The BFG Report

Welcome to the 2018 Autumn Edition of the BFG Report

Super Opportunity For First Home Buyers

The ‘First home buyer super saver scheme’ allows you to save for a deposit for your first home using your super account. The benefit of saving within your super is the concessional tax treatment of super which can help you save faster compared to a traditional savings account.

How Does It Work ?

From 1 July 2017, you can make your own concessional and non-concessional contributions into your current super account to save for your first home. There is no need to open a special super account.

From 1 July 2018, you can apply to the ATO to release these contributions, along with the earnings on the contributions, to fund the purchase of your first home when you’re ready.

Who Is Eligible ?

To be eligible you must:

  1. be 18 or over at the time of applying for the release of your money from super
  2. have never owned property in Australia, including a home or investment property
  3. live or intend to live in the property for at least six months of the first 12 months after purchase
  4. not have withdrawn an amount under this scheme before.


Money that can be released from your super account includes:

  1. your non-concessional (after-tax) contributions
  2. your concessional contributions, such as salary sacrifice contributions and personal deductible contributions minus 15 per cent contribution tax
  3. the associated earnings on the above contributions.


Note: The non-concessional contributions must be released before any concessional contributions. Also, super guarantee contributions, spouse contributions and government co-contributions cannot be released.

How Much Can You Save ?

The maximum amount you can contribute is:

  1. up to $15,000 from any one financial year, and
  2. a maximum of $30,000 in total across all years.
  3. this means a couple saving for a first home could contribute up to $60,000 together.


While the non-concessional contributions can be paid tax-free, all associated earnings plus any concessional contributions in a withdrawal will be taxed at your marginal tax rate.  However, with a 30 per cent tax rebate from the government this considerably reduces your overall tax liability.

Investment Market Review – Quarter Ended 31 December 2017

Asset Class – Australian Shares
1 year is   11.9% p.a.
5 year is  10.1% p.a.
10 year is 4.0% p.a.


The Australian stock market ended the year on a high, up 7.7% over the December 2017 quarter. It outperformed many of its global peers even though the near-term outlook for domestic growth is not as strong as other advanced economies. Broad-based price momentum in commodity markets drove index gains, providing a refreshing boost to the local market after a lacklustre September quarter. All sectors ended the quarter in positive territory, with energy well ahead of the pack thanks to a surge in oil prices. The banks posted a relatively modest result after the announcement of a Royal Commission into the banking sector.

Asset Class – Listed Property Trusts
1 year is   6.4% p.a.
5 year is 13.4% p.a.
10 year is 1.8% p.a.


Real estate investment trusts (REITs) delivered a 5.7% total return in 2017, underperforming the broader S&P/ASX 200 Index by 6.1% in the sector’s first year of underperformance since 2013. The vast majority of REITs delivered positive total returns, with the exception of retail property giants Scentre Group (down 4.8%) and Vicinity Centres (down 3.3%). Within the S&P/ASX 200 REITs Index, the top performers were Abacus Group (up 44.6%), Charter Hall Group (up 34.5%) and Goodman Group (up 21.9%), which all benefited from buoyant transaction markets. Australian REITs underperformed wholesale property funds (+12.2%) and direct property (+12.0%), and most major global REIT markets except Japan (-4.9%) and the US (+3.9%). Europe and Asia (except Japan) REIT markets outperformed Australia. Pricing metrics softened slightly in 2017, with the sector closing at a 24.5% premium to net tangible assets (NTA), a 17.4x price earning (P/E) multiple and a 4.8% dividend yield.

Asset Class – International Shares
1 year is  13.3% p.a.
5 year is  18.1% p.a.
10 year is 6.3% p.a.


Global shares delivered another quarterly gain, with the MSCI World Index rising 5.4% over the period. Within that, emerging markets jumped 7.1% to outperform their developed-market counterparts, which rose 5.1%. US markets forged ahead, outstripping its string of record closes it set in the September quarter. Gains were bolstered as President Trump finally signed into law the comprehensive tax reform bill which will see the corporate tax rate slashed from 35% to 21%. Broadly positive economic data supported the US market, as the US Federal Reserve reiterated that the US economy was in robust-enough shape to handle the unwinding of its US$4.5 trillion balance sheet. The Dow Jones Industrial Average spiked at 10.3% and was the best-performer of the US market indices, with the NASDAQ Composite Index, up 6.3% and the S&P 500 Index rising 6.1%.

Asset Class – Fixed Interest
1 year is    3.7% p.a.
5 year is    4.2% p.a.
10 year is 6.2% p.a.


The Australian yield curve flattened marginally over the quarter with the spread between long-term rates and short-term rates narrowing once again. At the end of the December quarter the Australian 10-year bond yield ended at 2.63%, down from 2.84%. The Australian three year bond yield ended the quarter at 2.12%, down from 2.15%. The US yield curve also flattened, although the move was notably more pronounced than that of the Australian yield curve. The US two-year bond yield ended the December quarter at 1.88%, up from 1.48% at the end of the previous quarter. The US 10-year bond yield ended at 2.41%, up from 2.33%.

Asset Class – Cash
1 year is    1.7% p.a.
5 year is    2.4% p.a.
10 year is 3.6% p.a.


The Reserve Bank of Australia left its cash rate unchanged at 1.50% throughout the quarter, while the US Federal Reserve Bank hiked rates by 25 basis points, taking its funds rate to a 1.25 — 1.50% target range. They also took the opportunity to announce that the cap on its balance sheet run-off will double to $20 billion per month as of next quarter, unwinding its US$4.5 trillion balance sheet.

High Yielding Internet Savings Accounts

Financial Institution and Interest Rate

RaboDirect Bank – Rate 3.05% p.a.

ME Bank Online Saver- Rate 2.85% p.a.

Citi Online Saver – Rate 2.85% p.a.

St George – Maxi Saver – Rate 2.85% p.a.

Rams Saver – Rate 2.80% p.a.

ING Savings Maximiser – Rate 2.80% p.a.

Rates are subject to conditions and change.

Rates are correct as at 6/03/2018.