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The housing cycle and house prices always incite high interest in Australia. Until recently it was all about surging prices and poor affordability – particularly in Sydney and Melbourne. Over the last year it’s turned into how far prices will fall and what’s the impact on the economy. Global issues and the election aside, the housing downturn is likely to be the main issue for Australia in 2019. This note provides a Q&A on the main issues.

How far have home prices fallen?

According to CoreLogic data, up until December capital city dwelling prices are down 7% from their September 2017 high. This masks a wide range though with Sydney down 11% from its July 2017 high, Melbourne down 7% from its November 2017 high, Perth down 16% and Darwin down 25% from their mid 2014 mining investment boom highs but other cities continuing to trend up to varying degrees. Recently the declines have been led by Sydney and Melbourne. House prices are on average down more than unit prices and prices in regional centres have generally held up better than capital cities.  

Source: CoreLogic, AMP Capital

What is driving the falls?

The fall in property prices comes after a boom – most recently over the five years to 2017 that in particular saw Sydney prices rise 72% and Melbourne prices gain 56%. This, on top of gains since the mid-1990s, saw a sharp deterioration in affordability, prices become overvalued relative to income, rents and their long-term trend and reach expensive levels by global standards. The surge in home prices went hand in hand with a surge in debt that has seen the ratio of household debt to income go from the low end of OECD countries to the top end. High prices and high debt left Australian housing very vulnerable. What has changed in the last two years is that:

• It’s become harder to get a loan as regulators forced banks to tighten lending standards and the Royal Commission seems to have made banks even more cautious. 

• A big pool of interest only borrowers are switching to principal and interest driving higher debt servicing costs.

• Banks have cut lending to SMSF funds to invest in property.

• The supply of units has surged to record levels.

• Foreign demand has fallen sharply.

• As rising prices fed on themselves by driving expectations for more price gains (FOMO – fear of missing out), falling prices are driving reduced price expectations and leading to reduced demand and FONGO (fear of not getting out).

• Investors are starting to factor in less favourable negative gearing and capital gains tax arrangements if there is a change of government.

• Problems regarding the Lacrosse and Opal buildings have dented confidence around building standards. 

• Its unlikely interest rate cuts will quickly end this property cycle downturn as occurred in the 2008 and 2010-12 downswings. Rates are already low & debt is much higher.

What will be the impact of tax changes?

The Australian Labor Party’s policy since the last election has been to limit negative gearing to new property and double capital gains tax on investments held for more than 12 months. This is aimed at improving housing affordability which means lower prices. Put simply, such changes would make it less attractive for investors to invest in residential property which would be negative for prices. A study by Riskwise Property Research and Wargent Advisory found that this would lower property prices ranging from 2 to 3% in Tasmania to around 9% in Sydney. While the tax changes are proposed to be grandfathered, it’s likely it’s already reducing investor demand as investors worry that when it comes time to sell their property if the tax changes occur then there will be less demand.

How far will home prices fall?

For Sydney and Melbourne our base case has been that prices would have a top to bottom fall of around 20% out to 2020. However, the further plunge in auction clearance rates and acceleration in price falls late last year suggest a deeper fall possibly of around 25% (although it’s impossible to be precise). This suggests around another 15% fall in Sydney and more in Melbourne. A 25% top to bottom drop would take prices back to where they were in late 2014/early 2015.  

Source: Domain, AMP Capital

While prices in other cities are being affected by credit tightening they were less speculative and so are less vulnerable. Perth and Darwin have already seen prices fall back to decade ago levels. Other capital cities and regional centres generally didn’t have a boom and so are unlikely to have a bust. So for the rest of Australia flat prices to modest gains are likely. Taken together this suggests a top to bottom fall in national average prices of 10 to 15%, with another 5 to 10% this year.

Will home prices crash?

This is a bit of an unhelpful question like the “are we in a property bubble” questions of a few years ago as it’s hard to define and implies a degree of inevitability in terms of the implications. A 25% plunge in Sydney and Melbourne may seem like a crash but given the extent of the prior gains it’s arguably not. But a 25% national average fall would probably be interpreted as a crash. Our assessment is that this is unlikely unless we see much higher interest rates or unemployment (neither of which are expected) driving a sharp rise in defaults and forced property sales or a collapse in immigration (which would collapse demand). Strong population growth is still driving strong underlying demand for housing. While mortgage stress is a risk, it tends to be overstated, and is unlikely to be a generalised issue unless interest rates or unemployment shoot higher. And, while Sydney and Melbourne are at risk, other cities have not seen the same boom & so are unlikely to crash.

Although many like to make comparisons to the US at the time of the GFC, there are two big differences. Australia has not seen the surge in sub-prime loans where money was lent to home owners who often had “no income, no job, no asset” (NINJA loans). Secondly, our mortgages are full recourse meaning we won’t see “jingle mail”, where home owners can send back the keys just because the house value falls below their debt, which then saw the bank put the property back on the market pushing home prices even lower.

However, the risk of a crash cannot be ignored given the danger that banks may become too tight and that investors decide to exit in the face of falling returns.

Have home prices fallen before?

A common property myth is that prices only ever go up and never fall. But a simple look at history tells us this is not so. Real house prices (ie prices after the impact of inflation) in Sydney fell 36% in 1934-35, 32% in 1937-41, 41% in 1942-43, 12% in 1947-48, 14% in 1951-53, 12% in 1961-62 and 22% in 1974-77. In nominal terms based on CoreLogic data Sydney dwelling prices fell 25% in 1980-83, 10% in 1989-91, 8% in 2004-06 and 7% in 2008-09. So a 25% fall this time around would be similar to that seen in the early 1980s.

What will be the impact on the economy?

The housing downturn will affect the broader economy via slowing dwelling construction, negative wealth effects on consumer spending (ie, our wealth goes down, we feel poorer, we spend less than otherwise) and if rising defaults drive a further slowing in bank lending. The first two will detract 1 to 1.5 percentage points from economic growth. Growth in infrastructure spending and business investment should help keep the economy growing but its likely to be constrained to around 2.7% which in turn will keep wages and inflation low.  

Source: ABS, AMP Capital

What is the impact on banks?

The main risk for banks is that the property downturn drives a rise in defaults. However, full recourse loans mean that just because home prices fall resulting in negative equity, defaults won’t necessarily rise. In the absence of much higher interest rates or unemployment making it harder for people to service their loans, a big rise in defaults is unlikely. However, it’s still a risk and the housing downturn will likely mean slower bank lending which will constrain bank profits.

What will it mean for interest rates?

Constrained growth due to the housing downturn resulting in lower for longer inflation will likely drive the RBA to cut interest rates this year, with two cuts taking the cash rate to 1% by year end. Our base case is that this will occur in August and November (giving the RBA chance to assess the election and tax cuts), but soft data could see it come earlier. Tax cuts from July are unlikely to be big enough (the Government is allowing for just $3bn pa in tax cuts which is just 0.1% of GDP) to head off the need for rate cuts.

Is the house price downturn good or bad?

This depends on who you are. For baby boomers who got in years ago, have paid off their debt and saw the value of their home rise to levels they never believed sustainable, a fall back to 2014/15 levels may be no big deal. For those who got in more recently and have a big mortgage price falls are more of a downer and its this group for whom negative wealth effects will be greatest. For millennials trying to get in its great news – assuming the housing downturn is not so great that it knocks the economy for six and they lose their jobs. For investors…

What does it mean for investors?

Over the very long-term, residential property adjusted for costs has similar returns to Australian shares. So, there is a role for it in investors’ portfolios. However, right now the slump in property prices in some cities is bad news for investors given that rental yields are often just 1-2% after costs. Falling rents in Sydney are a double whammy. Add to this uncertainty about tax and it’s not a great time for a property investor. That said, other cities and regional centres offer more attractive rental yields than Sydney and Melbourne and falling prices in Sydney and Melbourne will throw up opportunities at some point.

Source: AMP Capital 23 January 2019

Important notes: While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.

Until recently, Australian house prices have marched upward so steadily that buying a house, while pricey, was rather predictable. That perception changed over the last year, as house prices fell 8.1 per cent in Sydney and 5.3 per cent in capital cities. It’s a healthy reminder that whether you are buying or selling, real estate, like any investment, can be volatile.

Australians have been conditioned to think of a house as an investment, but for most people buying somewhere to live is more of a practicality and an expense. We often forget that because rising property markets have the same effect as rising share markets, they focus people’s minds on gains and can cause them to overlook costs. Costs, however, always matter. It’s an eternal truth, whether you’re talking about your super fund or that charming cottage overlooking the bay.

Of course, charming cottages overlooking the bay have an emotional pull that, say the ASX 200, does not, so before diving in, take a step back to consider what you really want out of a home.

Owning property should perhaps not be your goal in and of itself. Having shelter that meets your needs within your budget is perhaps more sensible. Buying a house you can barely afford may only achieve the goal of keeping you up at night.

So before you go surfing on real-estate sites, take some time to plan how you want to live. How much space do you need? Owning may make more sense than renting for a family with children because large rental options can be hard to find, for example. How do you prefer to commute? If you don’t like to drive, getting a smaller place that costs more but is near your city job may be the way to go.

As you think about costs, some consideration should be given to the things that are hard to quantify in your decision. For example what is the lack of maintenance costs on a property worth, versus the peace of mind you might gain from not having to worry about a landlord moving you out of your rental property.  

Most costs, however, are more concrete. Australians are fond of saying that rent money is dead money, but so is mortgage interest paid to the bank. Just 4.5 per cent interest paid over 25 years on a $400,000 loan adds up to about $267,000.

A host of other one-time fees — stamp duty, conveyancing fees, legal costs, search fees, pest and building reports — add up to tens of thousands of dollars, although first–home buyers get a break on some of them.

And then there are the ongoing costs, such as maintenance, council and water rates, insurance and, in some cases, body corporate fees. If you rent and have the discipline to invest the deposit you would have put towards the house and the cost savings, you could well generate a higher return than you would buying a house, according to Morningstar.

If you don’t have the discipline to invest the difference, maybe the forced savings of owning a home is the right option for you. The key is to chart a path toward your own individual goals rather than slavishly follow the ups and downs of the housing market.

Please contact us on |PHONE| if we can be of assistance .

Source : Vanguard January 2019 

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2019 Vanguard Investments Australia Ltd. All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business, nor our Licensee take any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Here’s some good news for investors. With a few straightforward New Year resolutions and strategies, they can become better investors and better managers of their personal finances.

Key aims should be to save more, become better at handling inevitable market volatility, overcome investment inertia, reduce your debt and make sure you are following the fundamentals of sound investment practice.

Here are six New Year resolutions and strategies to think about:

Become a more disciplined, volatility-resilient investor: The higher share market volatility marking the final few months of last year and the beginning of 2019, highlights once again why investors should develop strategies to cope with volatility.

Block out market “noise”. Make sure you don’t overreact to daily market commentary and news, ignore short-term fluctuations in share prices and don’t get distracted by the rollercoaster emotions of the investment “herd”. Critically, set and adhere to an appropriately diversified asset allocation for your long-term portfolio – and monitor regularly particularly if your circumstances change.

And don’t try to time the market by attempting to pick the best times to buy or sell shares – typically market-timers sell after prices have fallen only to buy back after prices have risen.

When share prices sharply fall, investors often feel a hard-to-resist urge to do something when the best course is often to do nothing.

Increase your super contributions: Are you making the highest salary-sacrificed and tax-deductible contributions that you can afford? If not, consider increasing contributions from the beginning of 2019. The concessional (before-tax) contributions cap for all eligible super fund members is $25,000. Increasing your super contributions is a great beginning to breaking through the investment inertia that often gets in the way of investment success. (Concessional contributions are compulsory, salary-sacrificed and personally-deductible contributions.)

Cut your investment costs: This is one of the most straightforward ways to improve your chances of investment success in 2019 and beyond. Every dollar less paid in investment costs, including investment management fees, is a dollar more to invest.

Cut your debt: With Australia’s household debt at a record high, most of us have a powerful motivation to reduce our debts. In short, the more you are spending on paying back personal debt and on loan interest, the less you have left to invest and reach other goals such as eventually owning a debt-free home.

Control your credit card: A fundamental way to reduce debt in 2019 is to keep your credit card under tighter control. Aim to pay off your total credit card bill each month to avoid any interest and think about reducing your card’s credit limit. The typical Christmas splurge on credit provides an extra incentive to rein in credit card debt from early in in 2019. And consider the increasingly-popular alternative of having a debit card instead of a credit card. With a debit card, you can spend only your own money.

Boost your mortgage buffer: By making higher repayments on your home loan than required, you can build a mortgage buffer to help handle possible future financial setbacks and rate rises. And a mortgage buffer may enable you to pay off your home sooner. The Reserve Bank has noted in the past that many mortgages have taken advantage of low interest rates to build their mortgage buffers.

Be sure you are not being unrealistically ambitious with your resolutions, and not setting yourself up to fall short.

Have a prosperous New Year.

If you seek further assistance on this topic pease contact us on |PHONE|

Source : Vanguard January 2019 

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2019 Vanguard Investments Australia Ltd. All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business, nor our Licensee take any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Imagine a baby is born in Europe at the very moment you finish this article. That child can expect to live for two minutes longer than one born as you finish this sentence. Increasing lifespans threaten to topple the current pensions model. But, then again, maybe it’s time for a change.

Global pension assets now stand at $45 trillion, equal to around half global GDP. But retirement is a recent concept. Germany introduced the first state-funded income in old age in 1889 for those over 70, at a time when the average life expectancy was just 45. Britain and Australia followed suit in 1908 with similar gaps between pensionable age and life expectancy. Such pensions were never designed to support decades of gardening and leisure for all. They were reserved for those living much longer than expected, to an age almost certainly past the ability to perform useful work given health conditions at the time.

Source: The Human Mortality Database, Fidelity International, October 2018.

Source: The Human Mortality Database, Fidelity International, October 2018.

Since then life expectancies have increased dramatically in the rich world. But the pension age has remained virtually unchanged. In 1922, only 42 per cent of the UK population made it to age 70 to collect their pension. Those who did lived for another nine years on average. Now, only 11 per cent don’t make it to their 65th birthday, the current pensionable age in the UK, and those who do can expect to live another 20 years.

Younger for longer

Retirement is no longer the reserve of the frail and invalid, forced to withdraw from public life as the name originally implied. Advances in healthcare mean that pensioners are more physically and mentally able than ever before. Retirement is now seen as an important stage of life, a deserved reward for years of dutiful service.

All these extra years need to be funded. But a simultaneous fall in fertility rates has pushed old age dependency ratios in advanced economies to levels unable to sustain retirement as we know it today. However, the necessary changes might be driven by the choices of retirees rather than government intervention.

Source: World Health Organisation, Fidelity International, October 2018.

Our relationship with work has changed for the better

People in advanced economies are working for longer, not just because they have to, but also because they want to.

The work-leisure payoff from classical economics has transformed in the last 100 years. The shift from largely algorithmic work in manufacturing to more heuristic work in services has led to an increase in the intrinsic value people derive from work. Where previously geography or a lack of education restricted workers’ options, now they are free to choose and spoilt for choice. Your line of work is seen as an important part of your identity, akin to the way you dress or which football club you support, rather than which factory happened to be located in your home town. Work is no longer what you do but who you are.

The other upside of the shift to services from manufacturing is that working into old age is not the backbreaking endeavour of the past. People are no longer counting down the days to the salvation of retirement when one fine Friday afternoon they can down tools, straighten their crooked backs, and emerge from the darkness joyously wiping the grime from their faces for the last time. Social and technological changes have played their part too. Improvements in work-life balances, the rise of working from home, and a reduced need for business travel have all lowered the physical and mental stress related to employment.

The current crop of retirees is the last to be comfortably covered with defined benefit schemes. But not content to sit back, they are increasingly mixing leisure with part-time work, education, charity activities or starting a new venture. Cliff-edge retirements are out.

Diversification will happen earlier

This trend will continue in the future but will begin at an earlier age, spurred on by a fragmenting labour market and a generation of millennials inspired by tech entrepreneurs with many varied projects.

Career breaks earlier in life will also become more common as the risk of ‘getting back in’ falls. Those who plan to work longer anyway can afford to take a year or two out when they are younger to travel, start a business or help raise a family. The beneficial impact this will have on gender equality will be welcome.

The pensions industry has been slow to react to the breakdown of the traditional three-stage life model of education-work-retirement. But it is starting to respond with options that reflect the reality that very few retirements will be alike in future, with each evolving over its own lifecycle. Moving to a personalised service with customers able to choose when and how to mix income from annuities and pension pots depending on work prospects, travel plans or medical expenses will give extra flexibility to those with money saved away.

Technology will increase self-provision

It’s not just demographic trends that are altering the notion of retirement as a point in time. Technology is playing its part too. Online education has gained in acceptance and is now regarded as almost on a par with attending a classroom in person. This suits older people who can retrain in their spare time without the possibility of energy-sapping commutes. As work stretches out for longer, retraining and changing careers several times will become more common. A growing culture of education in later life will be a particular boost for industries needing a high number of technical roles, where the skills of older workers become obsolete faster. Many more will choose to refresh skills rather than retire.

Technology is also impacting healthcare. A more personalised healthcare service that technology enables means people will increasingly be able to schedule medical procedures at times and places that suit them, and plan career breaks around them. That knee operation requiring months of rehab may no longer make early retirement look like the only option. On an extended time-horizon, advances in technology will help older generations stay more mobile for longer.

Work will continue to evolve

The nature of work is evolving. Technology has enabled the gig economy to flourish. The pattern of on-demand work that allows employees to choose when and how much to work to perform with little pre-commitment suits many older workers. Accumulated assets such as houses and cars can now be put to use on platforms such as Airbnb and Uber. In the UK, the number of 65-year-olds who were self-employed increased by 66 per cent between 2010 and 2016, comfortably the fastest growth of any age group. Most gig economy jobs are low-skilled at present but this will change as millennials become the driving economic force. They are more comfortable recruiting the services of architects, consultants or lawyers through an app.

Data for UK citizens. Source: Office of National Statistics, Fidelity International, October 2018.

If we consider things on a grander scale, the very nature of work will be different in future. The spread of AI and advances in computer intelligence will make a range of jobs obsolete. But this will increase the value of skills that require empathetic human intelligence such as people management and relationship building. Skills that often improve with experience. So we may see older workers in higher demand than today, with the notion of peak earnings at age 45 a thing of the past.

Not all doom and gloom as we all get older

As a result, an older population won’t necessarily act as a drag on economic growth. Rising education later in life, falling age discrimination and increased flexibility around work will increase labour market efficiency by bringing more people, especially women, into the workforce on terms they want.

People generally accumulate wisdom as they age. The economy would benefit if this resource were put to good use. A recent study of new US companies that found that 50-year-old entrepreneurs were almost twice as likely to start a successful company as 30-year-olds.

The key is keeping older citizens economically active for as long as possible, both earning and consuming. The standard model of consumption, which shows a sharp fall as people leave work, will have to be rethought. But there is little guidance on how to fund consumption in old age. Almost everyone worries whether they will have enough assets to live on until they die. But many people are overly cautious.

By our estimates, around 10 per cent of Japan’s GDP is passed on as inheritance each year. And often this money is passed from 90-year olds to 60-year olds, who promptly save it as they too are worried about saving enough for retirement. In this way, a sizable proportion of assets is perpetually sitting on the sidelines. Encouraging those who have enough to live on to spend a little more in their later years would be a huge boost to the economy, not to mention quality of life in old age.

In a sense, the concept of retirement will cease to exist. Everyone will still go past an inflection point where expenditures begin to outweigh income. But it will be a personal milestone reached gradually rather than a sudden fanfare of leaving drinks and handshakes. Old age will inevitably get the better of all of us, but this will come later and later, after increasingly fulfilling preceding decades.

We might also see an end to pensions. A pot that you can only access at a certain age or in a certain way does not fit with a future of more flexible work and greater choice. Those entering the workforce today might instead prefer other tax-efficient savings vehicles that give greater control over their futures.

That people are living longer and healthier lives is something that should be celebrated rather than feared. We just need to make sure all those extra two minutes are put to good use.

So What?

Pensions were never designed for long enjoyment, and are even less sustainable with longer lifespans, healthier lives and falling fertility rates

There is good news too: our relationship with work has changed for the better, new technologies make flexible working easier, and age brings valuable experience

This means the retirement of the future won’t be a cliff-edge goodbye to work, but a gradual shift towards expenditure outweighing income, with more financial choice.

Please contact us on |PHONE| if you seek further assitance on this topic .

Source : Fidelity January 2019

Reproduced with permission of Fidelity Australia. This article was originally published at https://www.fidelity.com.au/insights/investment-articles/the-future-of-retirement-wont-be-a-cliff-edge-goodbye-to-work/

This document has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information. You should also consider the relevant Product Disclosure Statements (“PDS”) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading it from our website at www.fidelity.com.au. This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. This document is intended as general information only. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity Australia’s managed investment schemes is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. Reference to ($) are in Australian dollars unless stated otherwise.
© 2019. FIL Responsible Entity (Australia) Limited.

Important:
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business, nor our Licensee take any responsibility for any action or any service provided by the author.

Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page. 

You’ll find no shortage of celebrities endorsing various superfoods all over the world wide web and their social media accounts; which is all well and good until you get a closer look at the price of these super-expensive life enhancers!

You don’t need to burn a hole in your wallet to achieve a healthy and balanced diet.Keep reading for some delicious, healthy, and very affordable alternatives to so called superfoods! I like to call them Supercharged Foods.

Many of you may be wondering, what makes a food a ‘superfood’? Well, to be honest, there’s no concrete definition; however, the name ‘superfood’ is actually a marketing term, not a scientific one. A superfood is described as being any food that contains high levels of antioxidants, flavonoids, vitamins and minerals. Antioxidants are well known for their ability to strengthen the immune system, thereby warding off diseases, such as heart disease and diabetes.

The health benefits of these ‘superfoods’ are the result of studies done on specific essential nutrients that are known to prevent disease and improve immunity, and the foods that they can be found in, in large amounts. If studies show that a specific food contains high concentrations of antioxidants, trace minerals and vitamins, such as Vitamin C, K and B, it can then be referred to as a superfood.

Each time a new study is released shedding light on the health benefits of a specific food, the media runs with this information, publishing their own news stories about these newly researched superfoods.

In 2014 kale farmers struggled to keep up with the new demand for kale after several studies reported that kale contained high levels of antioxidants and other essential nutrients, leaving many supermarkets out of stock.

The media has a lot of influence over consumers, and with consumers becoming increasingly aware of the benefits of eating healthy, wholesome foods, it’s no surprise that supermarkets take advantage of this by drastically increasing the price of these foods!

However, some studies can be misleading, and the results reported can be misinterpreted by the media and consumers. 

Just because studies have reported that a specific food, such as blueberries, contain large amounts of antioxidants, it doesn’t mean that you have to start eating blueberries every day to maintain vibrant health.

Superfoods Aren’t The Only Foods That Contain Essential Nutrients.

And by eating a balanced diet that is full of variety, you can guarantee that you’re eating enough essential nutrients without even picking up a superfood. 

It’s safe to say that the superfoods market is booming, and supermarkets and pharmaceutical companies are taking full advantage of it. But the hype of superfoods tends to shine a negative light on many other beneficial wholefoods. 

Apples and oranges are neglected for berries, rice and pasta are replaced with teff and ancient grains… But why should superfoods be thought of as healthier than other unprocessed foods or Supercharged Foods? Is it because they cost more in the supermarket? Or maybe it’s because the local news reported a story about kale, but not English spinach.

The take home message here is fill your shopping cart with good, unprocessed healthy foods and try to buy what’s in season…. Those are usually the fruits and vegetables on special, by the way.

Here’s A Snapshot Of Well-Known Superfoods And Their Nutrients:

• Kale: contains large amounts of Vitamin A, K and C.

• Avocado: contains monounsaturated fats, fiber and Vitamin C.

• Acai Berries: contain fiber, antioxidants, essential amino acids, vitamins and minerals.

• Goji Berries: contain fiber, antioxidants, valuable trace minerals and vitamins, phytosterols.

• Blueberries: contain antioxidants, manganese, polyphenols and Vitamin C and K.

• Chia Seeds: contain omega-3 essential fatty acids.

• Quinoa: contains large amounts of protein, iron, zinc and Vitamin B.

• Coconut Water: contains natural sugars and electrolytes.If you’re on a budget and want to experiment with more affordable alternatives, look for these key Supercharged Foods and enjoy their associated health benefits:

• Broccoli: contains high amounts of Vitamin C, calcium and fiber.

• Spinach: contains folate, fiber, Vitamin C and iron.

• Sweet Potato: contain niacin, Vitamin A and C.

• Kiwi Fruit: contains fiber, Vitamin C, Vitamin E, potassium, magnesium and phytochemicals

• Buckwheat: contains fiber, folate, thiamine, riboflavin, niacin, iron, Vitamin E, zinc, magnesium and phosphorus.

• Sardines, Salmon and Mackerel: contain high levels of protein and omega 3 unsaturated fats.

• Nuts: contain zinc, iron and unsaturated fat.

• Water: needed to help carry nutrients and oxygen to cells, both of which, if are in low supply, can lead to fatigue and nausea.

Source : Food Matters September 2018

Reproduced with the permission of the Food Matters team. This article by Lee Holmes was originally published at https://www.foodmatters.com

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