Weekly Banking News Weekly News is a financial news summary prepared for Bank of Cyprus Australia by Infochoice Ltd. For information on Bank of Cyprus products and services please call 1300 660 550 from anywhere in Australia or logon to our web site at www.bankofcyprus.com.au
	Weekly News is a financial news summary prepared for Bank of Cyprus Australia by Infochoice Ltd. For information on Bank of Cyprus products and services please call 1300 660 550 from anywhere in Australia or logon to our web site at www.bankofcyprus.com.au Weekly News is a financial news summary prepared for Bank of Cyprus Australia by Infochoice Ltd. 20/Dec/2011 - Mortgage problems in decline Stable interest rates saw mortgages arrears levels decline through the middle of this year, according to Fitch Ratings. Arrears were down to 1.42 per cent of all mortgages in September, after being recorded in May this year at 1.77 per cent. While overall mortgage delinquency levels improved in all states, localities still doing it tough included Sydney's south-western suburbs, the NSW Central Coast and the Gold Coast in Queensland. The south-west of Western Australia was likewise still among the regions with higher delinquencies, and tourism destinations in coastal locations were increasingly in arrears. Source: Australian Broker News top 21/Dec/2011 - Investors still rushing for term deposits Investors continue to pull their money out of the stockmarket at record rates and ploughing their savings into term deposits. Australian term deposits have swelled by $276 billion since July 2007, growing at an annualised rate of 22.3 per cent. The local equity market, which was worth $1.4 trillion in mid-2007, lost about $243 billion over the same period. It is now worth about $1.157 trillion. Charlie Aitken, managing director at Bell Potter Securities, said there has been an "almighty switch" from equities to term deposits. At the peak of the market in July 2007, the term deposit market was worth $207 billion. That figure has since grown to $438 billion. Meanwhile, the return on the local equity market declined by 4.4 per cent a year over the same period. Source: Sydney Morning Herald top 21/Dec/2011 - Xmas shoppers choose debit over credit The Australian National Retailers Association (ANRA) surveyed 1000 Australians about their Christmas shopping plans and found most will use debit and cash to keep christmas debt to a minimum. "We have seen the trend of people choosing to pay down debt and save in the past few years and there remains little interest from consumers in adding weight to their credit cards," ANRA CEO Margy Osmond said. "Debit cards are increasingly popular, another indicator of people taking a sensible approach to Christmas and buying goods using savings already set aside during the year. Growth in debit card preference was up nine per cent from 2010." Source: The Age top 10/Nov/2011 - Average home loan size goes down The latest Australian Bureau of Statistics housing finance data, released yesterday, shows that the average home loan fell from $291,100 in July to $289,800 in August, and to $284,400 in September. According to CommSec economist Craig James, the fall in the average home loan size over the past 12 months, down 0.6 per cent, is the biggest year-on-year fall in a decade. While the number of dwelling commitments for owner-occupied housing rose by 2.2 per cent in September (in seasonally adjusted terms), the value of those commitments rose by just 0.7 per cent. There were a total of 51,821 dwelling commitments in September, worth $14.6 billion. Source: Banking Day 24/Oct/2011 - Aussie shoppers love to tap and go MasterCard Australia has announced that more than 1 million contactless PayPass transactions were recorded during the month of August. Customers can use their PayPass cards at some 42,000 merchant terminals nationwide, including JB Hi-Fi, Bunnings, 7-Eleven, Caltex, Dymocks and McDonald’s. MasterCard projects that all Australian MasterCard credit and debit cards will be PayPass-enabled by April 2014, as well as payment terminals at most major supermarkets, convenience stores, service stations, taxis and other retail points. Source: Contactless News top 24/Oct/2011 - Eftpos to go mobile Eftpos has reportedly revamped its technology so that customers can conduct transactions with mobile phones, contact-less terminals and online. The pilot of eftpos cards will be fitted with chip technology to emulate rival offerings as more shoppers turn to debit and credit cards to make cashless transactions. While eftpos accounts for a massive 85 per cent of all debit payments in Australia, the latest application is the first major change to eftpos’s functionality in 25 years, and follows a multi-million-dollar advertising campaign in June to reposition the brand as “the payment method of choice for small, everyday purchases.” Source: News.com.au For information on Bank of Cyprus products and services please call 1300 660 550 from anywhere in Australia or logon to our web site at www.bankofcyprus.com.au 13/Oct/2011 - Average credit card balance goes down The weakening trend in credit card spending continues, with Reserve Bank figures released yesterday showing that credit card balances grew by just 4.6 per cent in the 12 months to the end of August 2011. The annual rate of growth in card balances has now fallen in each of the past eight monthly periods. Average balances fell from $3312 in July to $3303 in August. However, both the average credit limit and the average monthly spend were up. According to analysis of the latest figures by MWE Consulting, credit cards made up 48.9 per cent of total card payments in August, while debit accounted for 39.5 per cent of card payments and charge cards accounted for 11.6 per cent. Source: Banking Day top 13/Oct/2011 - Frequent flyer points worth about 1 cent The Australian Consumer Association has slammed Australia's frequent flyer schemes, saying that most passengers would be better off just buying the cheapest flights on offer. Choice cited that Qantas made 60% of its profit last year selling points in its frequent flyer scheme to credit card companies and retailers. In a best-case scenario, travellers would have to spend $5,000 per month ($60,000 per year) on their credit card to get $1,000 worth of Frequent Flyer points, and if they spent an average amount - $1,000 a month - on their card, any points earned would be eaten up by credit card fees. Choice estimates the approximate value of a frequent flyer point at just one cent, with 19,800 points needed for a Sydney to Perth flight in economy, worth about $198. Source: Australian Business Traveller top 10/Oct/2011 - Savings tax break too complex Banks are complaining that the government’s new 50 per cent tax discount on interest earnings of up to $500 will require too much paperwork from households that only stand to make a small gain. Lenders also say the $500 cap - which will rise to $1000 in 2012-13 - is too low to give people a strong incentive to put more of their savings into interest-bearing assets. Under the scheme, Treasury has suggested the tax break would apply only to net interest income, after any costs from earning the interest have been subtracted. The Australian Bankers' Association (ABA) said forcing households to calculate net interest income would present them with a “compliance minefield”. The majority of people would not incur significant expenses in earning interest, the association said. Source: The Age   06/Sep/2011 - Fixed rate loans more popular in August Borrowers have responded to the aggressive cutting of fixed home loan rates over the past couple of months by refinancing with “cheap” fixed rate loans. Mortgage aggregator AFG reported yesterday that thirty-eight per cent of loans sold in August went to borrowers refinancing and 9.4 per cent of loans were on fixed terms – up from 7.9 per cent in July. According to InfoChoice, two-year fixed home loan rates came down by an average of 25 basis points to 6.87 per cent during August. Three-year rates fell by 27 basis points to 6.94 per cent, four-year rates fell by 33 points to 7.3 per cent, and five-year rates fell by 33 points to 7.38 per cent. Source: Banking Day top 07/Sep/2011 - Check on your mortgage stress levels The Australian Securities and Investments Commission (ASIC) is urging people to undertake a mortgage health check this month. “Most people who are suffering mortgage stress are still paying their mortgage,” says Delia Rickard, ASIC's senior executive leader for financial literacy. “With most people, the last bill they don't pay is the mortgage. But what they're doing is not paying other bills and building up huge credit card debt.” Borrowers experiencing difficulty should be wary of services charging high fees to rearrange your debts, supposedly to ease your burden. The chief executive of the Australian Bankers' Association, Steven Munchenberg, says: “If you're thinking about using an extension of credit to resolve changing circumstances or financial difficulties, you may find it useful to discuss these needs with your bank.” Source: Sydney Morning Herald 29/Aug/2011 - ASIC investigates left-over mortgage exit fees Early exit fees have been outlawed for all new loans signed since July 1. However, the ban does not apply to loans issued before the ban came into force. Some lenders were offering loans with exit fees of more than $5000 only months ago, and the Australian Securities and Investments Commission is now reviewing whether these fees may breach recent unfair and unconscionable contract laws. ASIC this month told the Senate's economic committee it was reviewing loans offered by 20 banks and non-authorised deposit-taking institution (non-ADI) lenders. “This may bring to light potential unconscionable or unfair fee breaches,” ASIC said in response to a question taken on notice. Source: The Age top 31/Aug/2011 - Term deposit rates falling Term-deposit rates have fallen by about 0.3 of a percentage point recently and bankers say they might fall further. Most people like to put their money in three- or six-month terms but if rates keep falling, you might need to think about going longer to lock in rates while you can still get 6 per cent or more. InfoChoice says 22 deposit takers have cut their six-month rates in the past month. Twenty-five deposit takers have cut their nine-month rates, with the average falling 0.35 of a percentage point from 5.53 to 5.18 per cent. Forty-three deposit takers have cut their one-year rates, with the average coming down 0.2 of a percentage point from 5.94 per cent to 5.74 per cent. Going against the trend, three-month rates have gone up by an average of 0.19 of a percentage point. Source: Sydney Morning Herald top 17/Aug/2011 - ASIC investigates CHOICE over One Big Switch Australia’s corporate regulator has launched an inquiry to determine whether or not CHOICE’s decision to break into broking breaches consumer protection laws. The Australian Securities and Investment Commission is currently looking to find out whether or not CHOICE’s involvement in the Big Bank Switch campaign means the consumer advocate needs to obtain a credit licence. Earlier this month, the self proclaimed ‘people’s watchdog’ teamed up with One Big Switch to launch the Big Bank Switch campaign, that encourages home buyers to find a better deal on their mortgage. Source: The Advisor   09/Aug/2011 - Changes announced for farm management accounts Primary producers affected by natural disasters will be able to draw on their farm management accounts within 12 months of making deposits without losing tax concessions, under the terms of a draft amendment to the Farm Management Deposit scheme released by the Government yesterday. The Farm Management Deposit, which was started in 1999, provides an incentive in the form of a tax concession to primary producers to save money earned in the good years and draw it down in years when farm income falls. Tax payable on primary production income is deferred if the income is deposited in a farm management account. Tax is payable when a withdrawal is made (and it is assumed the tax rate will be lower if the withdrawal is made in a bad year). Other changes proposed in the draft amendment include a provision to allow primary producers to hold farm management accounts with different financial institutions. Source: Banking Day top 11/Aug/2011 - Retirees need savings of $940K A couple wanting a “comfortable” retirement - where they can afford to have some fun, not just pay the bills - now needs more than $1000 a week, according to the Association of Superannuation Funds of Australia (ASFA) Retirement Standard. A “modest” lifestyle requires $600 a week. A couple, with each partner aged 60, would need to retire with a nest egg of about $535,000 to have only a modest lifestyle lasting as long as the official life expectancy of the partner likely to live longest - that is, 26 years (to 86) for the woman. If the couple wanted a comfortable lifestyle, they'd need to retire with about $940,000 in capital. Source: Sydney Morning Herald   01/Aug/2011 - Oversupply of houses in Melbourne Right now there are 43,000 properties for sale on the Melbourne market - the largest amount of stock for any capital city in Australia. This time last year there was just over 29,000 properties. And back in early 2010 there were only 21,000 properties for sale. The 43,000 includes a large proportion of new housing stock built by developers over the past two years. We simply won't see Melbourne house prices fall 40 per cent in this cycle unless the banks stop lending to all but the most secured borrowers and unemployment rises substantially. Source: The Age top 02/Aug/2011 - New home sales plummet New home sales suffered their heaviest monthly decline in five years in June 2011. According to the latest HIA, the number of new homes sold in June 2011 dropped by 8.7 per cent, the sharpest monthly decline since May 2006. “There has been widespread anecdotal evidence for some time that new home demand hit a wall in mid-2011 and today’s new home sales figures unfortunately confirm that situation,” HIA chief economist Harley Dale said. “Evidence is mounting that weakness in the new home sector is accelerating even with interest rates on hold.” Source: The Advisor top 04/Aug/2011 - Aussies renew love affair with debt Private debt rose by 2 per cent to $23,461 a person in the March quarter, according to the Australian Bureau of Statistics, with credit cards and mortgages the main culprits. According to the Reserve Bank, Australians owed a record $49.4 billion on credit cards in May. Just over a quarter of all household spending is now financed by credit-card debt. And the average mortgage is nudging $300,000 nationally but people in capital cities often borrow much larger amounts. Source: Sydney Morning Herald 26/Jul/2011 - Signs of life in Sydney property market The Sydney auction clearance rate reached its highest level of 2011 – and drawing close to corresponding figures recorded last year. There were 148 houses and units sold at auction on Saturday July 23, representing a clearance rate of 64 per cent, according the Home Price Guide. The July 16 to 17 weekend rate was only 53 per cent, indicating there may have been a strong turnaround in buyer-seller agreements in a short space of time. Real Estate Institute of Australia acting president Pamela Bennett asserted: "It is always difficult to know all the indicators, but the market has been quiet and low for a while and it gets to a point where people want to move on with their life; they see what they like and they want to buy." Source: Peach Home Loans top 27/Jul/2011 - First home buyers turn to investing More than 40 per cent of first home buyers are opting to buy an investment property rather than a home to live in, new research has found. According to data from Mortgage Choice, 77 per cent of first home buyers are making lifestyle sacrifices in order to turn their dream of home ownership into a reality. In comparison, 66 per cent of Gen X and baby boomer buyers are prepared to sacrifice their lifestyle in order to save faster. Mortgage Choice spokesperson Kristy Sheppard said the findings suggest the concept of the ‘Great Australian Dream’ is changing. “Is the Great Australian Dream still about buying a home, or is it about buying a property in general...or is it simply about investing in an asset they expect to bring in income and/or appreciate in value?,” Ms Sheppard said. Source: The Advisor 15/Jun/2011 - Cardholders choose debit over credit Consumers increasing aversion towards credit cards continues to be a feature of the monthly data on payment cards published by the Reserve Bank of Australia. Over the six months to April 2010, purchases with debit cards gained 130 basis points in the share of the value of payment card purchases from credit and charge card, Mike Ebstein, of MWE Consulting, noted in his monthly analysis of payments data. A related indicator of the aversion toward credit cards is the decline in the use of cash advances. Personal credit card cash advances fell below $10 billion over the year to April 2011, according to MWE. The average cash advance per account at $730 is down by six per cent over one year and 21 per cent over three years. Source: Banking Day top 14/Jun/2011 - Senate set to reject Swan’s exit fee ban The last-minute effort by sections of the mortgage finance sector to overturn regulations banning exit fees from July may be on the verge of achieving its goal. Nick Xenophon, an independent senator for South Australia, told Fairfax newspapers on Monday that he will vote with the Coalition to reverse the ban. A vote in the Senate to overturn the regulations requires one more vote. Assuming the Greens side with the Labor Party this will have to be that of Steve Fielding, who is in his last three weeks as a member of parliament (and who has two weeks of Senate sittings remaining). Senator Fielding’s position on exit fees remains unclear. Source: Banking Day   09/Jun/2011 - Cheque accounts not used for cheques A public relations campaign to begin preparing the community for the eventual demise of cheques got underway yesterday with the release of a consultation paper by the Australian Payments Clearing Association. Reserve Bank of Australia data shows around 270 million cheques were written in the year to March 2011, around half the level of 10 years ago. The value of cheques written in the last year was $970 billion, down from $1.6 trillion 10 years ago. APCA said that business operating in the property and business services’ sector were the most common users of cheques. Cheque use is also “relatively higher” in dividend and share dealings, property settlement and insurance, and in parts of the legal and accounting professions, APCA said. Source: Banking Day top 06/Jun/2011 - Relaxed rules for first home saver accounts Relaxed rules were announced this week for the First Home Saver Account scheme. The new rules are a great outcome for young people saving for a first home said James Bruce, Product Manager for ME Bank. “This is great outcome for first home buyers, this adds so much flexibility. If you find a home before the four statutory years is up you can buy it. You can even use your existing first home saver account to buy an investment property now, as long as you move into it within twelve months.” If you have previously owned a property before 1999 or an investment property that you have never lived in, you can still be eligible to open a first home saver account, said Mr Bruce. Source: Courier Mail   19/May/2011 - Shoppers angered by high card surcharges Two thirds of Australian retailers are slugging customers with a credit card surcharge as high as triple the actual payment fee it is meant to recoup. Banking researcher East & Partners found 28 per cent of Australian retailers now impose a surcharge on customers paying by credit card. The majority of retailers are charging customers at least 3 per cent to use Visa or MasterCard. This is despite the average trader paying fees of less than 1 per cent to Visa and MasterCard and 1.9 per cent for American Express transactions. Angry consumers have swamped consumer group Choice's website complaining of not being given notice of surcharges. Queensland Consumer Association spokesman Ian Jarratt said customers often paid by card to obtain loyalty points without realising the surcharge often outweighed the value of the points. Source: Courier Mail top 19/May/2011 - Homebuyers urged to bag a bargain Growing vendor discounts are helping potential home buyers to bag a bargain. According to new research by RP Data, sales volumes have been trending down since September 2009. At the same time, vendors are being forced to offer greater discounts for houses and units. In February 2011, sales volumes were 13 per cent lower than February 2010 and vendor discounting was recorded at 6.5 per cent for houses and 6.6 per cent for units. Across the capitals, vendor discounting levels were varied, however RP Data reported that there is a strong trend to indicate that discounting is increasing, with Sydney and Hobart the only exceptions. Source: The Advisor top 18/May/2011 - More hardship relief for borrowers Genworth Financial has expanded its hardship solutions package for borrowers that are struggling to get back on their feet due to the natural disasters. The new package expands existing initiatives to support extended loss of income, offering a range of repayment break options such as a 50 per cent repayment break for a further three months on qualifying loans. Genworth chief executive officer Ellie Comerford said “We recognised that flood-affected borrowers were likely to struggle for longer and leveraging our international expertise, we have developed a borrower relief package that recognised the terrible financial strain borrowers can face in the wake of natural disasters,” she said. Source: The Advisor top 17/May/2011 - Housing market sets new 10 year low New home-loan approvals plunged to a 10-year low in March to a seasonally adjusted 44,968, the lowest result since February 2001 and well below economists' expectations for a 2 per cent increase. Housing Industry Association chief economist Harley Dale said governments had to take action to support the industry. “The clearest signal in today's figures is the need for federal and state governments to step up to the plate and deliver on stimulus and reforms to reduce the cost of new housing,” he said. Master Builders Australia chief economist Peter Jones said recent interest rate rises and cautious consumers had dented demand for housing. Source: Herald Sun top 17/May/2011 - Victorian first home buyers can save $6K now First-time buyers may already be able to benefit from the Victorian government's 20 per cent stamp duty reduction, even though the change does not officially take effect until July. Enzo Raimondo, chief executive officer of the real estate body explained: “Settlement occurs on the day the balance of the purchase price is paid and the property’s title document is handed over to the buyer." For first-time buyers, this means that if their settlement date is July 1st or later, they will still be eligible for the 20 per cent stamp duty discount. Key criteria for the stamp duty cut include the fact it must be the buyers' primary place of residence and the total purchase price. The REIV suggests that the residential stamp duty reduction could save first-time buyers an average of $6,232 on the cost of a median-priced new residential property. Source: Peach Home Loans top 16/May/2011 - Fewer vendors choosing auctions There were fewer auctions held in Sydney this week - 290, down from 354 last week, with the clearance rate improving to 60 per cent from 55 per cent last week. On the corresponding weekend last year, there were 515 auctions held in Sydney with a clearance rate of 64 per cent. In Melbourne, there were 513 auctions of residential properties held on Saturday, down from 604 last week, with 65 per cent producing a sale, up from last week’s 61 per cent clearance rate. On the same weekend last year in Melbourne, 72 per cent of 820 properties sold at auction. Source: Australian Property Monitors top 16/May/2011 - Credit cards still as popular as ever Australia’s total credit card balance has grown 42 per cent in five years, according to data from the Reserve Bank, and the number of cards is also growing and about to top 15 million cards on issue for first time. Oracle Lending’s Angelo Bennet said his company is seeing more people wanting to consolidate their card debts into one loan. “They are struggling to meet minimum repayments let alone pay off debt,” he said. “Consolidating can be painful if the original card is kept and spending continues.” Veda Advantage said 76 per cent of adults have a credit facility of one type or another. 64 per cent have a credit card, with 34 per cent having a home loan. Source: The Daily Telegraph   27/Apr/2011 - Queensland flood victims start repaying mortgage Three month mortgage holidays for flood and cyclone affected homeowners are ending now and thousands of Queensland families face a big struggle to avoid losing their homes or going bankrupt. Some Queensland families have lost everything said Derek Tuffield, General Manager of Lifeline’s Darling Downs and South West Queensland office in Toowoomba. “I’m working with a number of families now who have just about been wiped out.” “The people who are hurting now are the people who aren’t working and didn’t get a good payout from insurance. The banks typically gave everyone three month repayment holidays on their home loans, those breaks are coming to an end now,” Tuffield said. Lifeline's Financial First Aid Line 1300 370 255 (Monday-Friday 10am - 6.00pm) is staffed by experienced financial counsellors and is a free service available for anyone suffering financial stress. Lifeline’s 24 hour/365 day telephone counselling service number is 13 11 14. Source: Sunday Mail top 27/Apr/2011 - Queensland prices make refinancing challenging Queensland property prices are falling, making refinancing problematic. Sunshine Coast apartments are off 20 per cent and property prices in other parts of Queensland are down. Brisbane house prices fell a solid 3.3 per cent in the three months to the end of February according to property researchers RP Data. The reason is lack of demand. The number of homebuyers in the market is drying up. Monthly property sales are at 40 to 50 per cent of their long term averages in some parts of Queensland. The Sunshine Coast and the Gold Coast are among the English-speaking world’s most overvalued residential property markets, according to a recent report by US based property researchers Demographia. Source: Sunday Mail   07/Apr/2011 - Mortgage sales returning to normal Mortgage sales last month were 10 per cent down on the same month last year according to the latest AFG Mortgage Index. Refinancing was steady at 37 per cent of new mortgage sales, suggesting that borrowers are not rushing to switch loans despite a flurry of offers currently in the market. Queensland mortgage sales were 16 per cent down on the same time last year, while NSW bucked the national trend and recorded no decline on mortgage sales compared with February 2010. “After two months of extraordinarily subdued mortgage markets, we are now seeing a return of buyer confidence,” said AGF general manager Mark Hewitt. Source: Herald Sun top 07/Apr/2011 - Aussie housing bubble is deflating Australia’s housing bubble is deflating but not bursting despite interest rate hikes during 2010 which are causing tremendous stress among mortgagees. CLSA analyst Brian Johnson said “I suspect that people who borrowed when the cash rate was 3 per cent are under tremendous pressure.” Official data released yesterday indicates a 5.6 per cent drop in housing loan approvals in February to a ten year low. Source: The Daily Telegraph top 07/Apr/2011 - No exit fees means better comparison rates The banning of exit fees means comparison rates will give a better guide to the cost of a mortgage. So-called back-end charges, such as deferred establishment fees, early termination fees and exit fees, have not been included in comparison rates (because they are not paid by all borrowers) and this has raised questions about their reliability. Now many of those fees will no longer apply. Comparison rates have always had their critics, who argue that the rate is based on a formula that only looks at a specific loan profile. They have also argued that because they do not include the back-end fees, they can be misleading. An amendment to the National Consumer Credit Protection Act was passed on March 23, banning exit fees on all home loans sold after July 1 this year. The ban applies to fees payable on the termination of the loan. Source: Sydney Morning Herald top 06/Apr/2011 - Borrowers reject fixed rates for variable Variable rate home loans are attracting more interest from new borrowers than they have since October last year as borrowers reject fixed rates said Mortgage Choice spokesperson Kristy Sheppard. A widening array of special lender offers such as variable interest rate and loyalty discounts, higher maximum LVRs and payments of various switching and establishment costs are deterring a growing proportion of new borrowers from taking up fixed interest rate home loans. People are either more confident of cash rate stability, more confident of their ability to ride predicted interest rate hikes or they have weighed up the pros and cons of going with variable over fixed and decided the benefits are worth any risks. Standard variable home loans still ranked number one despite demand falling four percentage points in March to 30% of loan approvals. Ongoing discount home loans (where the rate is discounted over the entire loan term usually in return for an annual fee) finally overtook basic variable loans for second position, at just over 25% and just under 25% respectively. Demand for line of credit home loans - often popular with investors - remained relatively steady at 5% while introductory rate home loans accounted for a solid 4%, up from 1%. Source: Mortgage Choice top 05/Apr/2011 - More borrowers fall behind with repayments According to the latest report by Standard & Poor’s, loans underlying Australian prime residential mortgage-backed securities that are greater-than-30 days in arrears jumped 21 basis points to 1.59 per cent from 1.38 per cent in December 2010. In addition, subprime RMBS arrears climbed 126 basis points to 11.45 per cent during the same period. “The proportion of loans that are greater-than-30 days in arrears for January soared to the highest level seen since April 2009. Typically, Christmas spending would be the key contributor to the higher arrears in the months after Christmas. This time, however, it may not be so because we believe households have been prudent,” Standard & Poor’s credit analyst Vera Chaplin said. “The series of natural disasters that started around end-2010 may have had a greater impact, disrupting some borrowers’ mortgage serviceability. As the full impact unfolds, and with higher mortgage rates and rising living costs, we expect rising arrears in the coming months." Source: The Advisor top 04/Apr/2011 - Not enough buyers in auction market Supply continues to far outstrip demand in the residential auction market. In Sydney this weekend, the auction clearance rate dipped to 57 per cent, from 59 per cent last week. 579 properties were listed for auction in Sydney, up from 329 last week. In Melbourne, the clearance remained steady at 60 per cent. 770 properties were put up for auction, down from last week’s 821. 37 per cent of 45 properties were sold under the hammer this weekend in Adelaide and 18 per cent of 45 in Brisbane. Source: Australian Property Monitors top 04/Apr/2011 - ASIC confirms older people can borrow ASIC Commissioner Peter Boxall said the industry regulator was concerned by reports of older borrowers whose employment will reduce, or cease, before the end of the loan term, being refused loans because some lenders are adopting an unnecessarily restrictive approach to meeting the responsible lending requirements. “Undertaking the range of enquiries required by the legislation will often reveal other ways that they will be able to repay the loan,” he said. “The new responsible lending requirements in the National Credit Act are an important protection for consumers, but they should not be an inflexible barrier to credit for any segment of the population, and should not prevent consumers obtaining credit that they can reasonably afford.” The changes that ASIC has made include clarifying that a conclusion of substantial hardship (where a borrower appears to have no obvious continued income stream for the full life of the credit contract) can often be rebutted with reasonable enquiries about the borrower's financial situation. Source: The Advisor top 04/Apr/2011 - Fewer houses to be built in 2011 The Housing Industry Association’s chief economist Harley Dale said housing starts are expected to drop by 15 per cent in 2011, wiping out a majority of the short-lived, stimulus driven gains of last year. “The fate of residential building in 2011 has been all but sealed by higher interest rates, continuing tight credit conditions, and a complete lack of progress on policy reform to reduce excessive new housing costs,” Mr Dale said. "Housing starts have only increased in two of the last ten years. This fact delivers a very poor scorecard on new home and rental market affordability which especially hurts aspiring first home buyers and lower income households. Source: The Advisor   30/Mar/2011 - Housing market to bounce back in 2011 The residential property market is showing signs of a strong recovery in 2011 according to Australian Property Monitors senior economist Andrew Wilson. Sydney will continue to perform well this year, with activity driven by upgraders and investors. "Early signs of stabilisation and recovery are emerging particularly in the Sydney market. Melbourne is showing some resilience in what was expected to be a quiet period for that city," Mr Wilson said. "Brisbane is the big surprise with reasonable levels of buying activity despite the damaging effects of the January floods. The Perth housing market however remains quiet with indications that buyer sentiment in that city is still flat. The high number of properties for sale in other cities indicates a continued stock hangover from the low buyer activity levels that ended 2010." According to Mr Wilson, the mid-price and low price segments of the market remain strongest in Sydney and Melbourne, with some activity being reported in the high price segment for both the Perth and Brisbane housing markets. Source: The Advisor 28/Mar/2011 - Auction clearance rates remain flat Auction clearance rates remained subdued this week. In Sydney there were 335 properties listed for auction this weekend with 61 per cent selling on the day, compared with 59 per cent last week. On the same weekend last year, the clearance rate in Sydney was 72 per cent. In Melbourne, 822 properties were listed for auction this weekend with 59 per cent selling. Last week in Melbourne, 68 per cent of properties listed for auction sold on the day. Last year the clearance rate for the corresponding weekend in Melbourne was 68 per cent. In Adelaide, 34 per cent of 49 properties sold at auction and 31 per cent of 48 properties sold at auction in Brisbane. Source: Australian Property Monitors to 28/Mar/2011 - Housing blocks now too expensive for buyers According to a new study by the National Land Survey Program, at the end of last year, just three out of 10 lots for sale in new housing estates were accessible to average-income first home buyers. In Melbourne just 26 per cent of lot sales met the first home buyer affordability benchmark of $200,000 – down from 90 per cent two years ago. Queensland fared worse than Melbourne, while Adelaide and Perth were the only two capital cities found to be building enough affordable land in new estates. Residential land sales fell by 74 per cent in the year to September 2010, yet median land prices grew by 25 per cent to $225,750. Source: The Advisor top 28/Mar/2011 - Banks underreporting card fraud numbers Queensland Police Deputy Superintendant Brian Hay said banks fail to properly report credit card fraud for fear of damaging their reputations. Australian Crime Commission data indicates that debit card fraud increased 50 per cent in Australia in the three years to 2009. International crime gangs, some with links to terrorist groups have targeted ethnic communities and inner city ATMs in Melbourne say police. A police taskforce has broken a $100 million Eftpos skimming racket with 56 arrests. At least seven ATMs and two Eftpos machines have been skimmed in recent months in Melbourne say police. Source: Herald Sun   24/Mar/2011 - Australians saved $3300 each last year Australian households saved, in aggregate, $74 billion last year, 10 per cent of disposable income, or an average of $3300 for each of us. Five years ago, Australian households spent every dollar of income, and at times a bit more. During the confident times that preceded the GFC, many people reduced their saving and increased their borrowing. The dangers, even the folly, of that strategy were exposed in 2008 and early 2009. Now holdings of financial assets, particularly bank deposits, are increasing and debt is being repaid. More people are ahead of their mortgage repayment schedules and paying off credit card balances in full each month; fewer are borrowing against the value of the family home to spend on consumer goods. The number of Australian households that have stepped up saving has increased more than in other countries. Source: The Australian top 24/Mar/2011 - David Jones customers like their Amex card David Jones yesterday reported a rise of 10 per cent in commission revenue and a 7.5 per cent rise in EBIT profit from its credit card alliance with American Express. The department store chain said it earned commissions from Amex of $25.3 million in the half year to January 2011 and an EBIT of $22.8 million. In commentary published with the results, David Jones said the David Jones American Express Card “obtained a material share of the new credit card account openings in the total market, since its launch in October 2008”. What material means, however, and how many cards this represents is not something DJ or American Express care to elaborate on. Reserve Bank of Australia data shows an increase of around one million new credit cards, across the market, in the period since the launch of the co-brand Amex (which replaced the David Jones charge card.) In early 2008, David Jones had (or was rumoured to have) around 800,000 store card customers, half of them active. Source: Banking Day top 23/Mar/2011 - Borrowers looking for no deposit loans Enquiries for no deposit home loans have increased almost 30 per cent since the start of the year according to data from Experian Hitwise. There has been a 28 per cent rise in searches containing “no deposit loans” since January 1, 2011, while no deposit searches this month were up 57 per cent. “First home buyers are looking to get into the property market but many are trying to do so by borrowing the whole cost of the property,” Loan Market Group’s chief operating officer Dean Rushton said. “However 100 per cent home loans were justifiably the first products to go with the GFC and those enquiring about this product will not get a loan. Lending restrictions which require genuine savings contributions of around five per cent towards the property purchase means these people are just going to have to work on building up their home loan deposit.” Source: The Advisor top 21/Mar/2011 - Sluggish auction results in all capitals Auction clearance rates improved slightly this weekend but remain well below last year’s results. In Sydney 524 residential properties were listed for auction, above last week’s 451, with 62 per cent selling on the day, up from 59 per cent last week. On this weekend last year 76 per cent of 455 properties listed for auction in Sydney sold on the day. In Melbourne there were 895 properties listed for auction with 65 per cent selling, up from 61 per cent on the long weekend last week. Last year in Melbourne, 80 per cent of 880 properties listed for auction were sold on the day. In Adelaide 48 per cent of 45 properties sold at auction and in Brisbane just 25 per cent of 36 properties were sold under the hammer this week. Source: Australian Property Monitors   24/Feb/2011 - Australians saving more and more The household saving ratio - saving as a proportion of household disposable (that is, after-tax) income - is the highest it has been in more than 20 years. Australian households are managing to save 10 per cent of their disposable income. The household saving ratio was at 15 per cent in the early 1980s, but then it fell for more than two decades to reach a low point of minus 2 per cent in the early noughties. Since 2004 household disposable income has grown strongly, averaging 7.3 per cent a year in nominal terms. Source: Sydney Morning Herald top 21/Feb/2011 - New records being set for north shore property Record residential property prices have been set in four north shore Sydney suburbs - Warrawee, Gordon, Killara and Pymble - over the past 10 months. Bremon in Warrawee topped the records, selling for $11.5 million to mining entrepreneur Jerry Ren last week. The highest price elsewhere on the upper north shore was $7.8 million, paid last November for a 1930s Killara house, Wharncliffe, on Springdale Road. At Pymble, a six-bedroom Georgian-style house, tennis court, pavilion and pool, sold for $7.25 million last March. Aberdour, the 1901 Federation residence on 3300 square metres at Gordon, was sold late last year by Mark Worrall of Keybridge Capital and his wife, Jacqueline, for about $6 million, bettering the suburb's previous record of $5 million. Source: Sydney Morning Herald   03/Feb/2011 - Beware rolling the car loan into a mortgage The lowest interest rate for borrowing money to buy a car will usually be through your home loan but financial planner from Roskow Independent Advisory, Matthew Ross, says only the most disciplined borrowers should consider this approach. Unless they have a plan to pay lots of extra repayments, you could be doubling the cost of your car. ”If you pay $35,000 off over five years, the amount of interest you'll pay on an 8 per cent fixed rate will be $8400. So a $35,000 car has cost you $43,400. [But] if you roll [the car loan] into your mortgage and take 25 years to pay it off, you'll pay $36,400 interest, so the car will end up costing you $71,400. You're doubling the cost of the car.'' Source: Sydney Morning Herald top 02/Feb/2011 - Perth housing market still weak The Australian Bureau of Statistics (ABS) house price index rose 0.7 per cent in the December quarter, compared with market expectations of a 0.1 per cent fall. The December quarter result was better than the 0.3 per cent fall in the previous quarter but still indicated that house prices were showing "very sedate improvements", Commsec economist Savanth Sebastian said. The numbers also showed that successive cash rate hikes by the Reserve Bank of Australia (RBA) in 2010 had worked, he said. Nomura Australia chief economist Stephen Roberts said the figures were stronger than expected, particularly the quarterly rises in Melbourne and Sydney. He said the weakness in Perth may have been due to a "tail-end reaction" to the global financial crisis and expected a rebound in 2011. "I wouldn't expect Perth house prices to remain weak.” Source: News.com.au top 01/Feb/2011 - City house prices stagnating Home prices in capital cities rose by just 0.2 per cent in the last quarter of 2010, according to the RP Data-Rismark Hedonic home value index. Rismark managing director Christopher Joye said the capital city housing market had been shaken by four interest rate rises in 2010 that took the cash rate to 4.75 per cent, up from 3.75 per cent, the year before. “The capital city housing market very clearly peaked in May 2010 and remains below this point today,” said Joye. The most expensive capital city was Sydney ($525,000), followed by Canberra ($510,000), Melbourne ($505,000), Darwin ($481,000), Perth ($465,000), Brisbane ($435,000), Adelaide ($387,000) and Hobart ($325,500). In the regional markets, which cover the about 40 per cent of homes not in the capitals, dwelling values rose by 0.8 per cent during 2010, the survey showed. Source: Herald Sun top 01/Feb/2011 - Cash rate remains steady at 4.75% The cash rate remains unchanged at 4.75% following the RBA's February meeting. The Reserve Board last moved the cash rate by 0.25% back in November last year. The RBA felt that the cash rate was at the appropriate level at the moment considering recent events. It stated that the flooding in Queensland and Victoria would have a temporary adverse effect on economic activity and prices, with inflationary pressures within the target range of 2-3%. This is good news for borrowers who have weathered four increases over the last 12 months with the official cash rate increasing from 3.75% in December 2009 to its current level at 4.75%. InfoChoice's benchmark for standard variable rate home loans is currently 7.72% and while lenders are not expected to move their rates in relation to today's cash rate decision we will continue to monitor this space. Source: infochoice.com.au   05/Jan/2011 - Half will still have mortgage in retirement Almost half of all Australian households will be paying off their mortgage in retirement. According to new research by RaboDirect, 49 per cent of surveyed respondents said they would be older than 60 before they finish paying their mortgage. The survey by RaboDirect, a subsidiary company of Rabobank Australia, questioned people about their attitudes and behaviour towards debt and savings. The results found that a significant portion of Australians have a low level understanding of many financial services and products. About half the survey thought transaction and savings accounts were the same thing. Source: The Advisor top 04/Jan/2011 - Adelaide house prices out of reach Australian Bureau of Statistics figures show that Adelaide's median house price has jumped 233 per cent since 1994 until the end of the September quarter this year from $112,000 to $373,500. Official Valuer General figures recorded Adelaide's median house price to be even higher at $400,000 during the September quarter this year. During the same 17-year period, ABS figures show the average owner occupier home loan in South Australia has risen 195 per cent while average weekly earnings across the state have only risen 88 per cent. Real Estate Institute of South Australia president Greg Nybo said the figures proved SA was a sound destination for property investment but the growing gap between house prices and wages was impacting housing affordability. Source: Adelaide Advertiser top 04/Jan/2011 - Two incomes needed to buy a home People with single incomes are basically being locked out of the property market because prices are continuing to rise. Bank SA general manager Chris Ward said first-time buyers were often now forced to look beyond their individual savings to crack into the market. "What we are seeing is those in a relationship are finding it easier - two salaries are better than one," he said. "Mum and dad or grandparents who have built equity can also help younger people get into home ownership through a different structure of a loan, such as a guarantee." Source: Adelaide Advertiser top 22/Dec/2010 - Mortgage problems on the rise Arrears on home loans are on the rise, with the highest arrears for once in Western Australia and Queensland. An analysis by Fitch Ratings of a much larger pool of home loan arrears data than used previously shows that as of September 2010 one per cent of borrowers were one month or more behind on their scheduled balance. Fitch said that since delinquent borrowers tend to have above-average loan balances 1.54 per cent of the total mortgage balance is not performing. The data covers around $155 billion in home loans and around 13 per cent of the national mortgage market. It is a larger sample than earlier reports as it also includes the arrears data on the “internal securitisations” undertaken by banks as one of the responses to the financial crisis. Fitch said Western Australia and Queensland experienced “a remarkable deterioration in performance over the last year”, with arrears of 30 days or more increasing to 1.97 per cent and 1.54 per cent respectively in September 2010 (and versus 1.37 per cent and 1.12 per cent in September 2009). The ratings agency said that districts historically labeled as the “worst performing regions” have been impacted the most by the increasing interest rates. It said South Western Sydney and the Central Coast north of Sydney, the Gold Coast in Queensland and the South West region in Western Australia are still experiencing delinquency rates far above the national average. Fairfield-Liverpool continues to be the worst performing region in Australia. Source: Banking Day top 22/Dec/2010 - Demand for houses still outstripping supply The Housing Industry Association’s updated projections of the underlying demand for housing suggest that Australia built 22,000 too few dwellings in 2009/10, with a projected deficit of 16,800 dwellings in 2010/11 and 21,000 dwellings in 2011/12. “In the longer term Australia’s housing market is underpinned by the immutable forces of insufficient supply and robust underlying demand,” HIA chief Andrew Harvey said. Looking forward, Mr Harvey said supply-side factors such as the increasing scarcity of land in the main urban centres in Australia will continue to play a major role in driving Australia’s housing prices. “We need to be clear that supply side obstacles which prevent housing construction from keeping pace with the rate of household formation will see Australian burdened with a growing under-supply of housing and a resultant worsening affordability problem,” said Mr Harvey. “Governments at all levels need to increase their efforts to address these supply side issues as a matter of urgency,” he said. Source: The Advisor top 21/Dec/2010 - Auctions slow down for xmas The auction market continued to wind down for Christmas. There were 402 residential property auctions held in Sydney on Saturday with 50.6 per cent producing a sale. Those results were down on last week when 50 per cent of 609 auctions in Sydney produced a sale. Last year on the same weekend 70 per cent of 322 auctions produced a sale. In Melbourne there 648 residential property auctions held on Saturday with 53 per cent producing a sale on the day. Last week 70 per cent of 1246 properties sold at auction in Melbourne. On this weekend last year, 77 per cent of 603 auctions held in Melbourne produced a sale. There were 31 auctions held in Adelaide with ten properties selling. In Brisbane, 8 out of 52 properties sold at auction on Saturday. Source: Australian Property Monitors   14/Dec/2010 - Fixed rate loans more popular The proportion of homebuyers taking out a fixed rate loan of two years or longer grew to 6.9 per cent in October compared to 4.4 per cent in the September, the biggest number since July 2009, according to the Australian Bureau of Statistics. 50,000 mortgages were taken out in October - the largest number since January. First homebuyers made up just 15.4 per cent of all loans granted in October, the smallest proportion since July 2004. Sydney real estate agent Charles Bailey said the market has come down about 10 per cent in the past month or so. Source: Courier Mail top 13/Dec/2010 - Melbourne auction boom continues There were disappointing auction results in Sydney this weekend with just 49 per cent of the 632 houses put up for auction selling on the day. Last week 53 per cent of 683 properties sold at auction in Sydney. On the same weekend last year, 64 per cent of 527 properties sold at auction in Sydney. There was another bumper weekend for auctions in Melbourne with 1254 properties going under the hammer and 56 per cent selling on the day. Last week in Melbourne 68 per cent of 1198 properties sold at auction in Melbourne. In Adelaide 28 per cent of 72 properties sold at auction. In Brisbane just two out of 86 properties sold at auction on the weekend. Source: Australian Property Monitors   25/Nov/2010 - Aussies holding on to the home longer Property owners in Australia are holding onto their properties much longer according to research by RP Data. Between the years 2000-2005, the average holding time for a property remained relatively flat at around 6.5 years for houses and six years for units. However since this time, the average length of tenure has shown a consistent upwards trend. “The reason for steady average length of tenure between 2000 and 2005 is due to value growth which was strong over the period, as well as affordability - as a result, there was greater market speculation in the market and property owners were prepared sell more frequently,” RP Data research analyst Cameron Kusher said. Data for the year to August 2010 shows that houses sold over this period were owned on average for 8.3 years, while units were owned for 7.2 years. Ten years prior, houses on average, were owned for 6.8 years and units for 6.2 years. Across each capital city the average length of tenure has increased over the past five years. Nationally, the average hold period for houses has increased by 1.7 years during the past five years and by 1.4 years for units. During this period, the average holding time for houses has increased by as much as 1.9 years in Sydney and Canberra and by as little as 1.1 years in Melbourne. Across the unit market, the average length of tenure has increased by the lowest amount in Melbourne (0.5 years) and by as much as 2.2 years in Hobart. Source: RP Data 24/Nov/2010 - We are coping with rate rises Australian households are doing a very good job coping with rate rises according to new research by ratings agency Fitch Ratings. After three rate rises to May 2010, only low doc borrowers were showing signs of mortgage stress. Borrowers currently in arrears on their mortgage edged up to a new record high of 3.97 per cent, above the previous high level of 3.95 per cent set in September 2008 when standard variable mortgage rates were about 9.45 per cent. The impact of interest rate rises has been lower than expected said Fitch Ratings. Fitch measure delinquencies on home loans funded by securitisation. Source: The Ag   22/Nov/2010 - Treasury officials fear housing bubble A treasury official had advised the government that the possibility of house price depreciation, the so-called popping of the bubble, is the ‘elephant in the room’ of the Australian economy and is a risk that must be taken seriously. A group of senior treasury managers discussed the issue and the risks of debt to the economy in a series of important emails laying the groundwork for the advice to the new government. The emails reveal that the officials fear international financial shocks or other causes could combine with high household debt to cause severe shocks in the economy. Source: The Australian 22/Nov/2010 - Bumper auction weekend in Melbourne The Sydney auction market continues to deliver poor clearance rates for relatively high numbers of properties being listed for auction. There were 636 residential property auctions in Sydney on Saturday, up from 590 last week, but the clearance rate declined from 53 per cent last week to 52 per cent. On the same weekend last year, 68 per cent of 446 properties sold at auction in Sydney. Melbourne had another bumper auction weekend, with 1031 properties listed for auction and a clearance rate of 55 per cent, which dipped slightly under pressure from more supply. Last weekend, 60 per cent of 947 properties sold at auction in Melbourne. On this weekend last year, 75 per cent of 719 properties sold at auction in Melbourne. In Adelaide, 40 per cent of 83 properties sold at auction on Saturday in steadily improving results. In Brisbane, the clearance rate improved to 22 per cent of 130 properties put up for auction. Source: Australian Property Monitors   21/Oct/2010 - No housing bubble – yet – says RBA Australia’s housing prices are not yet an asset bubble according to the Reserve bank of Australia’s financial stability chief Luci Ellis who said the RBA was searching for danger signs of a bubble but couldn’t see any. She set out new detailed data on housing loans suggesting that loan-to-valuation ratios are rising because there are fewer low-ratio loans, not because there are more high-ratio ones. Ellis said the property bust in the US was because one group of US borrowers was taking out loans they could not pay back. Banks will need to report more about “the concentrations of risk, not just what is happening on average,” she said. Source: Banking Day top 18/Oct/2010 - Good auction results in Sydney and Melbourne There were 517 residential properties listed for auction in Sydney on Saturday with 58 per cent selling on the day. Those results were broadly similar to last week’s (when 62 per cent of 528 properties sold at auction in Sydney) and better than on the same weekend last year when 67 per cent of 297 properties sold at auction in Sydney. Melbourne had a reasonable auction weekend with 750 properties listed for sale by auction on Saturday and 69 per cent selling. Last week 63 per cent of 851 properties sold at auction in Melbourne. On this weekend last year, 76 per cent of 681 properties sold at auction in Sydney. 60 per cent of 61 properties sold at auction in Adelaide this weekend. In Brisbane, just 14 per cent of 72 properties sold at auction this weekend. Source: Australian Property Monitors top 18/Oct/2010 - Australia- a nation of savers There is more than $1.4 trillion now on deposit at Australian authorised deposit taking institutions, up from $1.08 trillion in October 2007. Australians are cutting back on gambling, cigarettes and alcohol in preference for small luxuries like hotel accommodation, watches and clocks. New personal loans and loans for investment have plummeted. Super contributions have also gone down and retirees are withdrawing less from super. Source: Herald Sun   14/Oct/2010 - First home buyers priced out of market New loans for the construction of housing fell by one per cent in August and loans to buy them fell 2 per cent despite new home approvals climbing one per cent for the month according to the latest data from the Australian Bureau of Statistics. Loans for new homes have been falling for ten months. First-home buyers accounted for just 15.5 per cent of housing finance commitments, the lowest proportion since mid-2004. JP Morgan economist Helen Kevans said first-home buyers were largely priced out of the market. First-home buyers accounted for 28.5 per cent of all home loans -- a record high -- as recently as May last year. Source: Herald Sun top 13/Oct/2010 - Rates and prices predicted to keep rising Australian house prices will rise between 9 and 20 per cent in capital cities over the next three years according to new research by BIS Shrapnel. Prices in Brisbane are expected to rise 15 per cent and Hobart 13 per cent. Prices in Perth, Sydney and Adelaide are predicted to grow by up to 20 per cent. Melbourne Darwin and Canberra are predicted to add about 9 per cent. BIS Shrapnel said a strong economy and undersupply on new housing will underpin price growth over the next three years. BIS Shrapnel also predicts that standard variable mortgage interest rates will keep rising and peak at 9.1 per cent in 2013. Source: The Age top 12/Oct/2010 - Sydney crippled by mortgage repayments Sydney households are spending three quarters of their average monthly income on mortgage repayments. A survey of global cities found that Sydney residents spend a greater percentage of their income on mortgage repayments than any other city. New York residents spend, on average, less than half of the monthly income on mortgage repayments, while London residents spend less than two thirds. The Sydney median house price is $626,444 with residents spending as much as $4,123 on monthly mortgage repayments. The RBA’s head of financial stability department, Dr Luci said rising property prices were forcing Sydneysiders to spend more of their income on mortgage repayments. The growth in dwelling prices has reduced over the recent months with the more expansive suburbs showing the highest result, Ms Ellis said. Source: The Daily Telegraph top 12/Oct/2010 - Housing market contracting There were 48,028 approvals to intending owner-occupiers to buy homes in August, seasonally adjusted, the Australian Bureau of Statistics said yesterday, up 1 per cent from July, but down 22.8 per cent from a year earlier and 21.7 per cent below the average for 2009. Lending to home-buyers is still low and lending to investors is not strong. The value of fixed loans to investors to buy dwellings fell 2.0 per cent, seasonally adjusted, the ABS said. The average size of loans to owner-occupiers, excluding refinancing transactions, rose 9.8 per cent over the year to August, from $277,600 to $304,800. Source: Sydney Morning Herald top 11/Oct/2010 - Auctions kicking goals for vendors Auction results bounced back strongly this weekend after disruptions from football finals over the last few weeks. In Sydney there were 533 residential properties put up for auction on Saturday with 61 per cent selling on the day, up from 54 per cent of 194 last week. On this weekend last year, 67 per cent of 343 properties sold at auction in Sydney. In Melbourne, 863 properties were listed for auction on Saturday with 63 per cent selling under the hammer. Last week, 67 per cent of 627 properties sold at auction in Melbourne. On this weekend last year, 78 per cent of 698 properties sold at auction in Melbourne. Adelaide had a rare big auction weekend with 75 properties put up for auction and 53 per cent selling on the day, up from last week when 46 per cent of 31 properties sold at auction in Adelaide. In Brisbane, 86 properties were put up for auction, with 12 per cent selling on Saturday. Source: Australian Property Monitors   07/Oct/2010 - Football affects auction results There were just 195 residential properties put up for auction in Sydney last weekend when the NRL Grand Final took place. 54 per cent of those properties sold on the day, down from the week before when 58 per cent of 651 properties sold at auction in Sydney. Last year on NRL Grand Final weekend, 75 per cent of 172 properties put up for auction sold on the day. Football also affected auction results in Melbourne with the AFL Grand Final replay on Saturday. Nevertheless, 646 properties were listed for auction, with 61 per cent selling under the hammer. Last week there were just 44 properties listed for auction in Melbourne due to the AFL Grand Final. On this weekend last year, 78 per cent of 565 properties sold at auction in Melbourne. Source: Australian Property Monitors top 06/Oct/2010 - Stick to short term deposits Investors should focus on short-term deposits or floating-rate securities to protect themselves against coming interest rate rises despite the Reserve Bank of Australia (RBA) leaving rates on hold today, says fixed-income broker FIIG Securities. FIIG Securities Managing Director Jim Stening said even though the RBA had left the cash rate unchanged at 4.5 per cent, a stream of recent domestic economic data pointed to a strong underlying Australian economy that could soon translate into higher rates. “The RBA has made it very clear they are poised to lift rates this year and they will be very sensitive to indications of strong growth, especially if global data starts to improve,” Mr Stening said. “They are on alert because there are some inflationary pressures and the trend towards households restoring their balance sheets has stalled. So my advice to investors is to keep deposits short and allocate longer term investments to floating rate bonds rather than fixed for the time being until the picture is clearer.” Source: FIIG Securities top 05/Oct/2010 - The property bubble deflates The Aussie property bubble is deflating but slowly and very gently. Capital city prices are down 1.2 per cent since May when they peaked after 17 months of uninterrupted growth according to data released last week by RPData/Rismark. Sydney, Canberra and Hobart prices all held their ground over the last three months but Adelaide but prices fell in the resource state capitals Perth, Brisbane and Darwin where prices rose the strongest during the resources boom. Some economists have predicted that prices could fall by as much as 40 per cent as interest rates rise. Rates are expected to rise by up to 1.5 per cent over the remainder of this year and next. Other economists are predicting a softening of prices and a slight decline in real terms as rates peak. Source: Herald Sun   15/Sep/2010 - Rates expected to bite more borrowers More Aussies are expected to fall behind on mortgage repayments in the next three months, says big ratings agency Fitch, because rising interest rates are beginning to hurt borrowers. Arrears of more than 30 days on the loans underlying prime residential mortgage-backed securities rated by Fitch dropped in the second quarter to 1.32 percent from 1.38 percent. “The risk is that the increase in cash rates will generate an interest rate shock on households” during the third quarter, Fitch said. “If so, arrears might increase further, and in the low-doc conforming sector they might reach a new historical high.” Arrears of more than 30 days on low-documentation conforming loans fell to 3.49 percent last quarter from 3.62 percent in the first three months, according to Fitch. Source: Bloomberg top 14/Sep/2010 - First home buyers urged to buy now Now is a good time for first home buyers to jump on the property ladder, according to Mortgage Choice spokesperson Kristy Sheppard who said house prices were beginning to stabilise. “At present, we’re looking at higher than average property listings with lower than average competition between buyers. But it’s a cycle. As positive sentiment grows so too will demand, which may mean now is a good time to act. What prospective first homebuyers really need to do is explore their choices carefully – both property and mortgage wise – before leaping in too quickly.” BIS Shrapnel managing director Robert Mellor agreed “At the moment, the current housing conditions favour those that are already on the property ladder. Affordability will continue to worsen, so it is just going to get harder and harder for those that haven’t made the leap to do so,” he said. Source: The Advisor top 13/Sep/2010 - Auction results holding up Auction results improved this week in Sydney where 341 residential properties were listed for auction, with 70 per cent selling on the day. Last week in Sydney 56 per cent of 333 properties sold at auction. On the same weekend last year, 66 per cent of 334 properties sold at auction in Sydney. Melbourne results were also good this week with 666 auctions producing a clearance rate of 61 per cent, compared to last week when 65 per cent of 652 auctions produced a sale. On the same weekend last year, 78 per cent of 750 properties listed for auction sold on the day in Melbourne. In Adelaide, 77 per cent of 29 properties listed for auction on Saturday sold on the day. In Brisbane, just 19 per cent of 41 properties listed for auction on Saturday sold under the hammer. Source: Australian Property Monitors   02/Sep/2010 - Housing bubble won’t burst Better than expected retail spending and building approval figures from the Australian Bureau of Statistics cast doubt on the likelihood of a major housing correction, according to national accounting firm Chan & Naylor. “While a housing correction cannot be ruled out, the latest consumer spending and building approvals provide a barometer of overall economic confidence,” said Sal Carrero, Chief Executive, Chan & Naylor. “It is hard to imagine a major housing price correction in an environment where interest rates and employment remain historically low. Mr Carrero said some capital city markets, such as Sydney, continue to experience strong rental growth which will assist in supporting home prices. “Increasing yields on investment property will support investor confidence in the market and indicates there is still value to be had for buyers. The property market continues to offer good prospects over the medium to long-term,” Mr Carrero said. Source: Chan & Naylor top 01/Sep/2010 - Home values stabilise in July After a large 1.0% seasonally-adjusted fall in June, Australian home values changed little in the month of July, recording an increase of +0.1% (up +0.4% seasonally-adjusted). According to the RP Data–Rismark Hedonic Home Value Index, Australia’s capital city home values remained relatively flat in the month of July recording a modest, seasonally-adjusted increase of 0.4% (on a raw basis home values were up only +0.1% in the month). The July results follow a 1.0% seasonally-adjusted decline in the month of June; the first negative movement in Australian capital city home values in 17 months. The slow-down in Australia’s housing market had been long anticipated by RP Data and Rismark and was noted by the Reserve Bank of Australia in its most recent Board Minutes. According to RP Data’s research director, Tim Lawless, the July index results are further evidence that Australia’s housing market has experienced a controlled soft landing after a resounding recovery during 2009. Source: RP Data top 31/Aug/2010 - Downsizers put pressure on prices Retirees as well as people experiencing lifestyle changes like separation, are downsizing their homes and competing with families and first home buyers for properties in the middle price range. Experts say downsizers are pushing property prices up and many will not be let with very much cash after selling up and then buying again. “One problem with downsizing is that, while prices may have risen such that it is tempting to sell and unlock money, the prices for the kinds of properties you might want to downsize to have also risen,” said property advisor Ana Bennet. Source: Herald Sun top 30/Aug/2010 - Auctions bounce back from election Auction results rebounded this week after the subdued results of the election weekend. In Sydney, there were 445 auctions held with 69 per cent producing a sale. That compares well with results from the same weekend last year when 73 per cent of 316 properties sold at auction in Sydney. In Melbourne there were 762 properties put up for auction with 61 per cent selling on the day. On the same weekend last year, 81 per cent of 691 properties sold at auction in Melbourne. In Adelaide, 62 per cent of 34 properties sold at auction this weekend, while just 12 per cent of 50 properties sold at auction in Brisbane. Source: Australian Property Monitors to 25/Aug/2010 - Rates to approach 10 per cent within 3 years Official interest rates as set by the Reserve Bank of Australia will rise by about two per cent to 6.5 per cent and retail standard variable home loan rates will follow and go up beyond 9 per cent within three to four years, according to BIS Shrapnel’s Long Term Forecasts report for 2010-2025. “Labour shortages and a synchronisation of construction cycles will lead to a build-up in inflationary pressures over 2011/12 and 2012/13,” BIS Shrapnel senior economist Richard Robinson said. “The RBA will be forced to respond by raising interest rates to a maximum of 6.5 per cent, which will take mortgage rates back over nine per cent and send housing activity into a controlled downturn over 2013/14.” Source: The Advisor top 25/Aug/2010 - Home buyers shun the high cost of moving Investors and owner occupiers tend to hold houses longer than they hold units. Rpdata’s senior research analyst Cameron Kusher said Melbourne and Sydney have the longest average hold periods for houses and units (9.6 years and 8.0 years and 9.1 years and 7.4 years respectively) whilst Darwin and Adelaide have the shortest average hold periods (4.7 years and 4.0 years and 6.6 years and 6.2 years respectively). According to Mr Kusher, on average the cost of housing in Sydney and Melbourne may be contributing to longer hold periods, especially when higher property prices in these two cities, coupled with the overall cost of moving is taken into consideration. “The strong and consistent value growth in recent years within Darwin, and the relatively more affordable property prices in Adelaide are likely contributors to a greater propensity for owners to sell properties within these cities. Added to this is the cost of stamp duty taxes which can be extremely expensive - especially for homes purchased in prestigious areas. Knowing this, owners of more expensive properties may look to renovate their property rather than relocate,” Mr Kusher said. Source: Rpdata top 24/Aug/2010 - Looking forward to big auction weekend Auction activity was subdued around the capital cities on election day last Saturday but clearance rates nevertheless remained good at around 63 per cent for both Sydney and Melbourne. Next weekend is expected to be a big auction weekend, particularly in Melbourne, Real Estate Institute of Victoria chief Enzo Raimondo said. “There was a low number of auctions this weekend due to the federal election,” he said. “This however has not had any negative impact on demand,” he said, adding that the Institute expects around 740 auctions across Victoria next weekend. Source: The Advisor top 23/Aug/2010 - Fewer homes are being repossessed in 2010 Court orders for the repossession of mortgaged houses and flats are down from numbers experienced in 2008. In Victoria they dropped to two-thirds of the numbers seen during the global financial crisis, with 1906 Supreme Court repossession applications in the last financial year, compared with 3080 the previous year. In NSW there were 571 Supreme Court applications begun in the June quarter. In 2009 in Victoria 321 people were evicted, while 500 lost their homes the year before. Source: The Age   19/Aug/2010 - Homes overpriced by up to 50 per cent Morgan Stanley's equity strategist, Gerard Minack said house prices are a bubble that has raised the level of risk in the economy. Mr Minack argued measures of value - such as house prices compared with rental returns or household disposable income - suggested they were overvalued by 35 to 50 per cent. The property boom has been especially pronounced in Melbourne, where the median house price has nearly doubled this decade. Sydney prices have risen more modestly, including a slump after 2004 before a surge last year. RP Data figures showed a slight fall in June after 17 months in a row of increases. Source: Sydney Morning Herald top 17/Aug/2010 - Rents up again in NSW Rents are on the rise again in Sydney and metropolitan New South Wales. Average rents rose to $410 per week in the June quarter - $10 higher than three months ago and $20 higher than the same time last year, according to official figures from the New South Wales government. Sydney’s vacancy rate is 1.2 per cent, Wollongong’s 1.1 per cent and Newcastle’s 1.6 per cent. The biggest annual rent increases for three bedroom houses over the year occurred in the Local Government Areas of Willoughby (17.6 per cent to $800), Ryde (14.6 per cent to $550) and Marrickville (12.7 per cent to $620). Source: The Advisor top 16/Aug/2010 - Sydney auctions improving Auctions results improved in Sydney this weekend with 384 residential properties listed for auction, up from 344 last week. Clearance rates also improved with 61 per cent selling on Saturday, also up from 56 per cent last week. On this weekend last year, 74 per cent of 227 properties listed for auction were reported sold on the day. Bad weather may have contributed to a slight fall in the clearance rate for auctions held in Melbourne on Saturday. 61 per cent of 555 Melbourne properties that were listed for auction were sold on Saturday, down from last week when 67 per cent of 499 properties sold on the day. On this weekend last year, 70 per cent of 485 properties listed for auction sold under the hammer. In Adelaide there were just 28 auctions with a clearance rate of 54 per cent. In Brisbane, just 22 per cent of 47 properties listed for auction sold o Saturday. Source: Australian Property Monitors   10/Aug/2010 - Mortgage sales grind to a halt Sales of new home loans feel to their lowest point in nine years in June, according to the Australian Bureau of Statistics. Australian housing finance commitments for owner-occupied housing fell 3.9 per cent in June, almost twice the market forecast of 2.0 per cent. Total housing finance by value fell by 1.9 per cent. Finance for construction projects fell by five per cent in June. AMP Capital Investors chief economist Shane Oliver said "It's basically telling us the housing recovery that we've seen over the last 18 months has come to an end, we can't rely on housing construction to continue pushing the economy ahead. Weakness in housing finance would also flow through to weakness in house prices, Dr Oliver said. "It's another reason for the Reserve Bank to leave rates on hold.'' Source: Herald Sun 09/Aug/2010 - Auctions now a 50/50 bet in Sydney Auction results improved slightly this week in Sydney with 6 per cent of 349 properties listed for auction on Saturday selling on the day. Last week 55 per cent of 357 properties sold at auction in Sydney. On the same weekend last year, 68 per cent of 244 properties sold at auction in Sydney. In Melbourne, 68 per cent of 500 properties put up for auction sold under the hammer on Saturday. Last week 67 per cent of 545 auctions held in Melbourne produced a sale. On the same weekend last year, 81 per cent of 438 properties produced a sale. In Adelaide, 53 per cent of 38 properties sold at auction. In Brisbane, 25 per cent of 31 properties listed for auction sold on Saturday. Source: Australian Property monitors 29/Jul/2010 - Mortgage applications on the rise Mortgage applications rose 2.3 per cent in the June quarter, but credit card applications dropped nine per cent, credit agency Veda Advantage said. Veda's latest quarterly consumer credit demand index tracked credit inquiries over the June 2010 quarter. It showed mortgage applications firmed 2.3 per cent compared to the March quarter. But mortgage applications fell 20.3 per cent compared with the June 2009 quarter, as the first home owner grants were wound back, Veda said in a statement. Veda spokesman Chris Gration said the credit quality of mortgage applicants who applied when the Government offered the first home owner's grant had improved marginally. "So there's no sign in Australia of that (US) sub-prime bubble happening,'' he said. Applications for credit cards have been falling steadily for two years, and dropped another nine per cent in the June quarter, compared to the March quarter, Veda added. There was also a 4.8 per cent decline in personal loan applications over the same period. Veda measures the adverse rate of credit, that is the rate of applications with defaults or bankruptcies."During the last couple of years, the adverse rates fell,'' Mr Gration said. "Credit quality got better and it's just started to flatten out. Over the last two years households have adjusted to the tougher economic conditions by being more cautious and people with poor credit quality have stayed out of the market.'' Source: News.com.au 28/Jul/2010 - Card reward schemes not always the best option Collecting reward points for flights and shopping freebies is a waste of time and money for the average credit card customer, researchers say. Some schemes leave consumers out of pocket because the annual fee costs more than what you get back in return. On the flip side, big spenders who carefully choose whether they want flights, cash or shopping vouchers and pay off bills before being slugged the stellar interest rates on rewards cards are reaping benefits. More than 10 million credit and charge cards of Australians are linked to rewards. The loyalty cards account for more than half the market, and typically attract the highest interest rates and an annual fee. The latest report follows a separate survey by consumer group Choice that warned cardholders spending $1000 a month were taking on average more than five years to earn enough points for a $500 digital camera, and needed to splurge $6600 on an average card to earn enough points for a $50 toaster. Credit card analyst Mike Ebstein, of MWE Consulting, said consumers putting less than $30,000 a year on their plastic and failing to pay off accounts in full each month should opt for a no-frills card with a low interest rate. Providers had been steadily increasing annual fees or lifting the number of points needed to get rewards since Reserve Bank regulation of transaction fees cut their income, he said. Source: Herald Sun 26/Jul/2010 - Sydney auctions bounce back, slightly Sydney’s auction clearance rate jumped up this weekend to 69 per cent from 55 per cent last week. There were 349 residential property auctions held in Sydney on Saturday, which was also up on last week when there were 318 auctions. On the same weekend last year, there were 263 auctions held in Sydney with a clearance rate of 68 per cent. In Melbourne there were 588 auctions held this weekend with a clearance rate of 56 per cent, down from last week when 66 per cent of 558 auctions produced a sale on the day. On the same weekend last year, 80 per cent of 429 auctions held in Melbourne produced a sale. In Adelaide, 68 per cent of 33 properties produced a sale. In Brisbane, 25 per cent of 44 properties listed for auction sold on Saturday. Source: Australian Property Monitors 14/Jul/2010 - Canberra has second most expensive houses Canberra’s residential property market has overtaken Melbourne and moved into second place in the list of most expensive capital city markets. Canberra's median residential house price rose 3.7 per cent to $508,500 in the three months to the end of May according to RP Data-Rismark. Prices in Melbourne increased 3.3 per cent to $480,000, while the Sydney market remained the most expensive with a median price of $517,250, a 2.4 per cent increase in three months. Century 21 Canberra principal Brian Nancarrow likened the Canberra housing market to that of Melbourne a year ago: "It's certainly a boom. It's not a bubble and it will flatten out." Source: The Australian top 14/Jul/2010 - Debit card spending growth slows The steady shift to payments made with debit cards and away from payments made with credit cards appears to be moderating. Debit card payments gained 1.10 per cent in market share of the value of purchases in Australia over the 12 months to May 2010. Data published by the Reserve Bank of Australia shows the shift in the mix of the value of purchases over the preceding 12 months was 2.50 per cent The slow-down in growth of debit over credit is surprising, given the promotion by several big banks of scheme debit cards, replacing Eftpos cards. Source: Banking Day 14/Jul/2010 - Term deposits offering high yields Term deposits are not just a safe haven for your cash, but with the very high interest rates now on offer for locking your cash away for a set period of time, they are an investment with high yields. Over the last 18 months, official interest rates set by the RBA have climbed 1.5 per cent while one year term deposit rates have climbed 3 per cent. Investors using advisor ‘platforms’ to spread and manage their investments are choosing to put about 25 per cent of their funds into term deposits according to a spokesperson for Aviva. Source: The Australian 13/Jul/2010 - Credit card spending back in style Credit and charge card spending went up in May by $1.7 billion to $19.6 billion according to data from the Reserve Bank of Australia. However card holders don’t seem to be letting their credit card balances get out of control. Purchases in May 2010 were 11 per cent higher than in May 2009. Cash advances were also eight per cent higher. Looking at credit card balances the month-on-month growth of 0.6 per cent, to $47.4 billion, was subdued in comparison, Michael Ebstein, principal of MWE, noted in his monthly report on the payments data. Source: Banking Day 13/Jul/2010 - Investors propping up property market The number of home loans sold in May went up, surprising many analysts who were expecting more signs of a cooling housing market. The number of new owner-occupier loans was up 1.9 per cent and the number of new investment mortgages was up 2.6 per cent. The value of new mortgages issued for investment purposes reached $7.66 billion, the highest monthly figure since before the global financial crisis in January 2008. However the total value of new loans is still near nine year lows, suggesting property markets will remain subdued this year. Source: The Age 13/Jul/2010 - Term deposits outperforming shares Cash deposits have delivered far better returns to investors over the last three years than the sharemarket has. The average annual rate of return over the last three years from a one year term deposit has been 5.6 per cent. The average annual return from the ASX200 companies over the last three years has been minus 6.6 per cent. Average dividend income has been between 3.4 per cent and 5.5 per cent which has been offset by some large capital losses. Source: Herald Sun 12/Jul/2010 - Saving a deposit for a unit takes four years It takes 4.0 years for a first time buyer couple to save a unit deposit. By capital city first time buyers need to save for the longest in Melbourne (4.3 years) and Sydney (4.2 years). It would take an extra two years to save a house vs a unit deposit in Sydney. A first time buyer couple planning to purchase the median priced unit in Australia would need to save 20% of their combined income for 4.0 years to raise a 20% deposit ($76,900). A year ago it would take first time buyers 3.2 years to save a deposit for a unit. Source: Bankwest 12/Jul/2010 - Saving a home deposit takes longer The second annual Bankwest First Time Buyer Deposit Report shows that the average first time buyer couple would need to save for 4.5 years to raise a conservative (20%) deposit to buy their first house as at March 2010, up from 3.7 years as at March 2009. Five years ago in March 2005, the time taken was 4.0 years. The time to save a deposit calculation is based on a first time buyer (FTB) couple saving 20% of their combined pre-tax income annually to raise a 20% deposit and includes federal and state government first home owners’ grant in the deposit. On this basis in March 2010 a first time buyer couple would need to raise a deposit of $85,800 to purchase the median house and would be saving $17,619 annually out of a combined income of $88,093. The increase in the time taken to save a deposit during the past year – from 3.7 to 4.5 years - reflects the recent reduction in the First Home Owners Grants from $14,000 to $7,000 and the 10% nation-wide increase in house prices since March 2009. Source: Bankwest 12/Jul/2010 - Auction results continue to slide The number of properties listed for auction and the auction clearance rate continues to slide. There were 351 residential properties put up for auction in Sydney on Saturday with 50 per cent selling on the day. Those results were down on last week, when 57 per cent of 418 properties put up for auction in Sydney sold on the day. On the same weekend last year, 71 per cent of 217 auctions held in Sydney resulted in sale. In Melbourne there were 556 properties put up for auction on Saturday, with 56 per cent selling on the day, slightly own on last week when 61 per cent of 567 auctions held in Melbourne resulted in a sale. On the same weekend last year, 78 per cent of 271 properties put up for auction sold on the day. In Adelaide, 47 per cent of 41 properties produced a sale. In Brisbane, 47 per cent of 42 properties put up for auction on Saturday sold on the day. Source: Australian Property Monitors 12/Jul/2010 - Credit card debt up, repayments down A pause in raising interest rates by the Reserve Bank of Australia in January and February this year seems to have prompted consumers to loosen their belts slightly and spend on their credit cards again. Credit card balances accruing interest rose to $34.012 billion when rates were left on hold in February, up $227 million from January, while repayments on those cards fell 4.7 per cent to $17.716 billion in February from $18.593 billion in January, according to the RBA. Source: Sydney Morning Herald 17/Jun/2010 - The gold mine of forgotten bank accounts There are millions of dollars sitting idle because bank accounts have been forgotten by their owners. ASIC released a list of unclaimed monies it holds waiting for its rightful owners to come looking for it. One person has left $481,199.00 in an ANZ bank account in Melbourne for many years, apparently forgotten. ASIC lists many other large amounts of cash that have been forgotten in old bank accounts. The balance has now been transferred to ASIC. People wishing to search for lost or unclaimed monies can visit ASIC’s consumer protection website fido.gov.au/unclaimed money. Source: Herald Sun 17/Jun/2010 - No housing bubble Residex chief executive officer John Edwards said despite widespread concern, Australia was not experiencing a house price ‘bubble’. “The interest rate increases, I think can now be said to have been largely absorbed and those who were going to be excessively stressed from the first group of increases have probably largely exited the market or will do so very shortly,” Mr Edwards said. “I suggest this as the number of Suburbs falling in value due to excess sale stock, where mortgage stress would be seen (those in the lower cost areas) are less than at the peak. The first wave peaked in February and since then it has been reducing. The impact of the next group of interest rate increases is starting to flow through. This will result in some moderate increases in Suburbs moving to negative growth.” Mr Edwards said Melbourne is likely to be the most impacted by rising rates. Source: The Advisor 15/Jun/2010 - Interest rates to keep house prices down House price growth will slow in 2011 because of rising interest rates says the latest BIS Shrapnel Residential Property Prospects, 2010 to 2013 report. ''With interest rates quickly lifting from these emergency levels, and the current variable rate of 7.4 per cent now being close to long-term trends, the recent levels of price growth cannot be maintained,'' BIS senior project manager Angie Zigomanis said Nonetheless, house prices will continue to grow, BIS claims. The exit of first home buyers has also added to a weakening of demand. More moderate interest rate movements than recent months will aid purchaser confidence, it says. BIS forecasts the cash rate to rise by 50 basis points in the 2010-11 financial year and by another 50 basis points in 2011-12. ''The more stable interest rate environment is expected to underpin purchaser confidence as economic conditions continue to strengthen, and should continue to push through moderate house prices rises,'' Mr Zigomanis said. Source: The Age 15/Jun/2010 - Queen’s Birthday no good for auctions Auction results were subdued for the Queens’ Birthday weekend. In Sydney there were 274 residential property auctions with 61.2 per cent resulting in a sale on the day. That was down from last week when there were 530 auctions for a clearance rate of 62 per cent. In Melbourne there were just 286 auctions held with a clearance rate of 60 per cent, down from 884 auctions and 65 per cent last week. In Adelaide, 42 per cent of 37 properties sold at auction on the weekend, down from 58 per cent of 53 auctions last week. In Brisbane just 12 per cent of 49 auctions resulted in a sale on Saturday, down from 36 per cent of 56 last week. Source: Australian Property Monitors 24/Jun/2010 - Units give options for first home buyers Across Australia’s capital cities the median unit price is currently recorded at $410,000 which is $82,000 more affordable than the median house price. Based on rpdata.com analysis, on average, purchasers in New South Wales spent on average $350,444 on a unit. In contrast, property buyers in Tasmania sent on average $216,556. In Perth 36.1 per cent of unit sales were at or below $324,444. Sydney has also performed very well with 35.0 per cent of all unit sales over the last 12 months priced below $350,444. Despite the fact that Canberra had the lowest proportion of affordable unit sales, The Jerrabomberra District along with the Kwinana Local Government Area (LGA) in Perth recorded every single unit sale over the last year within the affordable price ranges of $301,556 and $324,444 respectively. Source: rpdata 24/Jun/2010 - END OF TAX YEAR TACTICS FOR PROPERTY INVESTORS Prepaying interest on investment property before the end of the financial year is a good way to minimise tax. And with another fall in income tax rates next financial year it makes even more sense this year so you get more bang for your buck. The threshold for the 15 per cent tax rate will rise from $35,000 to $37,000 and the rate for those earning $80,000 to $180,000 drops from 38 per cent to 37 per cent. So any deductions this year will carry more weight, says Deb Wixted head of technical services at Colonial First State who suggests you prepay interest on your investment loan up to 12 months in advance. And Aussie Home Loans chairman John Symond says that if you have sold a property this year and made a capital gain then seek to offset this through selling any loss-making investments such as shares before year-end. 23/Jun/2010 - Can you cope with a 4 per cent rate rise? Mortgage borrowers should have their financial positions compulsorily ‘stress tested’ just as banks have their financial positions regularly stress tested by the banking system regulator APRA. The Institute of Actuaries told a senate committee last month that anyone who is undertaking a major financial commitment such as a mortgage should have to undergo a financial stress test before the commitment is made. A stress test would look at how the borrower might cope with rate rises of up to three or four per cent. Currently lenders usually investigate how a borrower might cope if rates were to go up about 2 per cent. Rates have risen 1.5 per cent since last October and some economists expect rates to go up another 1.5 per cent by the end of 2011. Source: Sydney Morning Herald 23/Jun/2010 - Rates to go up another 0.5 per cent The Reserve Bank of Australia is expected to raise the official cash rate by another half of one per cent by the end of 2010 according to Westpac chief economist Bill Evans. That would take the cash rate from 4.5 per cent currently to five per cent, and push retail mortgage rates up to around 8 per cent. Mr Evans said the housing market should experience a slowdown before the end of the year, which should prevent rates from exceeding 5 per cent. "Rate rises and lower first home buyer demand have already impacted heavily on housing finance approvals [down 28 per cent from their September high],” he said. “Historically, swings in finance approvals have usually been a good gauge of demand, impacting with a lag of about six months.” Source: The Advisor 23/Jun/2010 - Good News for Savers The Government’s 2010 Budget was announced earlier this year and there was some good news for savers. In future individuals will be eligible for a tax discount of 50 per cent on interest earned from savings products. The discount will apply on up to $1,000 of interest income from 1 July 2011. This is good news for most Australians as it means you will be paying less tax on any interest you earn. Which products are likely to included? The savings discount applies to deposits held with an authorized deposit-taking institutions. Interest on the following products are eligible: Online savings accounts; term deposits; cash management accounts; online and standard savings accounts; deeming accounts; transaction accounts. How much tax will this save me? The tax discount will apply on any interest earned up to $1,000. Assuming you have a savings product that earns 6% interest p.a. (which is achievable in today’s market) you would need to have a deposit of over $16,000 to earn more than $1,000 in interest in a year. Any interest earned over $1,000 will be taxed at your marginal rate, while the interest below $1,000 will be taxed at half your marginal rate. Example*:   Before 1 July 2011 After 1 July 2011 Initial Deposit Balance $16,000.00 $16,000.00 Returns in Year 1 $986.85 $986.85 Tax on Returns $296.05 $148.00 Ending Balance after Tax $16,690.80 $16,838.85 Difference - $148.05 *Example assumes a return of 6% p.a. compounded monthly and a marginal tax rate of 30%.                                       21/Jun/2010 - Auctions bounce back Auction clearance rates held up this weekend, despite big increases in volumes, suggesting plenty of demand in the residential property market. There were 549 auctions of residential properties in Sydney on the weekend, up from 267 last week, with 61 per cent producing a sale on the day (62 per cent last week). On the same weekend last year, 66 per cent of 264 properties sold at auction in Sydney. It was another huge auction weekend in Melbourne with 960 properties put up for auction and 63 per cent of those selling on the day, up from 62 per cent of 280 properties last week. On the same weekend last year in Melbourne, 80 per cent of 497 properties sold at auction. There were 43 auctions held in Adelaide on Saturday with 50 per cent producing a sale. In Brisbane there were 59 properties auctioned with 42 per cent selling in Saturday. Source: Australian Property Monitors 21/Jun/2010 - Stamp duty concession puts pressure on prices The NSW government's decision to remove stamp duty for off-the-plan property under $600,000 could push up prices. To obtain the full $22,490 saving offered in the budget, buyers must sign up before building commences. If construction has already begun, they are eligible for a $5623 discount. And to be eligible, the building must be completed within two years of a buyer exchanging on the deal. The chief economist with St George Bank, Justin Smirk, said ''it's certainly going to create more demand'' he said. ''But the problem is it takes a long time for the credit approvals to get through the [banking] system''. David Milton, the managing director of agents CB Richard Ellis said the plan was ill-conceived because most large developments would not comply and the two-year time frame would be too tight. ''A lot of our projects have 20-month to two-year building periods,'' Mr Milton said. ''And if there are wet-weather delays or if there are issues with your builder, it's not going to work out''. Source: Sydney Morning Herald 17/Jun/2010 - The gold mine of forgotten bank accounts There are millions of dollars sitting idle because bank accounts have been forgotten by their owners. ASIC released a list of unclaimed monies it holds waiting for its rightful owners to come looking for it. One person has left $481,199.00 in an ANZ bank account in Melbourne for many years, apparently forgotten. ASIC lists many other large amounts of cash that have been forgotten in old bank accounts. The balance has now been transferred to ASIC. People wishing to search for lost or unclaimed monies can visit ASIC’s consumer protection website fido.gov.au/unclaimed money. Source: Herald Sun 17/Jun/2010 - No housing bubble Residex chief executive officer John Edwards said despite widespread concern, Australia was not experiencing a house price ‘bubble’. “The interest rate increases, I think can now be said to have been largely absorbed and those who were going to be excessively stressed from the first group of increases have probably largely exited the market or will do so very shortly,” Mr Edwards said. “I suggest this as the number of Suburbs falling in value due to excess sale stock, where mortgage stress would be seen (those in the lower cost areas) are less than at the peak. The first wave peaked in February and since then it has been reducing. The impact of the next group of interest rate increases is starting to flow through. This will result in some moderate increases in Suburbs moving to negative growth.” Mr Edwards said Melbourne is likely to be the most impacted by rising rates. Source: The Advisor 15/Jun/2010 - Interest rates to keep house prices down House price growth will slow in 2011 because of rising interest rates says the latest BIS Shrapnel Residential Property Prospects, 2010 to 2013 report. ''With interest rates quickly lifting from these emergency levels, and the current variable rate of 7.4 per cent now being close to long-term trends, the recent levels of price growth cannot be maintained,'' BIS senior project manager Angie Zigomanis said Nonetheless, house prices will continue to grow, BIS claims. The exit of first home buyers has also added to a weakening of demand. More moderate interest rate movements than recent months will aid purchaser confidence, it says. BIS forecasts the cash rate to rise by 50 basis points in the 2010-11 financial year and by another 50 basis points in 2011-12. ''The more stable interest rate environment is expected to underpin purchaser confidence as economic conditions continue to strengthen, and should continue to push through moderate house prices rises,'' Mr Zigomanis said. Source: The Age 15/Jun/2010 - Queen’s Birthday no good for auctions Auction results were subdued for the Queens’ Birthday weekend. In Sydney there were 274 residential property auctions with 61.2 per cent resulting in a sale on the day. That was down from last week when there were 530 auctions for a clearance rate of 62 per cent. In Melbourne there were just 286 auctions held with a clearance rate of 60 per cent, down from 884 auctions and 65 per cent last week. In Adelaide, 42 per cent of 37 properties sold at auction on the weekend, down from 58 per cent of 53 auctions last week. In Brisbane just 12 per cent of 49 auctions resulted in a sale on Saturday, down from 36 per cent of 56 last week. Source: Australian Property Monitors 13/May/2010 - Housing market cooling rapidly Australian housing finance commitments for owner-occupied housing fell 3.4 per cent in March, seasonally adjusted, to 48,260, said the Australian Bureau of Statistics yesterday. The total volume of owner-occupied housing was at its lowest level since April, 2001. Commonwealth Bank senior economist Michael Workman said first home buyers had left the market. "The two big trends are (fewer) first home buyers and more established, second home buyers in the market,'' Mr Workman said. "The weakness in the data over the past six months has been the withdrawal of the first homebuyers scheme. The anecdotal evidence from real estate agents is that the activity in the market is from people who are trading up.'' Workman said rising interest rates had not affected the market. Herald Sun 13/May/2010 - First Home Saver Account confusion In the original scheme first home savers scheme, buyers had to contribute to their FHSA over four financial years to qualify for concessional tax treatment and government contributions, and could not put the money to a home purchase until after that time had passed. If they bought a house before the four years was up the money in the FHSA would go into their superannuation account. Now the government will allow people to buy a home and then put the money saved in the FHSA into the mortgage after the qualifying period has ended. Whether borrowers would then be allowed to redraw the money is unclear. What is also unclear is whether the money in the account could be used as part of the loan deposit, if the house is purchased before the four years period ends. A banking tax partner at Deloitte, Emanuel Hiou, said the change was unlikely to make FHSAs, which are offered by only a small number of institutions and have not attracted much money, any more popular. From a first home buyer’s point of view the biggest stumbling block, the four-year qualifying period, was still in place. Hiou said: “I would be surprised if there was any increase in take-up.” Banking Day 12/May/2010 - House prices, interest rates head north Sydney house prices jumped up a record 21 per cent over the year to the end of March, according to figures released by the Australian Bureau of Statistics. Melbourne prices went up 28 per cent. Nationally, capital city prices climbed 20 per cent over the year to March. The government is expecting the housing boom to continue, with private dwelling investment tipped to jump by 7.5 per cent next financial year. The Commonwealth Budget papers, released yesterday show the government expects inflation to hit 3.25 per cent this June quarter. The budget papers have warned that further interest rate rises could be in store. ''Strong population growth and low vacancy rates should continue to support activity in the dwelling sector, although this is likely to be tempered by higher mortgage interest rates,'' Treasury says in the budget. Sydney Morning Herald 12/May/2010 - First Home Saver Accounts get better The under-used First Home Saver Accounts scheme, which gives savers a government co-contribution of up to $850 per year, will be overhauled a second time to make it more flexible, the government announced yesterday. Current rules mean aspiring first home buyers are forced to keep their savings in designated accounts for four financial years before being able to access the money to buy a house. If the account holder buys a house before the end of that four-year period, the balance of their account is transferred to their superannuation fund. Now, the government will allow cash in FHSAs to be paid into mortgages after the end of the minimum qualifying period if a house is bought in the interim. The Treasurer, Wayne Swan said the idea was to give aspiring first home buyers more flexibility but still allow them to benefit from the concessional tax rates and government contributions. The Age 12/May/2010 - Tax on deposits slashed from 2011 Interest paid on low value bank deposits and comparable savings will be subject to a reduced rate of tax from July 2011, the Australian government said last night. The measure was announced in the budget. Income from bank deposits will be taxed at 50 per cent of the marginal rate of tax that the taxpayer would otherwise pay. The reduced interest will apply on the first $1000 in interest income earned in any year. Based on current interest rates this means that the maximum tax cut applies to deposits of around $15,000. Higher income earners paying tax at the highest marginal rate will reap a bigger benefit than those on lower tax rates. The tax benefit also applies to interest earned on bonds, debentures or annuity products. The tax benefit applies to individuals and includes savings held through a trust or managed investment scheme. The government said it expected to reduce tax on interest earned by 5.7 million depositors, and estimated the loss in tax revenue at around $500 million. Banking Day 11/May/2010 - Auction clearance rates stay high There were 506 residential property auctions held in Sydney on the weekend, with 66 per cent producing a sale on the day. Those results are slightly down on last week when 69 per cent of 524 auctions produced a sale in Sydney. On the corresponding weekend last year, 68 per cent of 286 auctions produced a sale. Melbourne results were also just slightly down on last week’s bumper results. There were 836 auctions held in Melbourne on Saturday with 67 per cent producing a sale. Last week 75 per cent of 861 properties put up for auction were sold on the day in Melbourne. On the same weekend last year, there were 432 auctions with a clearance rate of 71 per cent in Melbourne. 54 per cent of 54 properties sold at auction in Adelaide on the weekend, just slightly down on the week before. In Brisbane, 25 per cent of 64 properties put up for auction sold on the day. Australian Property Monitors. 07/Jan/2010 - 2016 Eftpos problems fixed   The 2016 bug affecting may Eftpos terminals has impacted on millions of customers around the world. 25 million cardholders have been affected in Germany alone. The bug causes Eftpos machines to wrongly read the year 2010 as 2016. In Australia, merchant terminals supplied by Bank of Queensland, Bankwest and Credit Union service provider CUSCAL have been hit. Some consumer Eftpos receipts are still recording the date of transaction as 2016, instead of 2010, says Eftpos technology company Keycorp, but the system and later bank statements record the date correctly says Joe Bonin, CEO of Keycorp. Source: The Age 07/Jan/2010 - 50/50 chance of rates going up again   The Reserve Bank should pause its rate rising agenda says a leading business lobby group because new data indicates continuing weakness in the economy. The Australian Industry Group-Commonwealth Bank of Australia performance of services index dropped 2.5 points to 50 points in December. Services make up the largest stake of the Australian economy. "The December Australian PSI confirms that the recent improvement in the services sector lacks traction and adds weight to arguments for a pause to interest rate rises,” said AIG group chief executive, Heather Ridout. Markets are currently pricing in a 50 per cent chance that the reserve bank will increase official interest rates again in February. The official cash rate is currently set at 3.75 per cent, after three 0.25 per cent increases in the last four months. Source: Sydney Morning Herald 7/Jan/2010 - Rates to rise more than 1% in 2010   The Reserve Bank will lift official interest rates by more than one full percentage point to about five per cent before the end of 2010, say economists. A one percentage point rise on a current standard variable rate mortgage of $300,000 would lift monthly repayments by $203. The RBA is expected to impose a fourth rate rise of 0.25 per cent in February or March, then pause to assess the impact of its rate rising campaign before lifting rates again. JP Morgan economist Helen Kevans said "The RBA will continue tightening, yet it would not be surprising thereafter if the RBA takes a breather and sees how the economy reacts to those interest rate hikes. It will be looking to confidence, home loans, and of course, the data from offshore." National Australia Bank senior economist David de Garis said big new mining projects would place upward pressure on inflation, prompting the RBA to raise rates again. Source: Courier Mail 06/Jan/2010 - New home sales fall away   New home sales were weak in November according to the latest figures released yesterday by the Housing Industry Association. A 0.8 per cent rise in the numbers of detached dwellings sold in November was offset by a 4.9 per cent decline in the numbers of multi unit apartments. HIA chief economist Harley Dale said investors and upgrading owner occupiers had not fully replaced the volume from first home buyers that fell away late in the year as federal government grants tapered down. "There are a considerable number of obstacles blocking the prospect of a strong up-cycle in new home building including costly planning delays, the re-emergence of land and skilled labour shortages and rising interest rates.” Detached New Home Sales in November increased by 12.1 per cent in Western Australia and fell by 1.8 per cent in Queensland and by 3.5 per cent in Victoria. Source: Herald Sun top 06/Jan/2010 - New year resolutions add to wealth   Turning your financial goals into new year’s resolutions increases the chances of success by up to ten times according to new research from the United States. The US researchers found that almost half of the people who turned their plans and goals into a new year’s resolution had reached their goal or were still on track with it six months later. Less than five per cent of people who had goals for the year but did not make them into a specific resolution were still on track with their plan. However experts warn that the resolutions must be very specific to bring any worthwhile benefit. It won’t work to simply resolve to “cut back on debt” for example. Popular new years resolutions include saving money – experts suggest setting up an automatic savings plan with direct debits – and paying off debts – experst recommend paying the high interest credit cards off first. Source: Courier Mail 6/Jan/2010 - Queensland property looks a good investment   There was significant growth in the total value of investment purpose home loans between April and October. The Real Estate Institute of Queensland expects this trend to continue. Queensland's population is growing by about 1,500 people per week, says REIQ managing director Dan Molloy, creating an ongoing housing shortage which means investors are likely to drive the market forward in the first part of 2010. "We are simply not building enough homes for everyone that wants to live here," says Molloy. Source: Courier Mail 06/Jan/2010 - Take stock of xmas debts   The new year is a traditional time for taking stock of personal finances. Many thousands of people are forced into bankruptcy in the early months of each year, because of debts racked up over the Christmas period. ASIC recommends that people consider taking stock of their financial position using an online calculator available at ASIC’s consumer affairs website, FIDO. The calculator, labelled “Statement of Financial Position’ allows the user to enter their assets and liabilities. The calculator then gives the user a reading on their overall financial strength (or weakness). Source: Courier Mail 06/Jan/2010 - Take stock of xmas debts   The new year is a traditional time for taking stock of personal finances. Many thousands of people are forced into bankruptcy in the early months of each year, because of debts racked up over the Christmas period. ASIC recommends that people consider taking stock of their financial position using an online calculator available at ASIC’s consumer affairs website, FIDO. The calculator, labelled “Statement of Financial Position’ allows the user to enter their assets and liabilities. The calculator then gives the user a reading on their overall financial strength (or weakness). Source: Courier Mail 06/Jan/2010 - Time right for first time property investors   The timing is particularly good for first time property investors to have a go at being a landlord. “Banks are not so keen any more on lending to people who already have a few investment properties because they have tightened lending rules and are generally concerned that people don’t take on too much debt,” said mortgage broker Anthony Smith from Melbourne’s south east. “But people with equity in their own homes who have never had an investment property before are being approved,” says Smith. And they face reduced competition for good properties from other investors at the moment as well. Banks are now less willing to lend to the self employed and contractors, forcing those people out of the property investment market as well says Smith. “A lot of investors have dropped out because they simply can’t access funds.” Source: Courier Mail 6/Jan/2010 - WA leading in new home sales   Western Australia stood out from the rest of Australia in November as new home sales rose by more than 12 per cent. Many other states recorded falling new home sales as first home buyers exit the market following the phasing down of federal government grants. New detached home sales increased by 12.1 per cent in November in WA, by 2.7 per cent in NSW and 2.6 per cent in South Australia. Sales fell in Queensland and Victoria. Overall, sales of new detached homes was 0.8 per cent. "The outlook for home construction is clearly more positive than the latest sales figures imply,” said Commsec economist Craig James. "Housing finance and council approval figures both point to a lift in residential building in 2010." Source: The Australian 9/Nov/2009 - Rents up everywhere   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 17/Nov/2009 - Fix your bad credit file now   A bad credit file can cost a lot in the long term. If you haven’t paid bills, or if you've had your power cut off, your car repossessed or skipped payments, exceeded card limits or defaulted, you could be refused a loan or be charged a higher interest rate. Consumers can get access to their credit file through Veda Advantage at www.mycreditfile.com.au so they can check their file and ensure its’ accuracy. To change a bad credit record into a good one, use credit as much as you can, meeting all repayments on time, so the good record outweighs the bad. Put all your spending on a credit card and pay it off every month. Source: The Daily Telegraph 16/Nov/2009 - Melbourne auction clearances still above 70%   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 04/Nov/2009 - PayPal to crush cards online   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 04/Nov/2009 - The RBA signals more pain ahead   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 04/Nov/2009 - Mortgage rates go up again   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 Nov/2009 - No more signatures says Visa   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 02/Nov/2009 - Sydney auction results improving   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  20/Aug/2009 - Beware new wave of online crime   An unprecedented wave of crime is sweeping the internet say authorities. The Australian Computer Emergency Response Team (AusCERT) says thousands of Australian computers are being infected with malware every day with millions of credit card numbers being stolen and traded online. AusCERT says there is so much crime online now that it threatens Australia’s economy. Spy agency ASIO is also concerned about security threats from the new wave of cyber attacks and says criminal groups and terrorists are using freelance hackers. Source: Herald Sun 19/Aug/2009 - NSW workers expecting 5% pay rise   Total pay growth over the 12 months to August 2009 rebounded to 4.1 per cent according to the Melbourne Institute wages report, released yesterday. Respondents expect a moderate 3.2 per cent rise in pay over the next 12 months. According to Dr Edda Claus, a Research Fellow at the Melbourne Institute, “As observed in the 12 months to May 2009, Total pay and Hourly wage rates have again risen at similar rates. This is consistent with a continued dull labour market.” Dr. Claus added: “The ACT had the highest growth in Total pay and Victoria had the lowest growth. Going forward, respondents in NSW are the most optimistic about future wage growth, expecting 5.1 per cent growth over the next 12months.” Source: Melbourne Institute 19/Aug/2009 - ASIC says ban financial commissions   The financial and corporate regulator, the Australian Securities and Investment Commission has recommended to government that commissions paid by financial institutions to financial advisors be outlawed. Four years ago ASIC found that many AMP financial planners did not act in the best interests of their clients when they signed them up to AMP financial investment products. The Financial Planning Association says that the financial “advice” industry is unlikely to survive in its current shape if ASIC's proposals are adopted. Source: Sydney Morning Herald 19/Aug/2009 - MyState members vote for shares   My State Financial will demutualise with support from 84 per cent of members voting at a special meeting of the credit union in Hobart yesterday. MyState will merge with Tasmanian Perpetual Trustees, an ASX listed company, assuming shareholders in the latter agree at a special meeting today in Launceston. PKF Corporate Advisory estimated the value of the merged entity at between $200 million and $211 million, which gives a theoretical value per MyState Limited share of between $2.97 and $3.14, or approximately $1129 to $1193 for a parcel of 380 MyState Limited shares. Credit union demutualiations are rare in Australia. An effort by Connect Financial, a predecessor of MyState, failed narrowly in 2003. Source: The Sheet 19/Aug/2009 - Six rate rises expected, starting early 2010   Financial markets are expecting that the Reserve Bank may raise rates more than six times, starting early next year. In the August board minutes published yesterday, the RBA said it was unlikely there would be further cuts to interest rates as the outlook for the economy had started to brighten. The RBA minutes stated that “the bank would in due course need to adopt a less expansionary policy stance." Markets predict that there is a six per cent chance of a rate rise in September. The expectations of a rate rise by the end of the year are firming. JPMorgan chief economist Stephen Walters said the RBA board would wait until early next year to raise rates. "Only if the domestic data fails to soften, or the global uncertainties are resolved unequivocally some time soon, will the RBA deliver a rate hike before the end of 2009," Mr Walters said. "Once the hikes begin, though, we expect a steady drumbeat of 25 basis point hikes as the bank removes the generous policy accommodation in an orderly and resolute fashion." Source: The Australian 18/Aug/2009 - Frozen mortgage fund withdrawals get bigger   ASIC has announced changes to hardship withdrawals from frozen mortgage funds. These changes expand the circumstances in which operators are able to make payments to fund members who demonstrate the need to access funds on hardship grounds. The cap on hardship withdrawals for each member has been raised to $100,000 each calendar year, from $20,000 plus 50 per cent of the member’s interest. An investor can make up to four hardship withdrawals a calendar year, instead of a once-only withdrawal (subject to the overall cap of $100,000); and hardship grounds have been extended to cover a beneficiary of a deceased estate of a member where the beneficiary is suffering hardship; and to make it clear a person unemployed for at least three months without other means may apply for hardship relief. ASIC first announced hardship relief measures in October 2008. 1452 withdrawal payments have been made with an average withdrawal of $25,024. The existing hardship relief criteria (which continues in operation): 1) the member is unable to meet reasonable and immediate family living expenses. 2) On compassionate grounds (e.g. medical costs for serious illness, funeral expenses or to prevent foreclosure); and 3) Permanent incapacity. Sournce: ASIC 17/Aug/2009 - Credit card debts hurt homeowners   Seventy one per cent of home owners struggling to repay a mortgage are also carry over unpaid credit card debts according to big mortgage insurer Genworth. On average 52 per cent of card holders carry over debt with the rest paying off their card debts on time. That is despite average mortgage interest rates falling 3.7 per cent since the RBA starting its aggressive rate cutting campaign last year, according to Infochoice. Credit card rates have fallen only 1.2 per cent in that same period of time. There are six credit cards offering zero interest on balance transfers according to Infochoice. They are issued by ANZ, Citibank, Coles, Macquarie Bank and NAB. Source: Sydney Morning Herald 17/Aug/2009 - Melbourne auctions outshine other cities   The number of auctions held in Sydney on the weekend was down again to 226, with 74 per cent resulting in a sale on the day. Last week 67 per cent of 247 properties put up for auction in Sydney sold on the day. Melbourne auction results continued to shine with 75 per cent of 485 properties put up for auction selling on the day. Last week in Melbourne, 80 per cent of 438 properties sold at auction. The Adelaide market shows signs of improvement with 65 per cent of 31 properties put up for auction selling on Saturday, up from 40 per cent of 25 properties last week. 49 residential properties were put up for auction in Brisbane on the weekend with 48 per cent selling, compared to 36 per cent of 67 properties the week before. Source: Australian Property Monitors 17/Aug/2009 - Be prepared for higher rates says RBA   Homebuyers have to be prepared for higher interest rates says the governor of the Reserve bank, Glenn Stevens. Stevens told a parliamentary hearing that rate are currently well below normal and would move “a good deal north” as Australia emerges from what “may turn out to be one of the shallower recessions Australia has experienced.” Many economists expect official rates to climb by two per cent from three per cent now to five per cent by the middle of next year. That would push standard variable mortgage rates from 5.37 per cent currently to about 7.37 per cent. On a $300,000 mortgage that would push repayments up from $1819 per month to $2191 per month. Source: Herald Sun top