According to the article, Australian Tax Office data showed almost half of the country’s 52,670 foreign investors that declared rental income in 2012-13, the latest figures available, claimed a loss, mostly through negative gearing, News Corp reported on Monday.
Negative gearing allows landlords to offset the cost of their investment property, such as maintenance, agent fees and interest on mortgages, against the income received from rent.
It has been blamed for handing the advantage to higher-income earners and pricing lower-income earners out of the property markets in Sydney and Melbourne, where house prices are sky- rocketing.
The government, fearing voter backlash from the 1.27 million Australians using the system, has been sluggish to change the system completely, but is investigating a move on restricting or abolishing the system’s use for overseas investors, according to the Shanghai Daily article.
Big banks remain among top in profits
Investors may have fallen out of love with Australian banks, but they remain among the most profitable lenders in the developed world, according to an article with the Sydney Morning Herald.
According to the article, the big four had the highest return on assets when compared with major banks from 10 other wealthy economies and some emerging markets, new figures from the Bank for International Settlements show.
The big four’s pre-tax profits as a percentage of their assets was 1.28 per cent in 2014, putting them ahead of banks from other developed countries included in the BIS annual report, released on Sunday night. Australian banks were not as profitable as those from the emerging markets Brazil and China, which notched up profits that were 1.66 per cent and 1.83 per cent of assets, respectively.
Non-major increases up-front broker commissions
ME Bank has announced it is increasing up-front commission to brokers from 0.60 per cent to 0.65 per cent, excluding GST, of the home loan amount settled.
The increase will apply to all settlements that occur on or after 1 July 2015, so brokers with applications currently in the pipeline may be eligible. It will also apply to top-ups of $50,000 and over.
ME Bank says they will continue to maintain a commission structure commensurate with their growth plans, recognising the vital role brokers play in the promotion and distribution of their home loan products.