RBA Keeps Interest rates On Hold

reserve bankThe Reserve Bank of Australia (RBA) has spared borrowers an interest rate rise, leaving the cash rate at 4.75 percent in a widely expected move.

The Reserve Bank last increased the overnight cash rate in November 2010 to 4.75 percent from 4.5 percent and most economists still expect a rate rise this year.

“We expect that the Reserve Bank’s decision to leave the official cash rate unchanged at 4.75% today will fuel a new trend emerging where we’re starting to see Australians saving less and borrowing more money for home loans," RateCity chief executive Damian Smith said.

Prior to the announcement the Australian Chamber of Commerce and Industry warned that an official interest rate rise today would "punch a hole" in business and consumer confidence. The chamber’s latest expectations survey, released on Monday, again highlighted the pressures businesses are facing, it said.

"We are particularly concerned about a pre-emptive rate increase, or an early increase," the chamber’s director of economics and industry policy Greg Evans told reporters in Canberra.

"That that could be very damaging and punch a hole in both business and consumer confidence."

Safety in embers

PPG_image 6_June 2011Nothing negates the winter chill quite like an open fireplace. Not only are they practical and provide warmth on cool winter nights, but open fires also act as a centerpiece in a living area. In particular, many older, period-style homes often have an open fire in each room complete with iron surrounds and pretty, decorative tiles.

Regardless of your open fire’s style, homeowners with a yen for fireside thawing are being urged not to put safety on the backburner. According to industry body Archicentre, many of Australia’s 11,000 yearly house fires are preventable – and protecting your bricks, mortar and loved ones starts with changing your smoke detector.

The safest detectors are those electrically wired into mains power. Home owners annoyed by false alarms and flat battery beep warnings often disconnect the battery operated alarms or simply do not replace the batteries, warns Archicentre. Smoke detectors also need to be located to suit the design and layout of your home and, ideally, be fitted by an expert.

Similarly, all chimneys and flues require maintenance and if purchasing a period home, it pays to have a professional chimney sweep clean your chimney before lighting a fire. A build up of creosote can not only hinder the efficiency of your open fire, but also create a fire hazard. Old bird’s nests and other animal activity in your chimney can also cause problems – the least of which is a room full of smoke!

Regular maintenance of your chimney or flue will increase the safety and efficiency of your unit.

Women: an important buyer force in the property market

clip_image002Recent research indicates that more women are testing the waters of the property market on their own. Data released by RAMS Home Loans shows that more Australian women have decided to buy property by themselves in 2010 than in preceding years. The numbers have increased to almost half of the sole applications for home lending filed last year. The split has previously been around 70/30, with men making up the 70%.

It seems that a greater number of Australian women now feel more comfortable and knowledgeable about the entire property buying process. Perhaps it’s a combination of more education, cash and confidence that has helped shift the balance of property buyers. A higher number of marital and relationship breakdowns could also play a part in boosting loan numbers for females, however, the data does not specify if the sole female applicants are in fact single or not.

It appears that women are not just purchasing property to live it either. Many industry experts agree that a rapidly growing number of females are purchasing properties as investments and planning for a financially secure future.

Whilst this latest data suggest a new trend is emerging, it’s already widely recognised that women, as part of a family or couple, are often the main decision maker when it comes to purchasing property.

Share housing benefiting potential & current property owners

shareThe cost of being a tenant is rising at a rate unseen for some time, making saving a home deposit a challenge for many and leading others to wonder if they will be better off as a property owner.

Capital city rents grew a solid 4.8% in the first quarter of this year alone, which is an obvious jump on the 2.9% increase experienced in the year to March 2011*.

A number of Australians are finding their way around price barriers by reducing rental costs via share housing and/or buying a home then living with friends, siblings or others as their tenants. ‘Share housing’ isn’t simply a term for their rental situation, it’s applied to life after buying.

Mortgage Choice’s recent Future First Homebuyer Survey found this was the case for a significant proportion of its 1,013 respondents.

Company spokesperson Kristy Sheppard said, “8% of our recent 2011 Future First Homebuyer Survey respondents had already saved, or planned to save, on rent by moving to cheaper shared accommodation before buying and 14% will rent out one or more rooms after the purchase.”

“With rents on an upward trajectory that we haven’t seen for some time, affordable share housing is a clever way to save more of a deposit or to save it faster. It can also help make home loan repayments less of a burden after the purchase, though it may not be the ideal scenario.

“Our regular consumer surveys show us first time property buyers are getting older. I wouldn’t be surprised if shared rental housing is an option increasingly utilised by older people as another way to make saving a home deposit easier. If so, this would be especially prevalent in areas of dense housing and high property prices and living costs.

“Inhabiting the same rental space with people outside your family or romantic relationship is often a financial necessity when utility, petrol and other costs increase as they have recently. The same goes for home owners who are looking to create more room in their budget.

“With the outlook suggesting Australia is set to experience continued rent and other living cost hikes as well as interest rate rises, people who are determined to be property owners may want to look at share housing as a longer term cost-saving strategy.”

Source: www.mortgagechoice.com.au,

Tags: housing, investment, property management, rent, rentals, tenants

Housing loan increase weakest in a generation

 

Home Loans 1Loans provided by Australian banks and finance companies increased 0.6 per cent in March from the previous month, matching the biggest monthly increase since January 2009, the Reserve Bank of Australia said today.

Lending for housing increased – but at the slowest pace in at least 35 years.

Loans to consumers to buy houses rose 0.4 per cent from February and advanced 6.6 per cent from a year earlier, according to today’s statement.

While housing credit increased, the gain was the smallest since June last year, while the annual increase was the smallest in the history of the RBA data series, which extends back as far as 1976.

The weakening demand for housing loans adds to signals pointing to softening demand for real estate. Reports out this week indicated capital city home prices are flat or falling, including RP Data-Rismark’s series showing median prices posted their biggest quarterly drop in the survey’s history dating back to 1999.

St George chief economist Besa Deda said the weak borrowing numbers showed a softer housing market.

“This provides further evidence of weakening housing conditions, which has been reflected in moderating house prices,” she said.

“Historically low housing affordability is significantly weighing on house purchases,” Ms Deda said.

“In particular, the last RBA rate hike in November where the variable mortgage rate increased about 40 basis points appears to have put a dent in demand,” she said.

Overall credit nudges higher

The overall credit increase in February was revised to 0.6 per cent from 0.5 per cent, the central bank said. The median estimate of 22 economists surveyed by Bloomberg News was for a 0.4 percent increase. Lending gained 3.6 per cent from a year earlier.

Credit provided to consumers for purchases other than housing advanced 0.6 per cent from a month earlier for an annual rise of 1 per cent.

Lending to companies climbed 1 per cent from February and declined 0.6 per cent from a year earlier.

The annual increase in total credit of 3.6 per cent marks a relatively subdued pace compared with an average annual growth rate of 11 per cent for the preceding decade.

Half of the latest annual rise was recorded in the most recent four months.

Other personal credit outstanding rose 0.6 per cent in March, the biggest monthly rise since December 2009, but an increase of only 1.0 per cent through the year.

Business credit rose by 1.0 per cent in March, the heftiest monthly increase since October 2008, when the global financial crisis came to a head. However, annual growth remained negative, with a fall of 0.6 per cent.

The last time business credit posted an annual rise was in June 2009, the RBA figures showed.

BusinessDay, AAP, Bloomberg

Tags: banks, finance, loans, mortgage, property, real estate

 

 

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