October 2012

Dear Investor,

One of Australia's most respected and dynamic property analysts, SQM Research's Louis Christopher, has recently released his annual "Housing Boom and Bust 2012/13 Report". This report provides a keen insight into the state and prospects of the Australian property market.

At the most fundamental level, the report provides solid news for average property owners and, as a consequence, the broader Australian economy. Christopher contends that "the remainder of 2012 and 2013 is likely to see a recovery in dwelling prices" and that "the lower end of the capital city market is likely to outperform the upper end". The recovery will be driven by the impact of low interest rates on the lower and middle end of the market.

Importantly, the main impetus of the recovery is likely to occur in markets that have struggled over the last five or so years. Christopher said "the best performing areas in Sydney are going to be in Sydney's outer ring, particularly in the west and south-west". He also identified the struggling Queensland Gold Coast and Sunshine Coast regions as areas nearing a property value floor.

Christopher pointed to low vacancy rates in these areas as a sign of strong demand for middle and outer-ring property.

"Given the rate cuts that have happened many renters who are living out there would now like to be buyers," he said.

"It's better news for sellers. If they are looking to sell in the next 12 months they will probably see more buyer demand."

As always, however, there are risks. The report analyses the impact of five scenarios on the market for 2012/13. In the first and most likely scenario, the commodity boom experiences a downturn, causing the terms of trade to fall and then level out. This scenario assumes that the dollar will be close to parity and the Reserve Bank will cut rates by 50 basis points before Christmas.

If this occurs, Mr Christopher said we can expect house prices to grow between 2 and 14 per cent across Australia. The only exception would be mining towns.

Sydney could expect house price growth of 5 to 9 per cent next year, Melbourne 2 to 5%, Brisbane 3 to 7%, Perth 6 to 12% and Adelaide 2 to 5%.

But the report says this price growth will occur in the lower and middle end of the market while prestige properties continue to underperform.

"At this point in time the prestige market is not showing any signs of recovery at all," Mr Christopher said.

He said the predictions in the report could be bad news for buyers who have waited on the sidelines for house price falls in the order of 40 per cent as predicted by Dr Steve Keen, colloquially known as Dr Doom.

If you would like to purchase a full copy of the report for $39.95 please click on the following link:


La Trobe Financial's Direct Mortgages Option allows investors to invest in a specific mortgage. We produce a Weekly Investment Shopping List that provides a list of available investments by State. Please call our Investor Liaison team on 1800 818 818 to discuss or visit our website (www.latrobefinancial.com.au) to obtain a copy of our Weekly Investment Shopping List.

S&P Rating - Withdrawn

S&P have recently wound down the Australian Funds Research and Wealth Management Services business lines. Consequently all S&P Australian Fund Ratings, including PMO's 4 star rating, have been withdrawn as of close of business on the 30th September 2012.

Please note that the Pooled Mortgages Option ("PMO") continues to be rated by the following research houses:

  • Lonsec 'Recommended'1; and
  • Zenith 'Recommended'2; and
  • SQM Research '4 stars'3.

Best regards,
Chris Andrews

The following award and ratings were given to the Pooled Mortgage Option within the La Trobe Financial Mortgage Fund


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Chris Andrews
Head of Funds Management

t  +61 3 8610 2811
e  candrews@latrobefinancial.com.au

Randal Williams
03 8610 2831
Chief Wealth Management Officer
Daryl Hill
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03 8610 2810
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Investor Liaison
Jo Ni
03 8610 2803
Investor Liaison
Peter Polemikos
03 8610 2834
Investor Liaison
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03 8610 2865
Investor Liaison

La Trobe is one of Australia's leading independent specialist mortgage Financiers. Its business includes residential mortgages, commercial mortgages, and investment services operating one of Australia's largest Mortgage Funds under AFSL 222213. It employs over 145 staff and has raised over AUD$10Billion to assist over 100,000 customers since inception in 1952.

Copyright 2012 La Trobe Financial. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial. Disclaimer

La Trobe Financial Asset Management Limited ABN: 27 007 332 363 and AFSL No: 222213 is the issuer and manager of the La Trobe Australian Mortgage Fund. It is important for you to read the Product Disclosure Statement for the Fund before you make any investment decision. The PDS is available on our website www.latrobefinancial.com.au or by calling 1800 818 818. You should consider carefully whether or not investing in the Fund is appropriate for you.
* The rates of return from the Fund are not guaranteed and are determined by future revenue of the Fund, and may achieve lower than expected returns. Past performance is no guarantee of future performance. Investors risk losing some or all of their principal investment. The investment is not a bank deposit.
- Withdrawal rights are subject to liquidity and may be delayed or suspended.
- The award and ratings were given to the Pooled Mortgages Option within the La Trobe Australian Mortgage Fund.
The rating is only one factor to be taken into account in deciding to invest.
1. Lonsec - "recommended" - indicates it has conviction that the fund or product can achieve its objectives and outperform peers over an appropriate timeframe.
The Lonsec Research Pty Ltd ("Lonsec") ABN 11 151 658 561 rating (assigned June 2012) presented in this document is a "class service" (as defined in the Financial Advisers Act 2008 (NZ)) or is limited to "General Advice" and based solely on consideration of the investment merits of the financial product(s). It is not a recommendation to purchase, sell or hold the relevant product(s), and you should seek independent financial advice before investing in this product(s). The rating is subject to change without notice and Lonsec assumes no obligation to update this document following publication. Lonsec receives a fee from the Fund Manager for researching the product(s) using comprehensive and objective criteria.
2. Zenith's "recommended" rating indicates that it has high confidence in the manager meeting its objectives. The Zenith. Investment Partners ("Zenith") ABN 60 332 047 314 rating referred to in this document is limited to "General Advice" (as defined by section 766B of Corporations Act 2001) and based solely on the assessment of the investment merits of the financial product on this basis. It is not a specific recommendation to purchase, sell or hold the relevant product (S), and Zenith advises that individual investors should seek their own independent financial advice before investing in this product. To view the relevant research information, please visit www.latrobefinancial.com.au The rating is subject to change without notice and Zenith has no obligation to update this document following publication. Zenith usually receives a fee for rating the fund manager and product against accepted criteria considered comprehensive and objective.
3. SQM Research - 4 stars to 4.25 stars - superior, suitable for inclusion on most Approved Product Lists. To view the relevant research information, please visit www.latrobefinancial.com.au This rating will not take into account your, or your clients' objectives, financial situation or needs. It is up to investors to consider whether specific financial products are suitable for your objectives, financial situation or needs. Research houses receive a fee from La Trobe Financial for rating the product.
4. Lipper Leaders Rating Total Return (Score – 5) Lipper Ratings for Total Return reflect funds’ historical return performance relative to peers. The ratings are subject to change every month. The highest 20% of funds in each peer group are named Lipper Leader or a score of 5 for Total Return. Lipper Leader ratings are not intended to predict future results and does not guarantee the accuracy of this information. More information is available at www.lipperweb.com. Thomson Reuters Copyright, All Rights Reserved.