eye on a property?

For those who are confident in their financial circumstances at present, Westpac’s housing market prediction certainly makes it a tempting time to buy, especially if another RBA cash rate cut soon comes to pass.

So if you’re looking to add to your property portfolio, looking for a change of scene, or keen to buy your first home and break into the market, get in touch today.

We’re here to help you find a loan that’s just right for you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

More than a quarter of SME businesses knocked back for finance

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As if small and medium-sized businesses weren’t already facing an uphill battle this year; now it turns out that more than a quarter were knocked back when they applied for finance in recent months. Here’s how we can help.

The latest Sensis Business Index – which surveyed 1,015 businesses in the first week of August – shows 26% of businesses that applied for finance over the past three months were knocked back.

The figure was worse in the bush with 37% of those applying in regional areas declined, compared to 25% in cities.

Additionally, fewer and fewer businesses are applying for finance.

The percentage of businesses that applied for finance dropped to 13%, down from 16% in March and 17% in December 2019.

How we can help

All of the above figures highlight the importance of having a broker like us guiding you through the process.

Here’s what small business lender OnDeck has to say in regards to its recent research on the importance of having a trusted professional to speak to while applying for finance.

“Our survey clearly highlights that SMEs place significant value on the input of a broker in the commercial finance process,” says Robbie Fidler, OnDeck Australia national broker channel manager.

“Brokers can act as a conduit between lenders and SME owners, providing the person-to-person link that is so valued across the SME community.”

Additionally, SME lender Scottish Pacific recently highlighted the important role brokers can play in helping businesses prepare for that September “cliff” you’ve probably heard about.

“When COVID-19 hit and JobKeeper and other initiatives were put in place, September seemed a long way away – it’s only a week away now, and small businesses need to act,” says Scottish Pacific’s General Manager for Victoria, Jane Starkins.

“We are having regular conversations with accountants and brokers who realise their clients need funding in place to pay expenses they have been deferring, including rent, asset finance, PAYG, superannuation and payroll tax.”

Ms Starkins adds that now is an ideal time for business owners to find new funding paths that harness the value of assets already in their business, such as their sales invoices or plant and equipment.

“Business owners are reluctant to extend their borrowings. They are busier than ever trying to navigate the COVID-19 environment, which means accountants and brokers have a crucial role to play in making them aware of other funding solutions,” she says.

Get in touch

If you’re an SME owner in need of finance solutions to get through the months to come, get in touch.

The sooner we can discuss your options with you, the better placed your business can be to avoid the September cliff and thrive beyond.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Where you’re most likely to score a $50,000 discount on property right now

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Home sellers across the country are lowering their price expectations in droves, new data reveals. But which two capital cities have seen the highest percentage of sellers discount their asking price?

Here’s an exciting stat for all you property bargain hunters out there: the percentage of sellers dropping their asking price during COVID-19 has more than doubled in our capital cities across the country, new Domain data shows.

So which two cities have seen the biggest increase in sellers offering discounts?

Well, the head-and-shoulders leader is Sydney, followed by Melbourne, with Adelaide only just nudging out Brisbane and Perth in a photo finish for third.

But all cities are offering median discounts between $22,000 and $50,000, which we’ll look at below.

A closer look at the stats

Prices dropped on one-in-seven (14.7%) Sydney properties for sale last month, almost a threefold increase from the 5.3% of sellers who offered discounts a year earlier in July 2019.

In Melbourne, the percentage of sellers dropping their asking price during the COVID-19 pandemic increased nearly four-fold from 3.1% in July 2019 to 11.5% in July 2020.

Adelaide recorded the next highest discount figure at 10.1%, up from 3.1% last year, while in Perth the percentage of discounters almost doubled to 10% from 5.3%.

Brisbane followed closely with an increase to 9.7% from 4.4%, Canberra increased to 8.6% from 6.3% and Hobart to 5.4% from 2.8%. Darwin was the only capital to record a slight drop – with 5% of sellers offering a discount this year, compared to 5.5% a year earlier.

So what does that mean for prices?

With most capital cities offering a median discount around 4-5%, the savings you could receive on a median-priced property in each city are: $49,150 in Sydney, $35,254 in Melbourne, $26,810 in Brisbane, $26,210 in Canberra, $24,553 in Perth, $24,351 in Hobart, $23,745 in Darwin, and $22,121 in Adelaide.

But remember, that’s just the median. Better (and worse) discounts are sure to be found.

Here’s a quick table for you to compare the numbers yourself

The percentage of listings with discounts from July 2019 to July 2020:

Sydney: Increased from 5.1% to 14.7%

Melbourne: Increased from 3.1% to 11.5%

Adelaide: Increased from 3.1% to 10.1%

Perth: Increased from 5.3% to 10%

Brisbane: Increased from 4.4% to 9.7%

Canberra: Increased from 6.3% to 8.6%

Hobart: Increased from 2.8% to 5.4%

Darwin: Dropped from 5.5% to 5%

A quick note on the value of the discounts

Now, it’s important to note that the value of the discounts isn’t increasing – just the percentage of properties offering discounts.

Domain senior research analyst Dr Nicola Powell explains: “We’re seeing a broader slowdown in properties, rather than prices tanking, which is good news.

“And I think we’ll continue to see price weakness but the falls to date have been minimal and they’ll stay that way, rather than some of those outrageous predictions we saw at the start of COVID-19 of 30% falls.”

Think you might have found a bargain?

Have you recently stumbled across a discounted property that’s too hard to ignore?

If so, get in touch today and we can help you get your finances in order and apply for a home loan. The lending market can be a little tricky to navigate at present, but rest assured we’re here to help guide you through it.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Property ranked as 'best investment option right now' by experts: survey

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You’ve heard the saying ‘safe as houses’, right? Well, it seems that old adage may ring true even in the current pandemic, with many of the nation’s top economic experts saying that’s where they’d put their money right now.

A Finder survey asked 28 leading experts and economists to weigh in on future cash rate moves and other issues related to the state of the Australian economy.

When asked: “Where do you think is the best place to invest your money right now?”, the leading response was “property”, with 1 in 3 experts (32%) backing it as their top option.

This was followed by shares (21%), gold (14%), superannuation (11%) and then cash (7%).

But hang on, isn’t the property market meant to be in trouble?

Rest assured it’s not all doom and gloom out there.

According to CoreLogic’s latest data, nationwide median housing values fell just 0.6% in July and fell 1.6% for the quarter, bringing the median dwelling value to $552,912.

However, to put that into context, over the past year national housing values have risen by 7.1%.

Sydney property prices led the way with a 12.1% increase in median value, followed by Melbourne (8.7%), Canberra (7.2%), Hobart (5.9%), Brisbane (3.8%) and Adelaide (2.4%).

Perth (-2.5%) and Darwin (-2.2%) were the only capital cities to record negative growth in housing values over the past 12 months.

Tim Lawless, CoreLogic’s head of research, said housing markets have remained relatively resilient through the COVID-19 period so far.

“The impact from COVID-19 on housing values has been orderly to-date,” says Lawless.

“Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn.”

However, with fiscal support set to taper from October, and repayment holidays expiring at the end of March next year, Lawless says the medium-term outlook remains skewed to the downside.

“Urgent sales are likely to become more common as we approach these milestones, which will test the market’s resilience,” adds Lawless.

Other interesting property market predictions

Here are a few other interesting stats and predictions we took out of the Finder survey:

– Almost half of experts (42%) believe now is a good time for homeowners to put their property on the market, while a quarter said homeowners should wait two years.

– Two-thirds of surveyed experts (65%) believe Australia will see GDP growth in 2020, despite the Treasurer confirming in June that the nation is now in recession.

– All experts believe no further cash rate cuts will be implemented this year. However, more than two-thirds (72%) of experts forecast an increase in 2021 or 2022.

– More than half of experts surveyed (58%) believe other banks will follow in St George’s footsteps to reduce lenders mortgage insurance (LMI) to $1 for first home buyers with a deposit of just 15%.

Seen a property you like? Get in touch

As mentioned earlier, it’s expected that properties priced for a quick sale will hit the market in the coming months – properties that may prove difficult for some buyers to resist.

So whether you’re looking to add to your property portfolio, looking for a change of scene, or keen to buy your first home and break into the market, get in touch today.

We’re here to help you find a loan that’s just right for you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.