Fixed rate short term returns in Sterling and Euro

Fixed rate, short term returns in Sterling and Euro


A dilemma for savers is often the length of time to commit funds in return for a healthy rate of interest. With short-term interest rates so low, savers often have to lock capital away for 2-3 years in order to obtain a rate of interest over 3-4 per cent. Wouldn’t it be good therefore to commit to only a one year term and receive an interest rate well above the rates offered by the banks ? A solution could be in Australia.

The Australia Story – did you know ?

AAA sovereign rated with political stability
World’s largest economic resources of commodities
Third largest number of high networth individuals in the region
Four of the world’s nine AA rated banks


As recently reported by Bloomberg, "Australia is one of the few nations to have skirted the global recession.” In its article dated 28 January 2010, Australia’s economy is forecast by its central bank to further strengthen in 2010. Five consecutive interest rate rises implemented by the RBA since October 2009 demonstrates widespread consumer and business confidence in Australia. It is one of the first advanced economies in the world to begin lifting rates following the financial crisis.


Residential Property in Australia

Forecasters dubbed 2009 as the year that Australian house prices would fall, with some economists predicting declines of up to 40 per cent across the property sector. That did not happen. In fact, 2009 was one of the strongest
years on record for national house price growth, a very sharp turnaround from the declines initially predicted. Decreasing interest rates and the first homeowner grant stimulated the first homebuyer sector to mid 2009. Rising interest rates and price increases should put pressure on housing affordability, which in turn should result in a greater level of price stability from mid 2010 onwards.

The top end of Australia’s residential markets also strengthened during 2009. The market for more expensive properties hit rock bottom in early 2009 along with share prices, however the recovery since then has been remarkable. In most cities in Australia, the top end of the market has now recovered all losses experienced in 2008 and early 2009, and subsequently moved to historic highs.

Upsizers and young Australians leaving home account for approximately 60,000 of new households per annum, while overseas migrants account for around 110,000 new households. There are approximately 140,000 new dwellings approved or commenced each year, leaving a shortfall of 30,000 houses/units required to cope with demand. This alone will ensure that the property market will continue to increase in value. Investor activity in the lower and mid range price points is already increasing, along with activity from those upgraders who sold into a very strong first home buyer market before September.

The country is also experiencing historically strong population growth. More than 285,000 migrants arrived into Australia in 2009, and a ‘baby boom’ has provided a natural increase rate of 0.74 per cent of the population. Migrants require immediate accommodation, and the present generation is looking to upsize their existing accommodation to cope with the new addition to the family.


Fixed rate returns on Property Assets

With a booming property market and a lack of available credit in Australia’s banking sector means positive ongoing opportunities for alternative lenders to the banks. Specialist commercial lending funds now exist that meet the shortfall of supply of commercial loans to developers of property.

In turn, investors effectively become the lenders and with such high margins above bank savings rates, very attractive returns are available to investors looking to commit capital for 12 month terms.

Present fixed rate returns are 7 per cent in sterling and 6 per cent in euro for one year. At the end of the term, investors receive the fixed rate of interest plus original capital with the option to roll over the capital for a further 12 months.

If you believe in the Australia story then you will conclude that the above rates are factual and achievable. One such fund that we recommend has been offering such investments for the last eight years and with a 100 per cent success rate.

Finally, did you know that the kangaroo and emu, Australia’s national animal emblems are the only animals on earth that cannot walk backwards !



Mark Hollingsworth, Director, Hollingsworth International Financial Services Ltd
Tel: +357 99066840, +356 21316298
e-mail: info@hollingsworth-int.com
Website: www.hollingsworth.eu.com
Authorised by the Malta Financial Services Authority to provide investment services, license IS/32457