For those who don’t know LM, they are a privately owned, specialist Australian income funds manager who provide established income funds with a range of flexible investment options: cash, conservative income and enhanced income. Their funds are on the rise, and their interest rates are quite attractive.

Personally, I am still lukewarm on their funds, but they do seem serious, and certainly do provide good industry reviews for the Australian property market. Here it is:

Whilst Australia is not immune from the global recession, its strong macro-economic framework continues to provide resilience within its general economy and property market, to ensure any recession is short term in nature.

Australia’s population continues to grow, supported by a fairly aggressive migration program which welcomes approximately 160,000 new Australians each year, who immediately contribute to the economy.

Fiscal policy and interest rates

• Since September 2008, Australia has seen a sharp reduction of 4.25% in interest rates, from 7.25% to 3.00%. Loan rates are now the lowest they have been in some 50 years.
• In addition, the Australian Government has implemented expansive and conservative fiscal policy of approximately AUD$60 billion, the equivalent of around 6.00% of GDP. According to the International Monetary Fund (IMF), this gives Australia’s government “scope to counteract the downturn”.
• The resultant Australian Government debt created by these expansionary policies will be subsequently less than experienced by other economies. Australian Government debt as a percentage of GDP is forecasted to be below 20.00% in 2014, compared to close to 80.00% for the UK, US and Euroland, and Japan at 140.00%.
• There have been NO government bailouts required, unlike the UK and Europe where massive bailouts have been required within the banking and corporate sectors.
• Australia’s banking sector is strong, with its four major banks each holding one of only 12 worldwide Standard and Poor’s AA+ ratings.

Funds management industry and financial services sector

• Australia has one of the largest and most tightly regulated funds management industries in the world.
• As part of the managed funds industry, the financial services sector is the fourth largest sector in Australia.
• Australia’s non-bank sector is well established and recognised. It constitutes approximately 35.00% of the financial services sector.

Property

• Australia’s property market is diverse and ranks in the top 10 globally.
• Australia has the second largest REIT (Real Estate Investment Trust) market in the world, after the US.
• The continuing housing shortage faced by Australia is being addressed at both Federal and State Government levels. Both are currently spending AUD$ billions on infrastructure to combat unemployment, and to provide the necessary framework for continued growth. The Federal Government currently provides a grant of between AUD$7,000 to AUD$21,000 to first home owners.
• During 2008, Australian property prices softened around 2.00% to 3.00%, with further marginal softening occurring in the first quarter of 2009.
• Sales activity is slow and there has been no volume of discounted sales, a result of the current environment of record low interest rates.