Rents on houses increased 3.4 per cent to $422 a week nationally over the 12 months to October, while they rose 4.1 per cent on apartments to $409 according to property research firm rpdata.

The biggest increases were in Rose Bay, NSW where median advertised rents on houses jumped 58.3 per cent to $950 from $600 a year ago.

For units, Brisbane's West End saw rents go up 39.4 per cent to $460 a week from $330.

Other big rises in advertised median house rentals were in Toorak, Victoria ( up 44 per cent to $1280/week), Bulimba in Brisbane ( up 44 per cent to $650), and Griffith in the ACT (up 41 per cent to $1100 per week).

Source: The Age

19/Nov/2009 - RBA divided on rate rises
 

Some economists are predicting that the Reserve Bank may pause its rate rising agenda in December and hold the official cash rate at 3.5 per cent.

Westpac says the minutes of the November RBA board meeting implied the RBA is considering not lifting rates again this year. But, says Westpac, "the economic case in our view is not strong enough to change our call that a December 25-basis point rate hike is likely".

The minutes reveal that the RBA is weighing up both sides of the argument:

"On the one hand, business and consumer confidence could prove fragile, and economic activity at home and abroad might slow more than expected as the effects of stimulus measures faded," the minutes say.

But, on the other hand, "a lengthy period with interest rates at a very low level carried its own risks, particularly once the threat of serious economic weakness had passed".

Source: Courier Mail

18/Nov/2009 - Young people in perpetual debt
 

Generation Y (people aged under about 30 years of age) are likely to have more problems paying off debts than young people have had in the past. An increase in part time work and a fall in hours worked means they have less means to repay debt.

Often a young person’s first debts today are likely to be ‘perpetual debts‘ such as credit cards and HECS, whereas in the past a young person’s first debt was more likely to be a fixed repayment schedule loan such as a car loan.

Being in perpetual debt is no longer something that many people think should be avoided.

"I don't think Gen Y has really had a great deal of experience in managing money and finances, or in establishing good savings practices," says KPMG demographer Bernard Salt.

"I am really quite concerned about their ability to manage all of this."

A financial planner with Centric Wealth Advisers, Peter Richards, says there should be a plan to bring debt under control and debts with higher interest rates, such as credit-card debt, should be paid off first.

Source: Sydney Morning Herald

18/Nov/2009 - Third rate rise coming in December
 

Financial markets have priced in a 60 per cent chance that the Reserve Bank of Australia will lift its cash rate for an unprecedented third month in a row on December 1.

RBA board meeting minutes from the last meeting show a board worried about achieving the right balance between controlling inflation and allowing the economy to recover from the recent downturn.

The Australian Chamber of Commerce and Industry is concerned at the impact of a third rate rise on small business conditions.

"We would be concerned about a third rate increase in the December quarter, especially as that could crimp demand running up to Christmas, especially with respect to small businesses," said ACCI director of economic and industry policy Greg Evans.

"This is make or break time for small business."

Source: Herald Sun

Sydney’s auction results are steady this week with clearance rates and volumes broadly the same as last week. 64 per cent of 408 residential properties listed for auction on Saturday were sold on the day in Sydney, compared with 64 per cent of 397 properties last week. On the same weekend last year, 41 per cent of 429 properties sold at auction in Sydney.

Clearance rates in Melbourne continue to be above seventy per cent, with 71 per cent of 742 residential properties listed for auction on Saturday selling on the day. Last weekend 76 per cent of 562 properties sold at auction in Melbourne and on the same weekend last year, 51 per cent of 766 properties sold.

In Adelaide, 50 per cent of 30 properties sold at auction on Saturday, broadly the same results as last weekend and last year.

In Brisbane, just 19 per cent of 60 properties sold at auction, down from last week when 50 per cent of 51 properties sold.

Source: Australian Property Monitors

16/Nov/2009 - Tax on savings to be slashed
 

The rate of tax on bank deposit savings is likely to be cut as the government seeks to build a national savings base outside superannuation.

The former chief executive of Westpac and current director of BHP Billiton, David Morgan, told the ASFA superannuation conference in Melbourne last week that the government would seek to end the preferential treatment of superannuation savings over ordinary bank deposits.

Banks are also believed to be lobbying the government for assistance in building up savings from retail deposits.

The Henry review into taxation is due to report to the government in December.

Source: Sydney Morning Herald

16/Nov/2009 - Home renovations don’t pay off
 

In the last three months many more homeowners are investigating and starting renovations to add value to their homes says buyers advocate Peter Kelaher. However research from the USA indicates that renovations typically add 19 to 44 per cent less to the value of the home than the costs involved.

The improvement projects that held their value the best (although still lost money) were wooden decks (recouped 82 per cent of the cost), new kitchen (80 per cent), new windows (77 per cent), new bathroom (75 per cent), attic bedroom (74 per cent). A second story addition recouped only 71 per cent of the money spent on it.

Source: The Age

Over the next 18 months, hundreds, even thousands, of new banking and payments products and applications will appear, designed by the online generation themselves, for the online generation.

This new development has arisen mainly because one online financial institution – PayPal - realised and admitted that it couldn’t research and predict what the online generation really wanted.

“In the past we tried to define the needs and make the solutions, but we don’t know the whole story,” says PayPal’s Australian managing director Dinuke Ranasinghe.

PayPal, which has attracted seven million Australian accounts in just four years, is doing what no traditional bank would ever contemplate.

It is opening up its software base code to its users and web developers to let them design their own payment products.

“The next 18 months are going to see massive changes and innovations in payments,” says Ranasinghe.

PayPal’s opening up of its code gives every computer geek and web developer the chance to build their own payments products that will compete with the banks.

Already PayPal is the preferred method of paying for ninety per cent of online shoppers.

The opening of the PayPal software could potentially crush other online payments systems.

Source: Herald Sun

The governor of the Reserve Bank issued a short statement accompanying the rate rise yesterday which made it clear there were more rises to come.

While the commonwealth treasury believes economic growth will be weak in the coming year, the Reserve Bank says growth will be close to trend.

That forecast is believed to support the RBA’s plan to return interest rates to a ‘neutral‘ setting of about 5.0 per cent. Currently the official cash rate is set at 3.5 per cent.

A 5.0 per cent cash rate will push the standard variable mortgage rate to 7.75 per cent and add $380 a month in repayments to the cost of servicing a $300,000 mortgage since this round of rate rises began.

Source: Sydney Morning Herald

The Reserve Bank of Australia yesterday raised official interest rates by 0.25 per cent to 3.5 per cent, the second rate rise in one month.

Within minutes of that announcement, the ANZ Bank moved to pass on the rate rise in full to their standard variable mortgage customers. The other three big banks also moved their rates up before the close of business yesterday.

ANZ and Westpac's standard variable mortgage are now set at 6.31 per cent, while Commonwealth Bank and National Australia Bank's rates are 6.24 per cent.

The two successive rate rises in the last month have added about $92 in repayments to a household with a typical $300,000 standard variable mortgage.

Source: Sydney Morning Herald

Visa today announced it will move to chip and PIN technology for all Australian Visa cards over the next four years, with signatures no longer accepted at the checkout from 2013, as part of a wide-ranging agenda to cut card fraud.

Visa’s General Manager for Australia and New Zealand, Chris Clark, said Visa was working with financial institutions and retailers to upgrade more than 14 million Visa cards in Australia, half a million merchant point of sale terminals and thousands of ATMs to chip and PIN technology.

“From January 2010, all new Visa credit cards issued in Australia will feature secure embedded smart chips to give Australians a higher level of confidence in the security of their transactions,” Mr Clark said.

“This will be followed by the upgrade of Visa debit and reloadable prepaid cards from January 2011,” he added.

“Chip technology will also offer banks and merchants the ability to provide their customers with benefits such as faster transactions, innovations such as contactless payments and the opportunity to store information such as reward programs on their cards.”

Mr Clark said the move to chip and PIN was part of a comprehensive seven-point security agenda that also includes initiatives to enhance the security of online transactions. Cardholders will be enabled to use a Verified by Visa password when shopping over the internet.

Online retailers will be required to capture the three-digit cardholder verification number when processing transactions, while small and medium sized businesses will be required to enhance their levels of data security.

Source: Visa

02/Nov/2009 - Aussies are stashing their cash
 

The first national study by Westpac into the social effects of the global financial crisis shows more than 32% of Australians are cocooning in the suburbs and even cancelling their Christmas travel, with over 80% cautiously stashing their cash in a major shift away from a decade of stress and excess.

Westpac spokesperson Jason Yetton, General Manager - Westpac Retail Banking, said the research reflects a cultural change in attitudes after a tough 12 months. “We’ve had the sea change and the tree change and now we see a trend towards people getting back to basics in the suburbs, and making it a lot more about them and their needs,” he said. 52% are spending what money they do have supporting their local businesses, with 26% opting to eat at neighbourhood restaurants and drinking at the corner pub.

A further 15% of people are looking to find a job closer to home. Australians attribute the shift to “think local, act local” to losing out in super and property values in the last twelve months. 40% of those who had received bad advice from rogue advisors blamed them for the downturn in their personal finances.

Source: Westpac

02/Nov/2009 - Most borrowers reject fixed rates
 

Most homeowners are choosing to stick with their variable rate mortgages with only ten per cent saying they are opting to fix their rate now.

The Reserve Bank is expected to raise interest rates by about two per cent over the next 12 months. An online poll by News Ltd last week indicated that 57 per cent of borrowers were happy to stay with their current variable rate mortgage with 19 per cent saying they would wait and see. 12 per cent were already in fixed rate mortgages and 10 per cent said they were switching to a fixed rate mortgage.

Fixed rate mortgages are about two per cent higher than current standard variable rate mortgages.

Source: The Daily Telegraph

The Sydney residential property market shows signs of continued improvement with good auction results from last weekend. 65 per cent of 459 properties listed for auction sold on Saturday, compared with 65 per cent of 351 last week. On the same weekend last year there were369 propertie listed for auction with 42 per cent selling on the day.

Melbourne results were affected by the Spring Racing Carnival but were still substantially better than the results from the same weekend last year. 68 per cent of 365 properties sold at auction, down from 79 per cent of 949 properties auctioned last week. Last year 49 per cent of 136 properties sold at auction in Melbourne.

In Adelaide, 49 per cent of 55 properties sold, with numbers up from last week and last year. In Brisbane, 50 per cent of 66 properties sold at auction on the weekend, up from last week and last year.

Source: Australian Property Monitors