It’s around this time of year we often reflect on where the year has gone, and how quickly Christmas is approaching. At Certainty Wealth, we’ll be celebrating at our team Christmas party in just a few short weeks.
It’s been a fantastic year of growth for CW clients, and for CW itself.
We are constantly reminded in the media about the 2032 Olympics and its effect on the South East Queensland property market. It has been, and will remain, in the next few years, a great place to invest. But like Sydney before it, it is fast becoming unaffordable, and is now clearly the 2nd most expensive housing market in the country.
Fear not, however, as CW and its clients have identified Melbourne and Canberra as relative value for our clients who don’t have over a million to invest in a property. After a few lean years, these markets are starting to turn, with both showing over 4% p.a. growth rate. These markets still remain undervalued relative to their peers and represent great opportunity in the coming years.
As for having a few lean years, it’s why we insist clients need to take a long-term view in property investment, or more specifically, a minimum of 10 years. Whilst the sugar hit of seeing a fast increase in a year can be intoxicating, our most successful clients are those who have bought 10 years ago, held those properties and gradually added to their portfolio as their circumstances allow. In this way they have been able to lock in long-term compound growth.
CPA Fund
Another quarter down, and another quarter of strong and predictable returns for the CPA Fund. The first quarter sees us on track to deliver a 9.5% annualised fully-franked return.
A note on our return: as mentioned in the PDS, this is a fully franked return, which means tax has already been paid on it. For our SMSF investors, you get a 100% cash refund on your franking credits. Irrespective of your investment structure, it means that your investment return is equal to the increase in the unit price, plus the cash refund of the franking credits. Spoiler alert: this equals a 9.5%pa return. An easy explanation around franking credits is detailed here. For more information, please speak with your accountant.
As mentioned last quarter, we’re on track to deliver our first liquidity event in December. The processes and procedures of this are dictated to us by the Corporations Act, and a notice will be issued to all investors in the coming weeks. Please note: it’s an opt in, pro-rated process. Thank you to those investors who have reached out and notified us of their intent to withdraw – it helps greatly in asset planning purposes, and we’ve budgeted on meeting those. But fear not, as you’ll see below, our projects are maturing and they are starting to recycle cash, and reduce debt, which makes liquidity events more frequent and plentiful. We are forecasting another 2 liquidity windows next year.
For the vast majority of our investors whose circumstances and appetites haven’t changed, no need to take any action at all. Sit back and enjoy your returns!
Certainty Income Fund (CIF)
Certainty Income continues to grow at a rapid rate, and asset quality (residential mortgages to CW SMSF investors) is performing extremely well, as we expected. It’s met its benchmark returns again this quarter.
If you’re not familiar with the Certainty Income Fund, I’d encourage you to have a chat with your Relationship Manager, or Yasmine, to see if it can help get your spare SMSF cash working for you.
The Sanctuary, Port Macquarie
We hit some more great milestones for The Sanctuary this quarter. Stage 7 has registered titles and the first wave of land-only settlements will happen before Christmas. The house constructions will start towards the end of Q1 next year, with those set to complete and settle towards the end of Q3 next year. This will be a contributor to a liquidity event as mentioned above.
Stage 5 has its Construction Certificate and will begin construction this month. The program will be 4 months (plus weather delays), and we’re aiming for land-only settlements to take place in Q3 next year.
Sales demand has been very strong over the last 6 months, and Stage 5 is approaching sell out. We’ll review our Council approval program and expect to release the following stage to the market either late this year or early next year.
Botanic, Toowoomba
This asset continues to go from strength to strength. Stage 1 & 2 have titles registered and settlements completed, which have repaid the Stage 1 & 2 senior debt. The remaining 22 lots have been released to enable CW to construct houses, which we anticipate to be complete and settling in early Q3 next year. This again will be a contributor to a liquidity event. Stage 3 is complete and sold out, and we’re working towards settlement in March 2026. Stages 4 through 6 are at various stages of construction and are all sold out. They will be settled at various points between March and August 2026. Stage 7 is also under construction, is almost sold out, and will settle next September.
We have secured the unconditional sale of the retirement village site to an institutional investor. This will settle once we complete Stage 8, which will be approximately September/October next year. This will also be a contributor to a liquidity window next year.
The Crossing, Sarina
We settled this site in August, and have secured Operational Works for Stage 1 being 85 residential lots. Tenders have been received and marketing has been launched this week. We expect to secure approximately 50 pre-sales prior to starting construction in February/March next year.
We are working closely with Council and State Government about the approval of key infrastructure which will unlock the bulk of the site and significantly enhance the dwelling yield and town infrastructure. This process is tracking on schedule.
Riverbend, Mirani
Construction has been underway in Mirani since September and thanks to the dry weather, is about 1 month ahead of schedule. We’ll need this as we approach the wet season. We launched the marketing campaign in late June and have been overwhelmed with the response, with all 66 lots being sold. This confirmed our view of the enormous pent up demand in Mackay for housing, and that it is a hidden gem on the East Coast of Australia, representing one of the best kept investment secrets. We’re working towards Stage 1 construction completion in mid 2026. We’ll look at releasing Stage 2 towards the end of Q1 next year, then roll into construction of that next stage.
Warragul, Victoria
It’s a case of hastening slowly at Warragul this quarter. Whilst we’re still working through our permit application, we’ve done a lot of work upfront to remove hurdles to approval from Council. We have the bulk of our reports complete for lodgement, but will have another meeting with Council to fine-tune before lodging later this month.
New Staff
Another big quarter of growth for our team.
We’ve identified our Lending team (the good people who get our direct property clients’ loans approved) as a focus where we can improve our capacity and service. This is also in line with the increase in capacity of Certainty Home Loans, of which I hope to have some good news for you in the next update. As such we’ve welcomed Teaghan Lamont, Tahlia Woodiwiss, and Rachel Walsh into our Lending team. We’ve also welcomed Rebecca Lock as a Relationship Manager in our direct property team.
We’ve expanded our Relationship Management team on the Direct Capital Inflows (CPA) team, with Max Papageorge and Matthew Maddrell coming on board.
We’ve welcomed back Leilani Van Dohren as a Senior Accountant again, after a sabbatical elsewhere.
Most importantly, Steve Johnson, Matt Mina, and Annette Everingham have all added little bundles of joy into their families this quarter – congratulations team!!
As always, thank you for your ongoing support. We don’t take it for granted, and without it, my team and I don’t get to wake up and do what we love doing every day. Have a great finish to your year, a peaceful and restful Christmas with loved ones, and I’ll be in touch next quarter.
Kind regards,
Damien Gwynne | Managing Director
