8th December 2008

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8th November 2007

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14th December 2005

First or new home buyers are moving back into the market as rates come off and will settle to near historic lows. House prices become more affordable from their previously over inflated prices. So first home buyers are beginning to see value for money in buying their first house aided by a revamped Government assistance plan, which is by way of an increase back to the levels of the former Howard Government's grants, which is also adding to their optimism of affordability.

The RBA announced today yet another reduction in the official "Cash" rate by full 1% to match the reduction last month and brings the rate to a four year low of 4.25%. So have we been paying too much for a number of years under the RBA's monetary policy - I wonder?

The future of the Australian financial landscape will change as a direct result of the global financial meltdown. US Banks with Lending practices, which started under the Clinton Administration, that allowed low or no deposit Housing Loans and which spread to Australia with Banks racing for market share, will be a thing of the past for the for-seeable future as credit risk is tightened by Australian Banks and Approved Lending Institutions. Whilst this will be tough for new entrants into the Housing market, because they will need to build a deposit base before considering borrowing, it will have a beneficial effect on the economy by lifting the nations savings and the flow on to our Banking system will produce benefits within the industry and also rebuild financial respectability for an industry which would appear to have lost it way or at the very least some direction over recent years.

The Reserve Bank of Australia cuts the official "Cash Rate" by another .75% on top of the 1% drop last month, achieving a rate of 5.50% and the third reduction during 2008. However the sting in the tail is that despite the rate reduction buyers looking to move into the property market will need more deposit than they would have say 18 months ago. The simple fact is lenders are getting back to basics and measuring potential borrower's ability to repay any housing loan against their ability to save a credible deposit. And that deposit is going to be anywhere between 10% to 20%. So those contemplating a property purchase or in deed an investment property will need to have cash in the Bank, so to speak or some very healthy equity in their existing property.

Despite recent media scare mongering regarding Finance Brokers and other Intermediaries, Housing Loans Australia said today, "Our clients are well served on the interest rate front with over 98% of loan facilities being funded through our excellent relationships with the major Australian Banks. HLA's clients enjoy the most advantageous and appropriate interest rate positioning due to our 40plus years experience within the financial industry and not being a "Johnny come lately" simply looking for a fast buck. Experience counts, and our clients appreciate that very fact".

Finally some good news with the RBA reducing the "Cash" rate by a full 1% after many months of interest rate increases and world financial markets in a tailspin. Although the news was prompted by falling consumer spending and confidence, which is not only confined to the consumer sector by also starting to flow on to the Business and Corporate environments. He's hoping the markets will return to normally sooner rather than later!

Yet another interest rate rise announced today by the RBA, the second in as many months, when will it end.

Well the circus is in town again, as the RBA tries to halt the inflation "Dragon" by yet again punishing Australians for wanting to buy a house of their own. It's bad enough that the economy remains in "full forward" due to the Chinese economic boom, oil prices at historic highs flowing into sky rocketing petrol prices, groceries prices are increasing weekly without any apparent checks, so the RBA's answer is to punish home owners with yet another rate rise. Get used to it, because there seems to be more to come.

The worst kept secret in the country is out, with the RBA increasing the "Cash" rate by another .025%, however economists believe the end is insight for this cycle and the next may well be down.

Interest Rate remained on hold this week when the Reserve Bank said that economic conditions were starting to stabilize back to within it's comfort zone, which is good news after 6 previous increases.

Today the Reserve Bank of Australia again raised interest rates by .25% in an attempt to retain control of inflation, which according to the ordinary man and woman in the Street is already high enough. With Petrol prices at or near to all time highs as with staple food goods, due to drought across the country, the consumer is again hit hard by this attempt to slow the "Booming" economy. Perhaps it's time for a rethink of this mechanism?

As was widely predicted another Interest rate rise was announced today by the Reserve Bank of Australia, taking the "Cash" rate to 6.00%. Whilst this will be swiftly passed onto borrowers now is not the time to panic. Fixing your interest rate is one way of trying to combat the rising cost, however all lenders had some time ago lifted long term rates in anticipation of this latest rise by the RBA. There is no "silver Bullet" here, it's a simple case of bearing the pain and planning accordingly. If you have an investment property I would not suggest you now look to "increasing" the rental at this time, as that will just drive tenants away. Look at a rent review under advice from your Agent when due, not before.

Well the interest rate reprieve didn't last all that long with the Reserve Bank lifting the "Cash Rate" by another .25% to 5.75%, thereby ensuring that domestic interest rates will increase by a like amount. So when you're looking for a housing loan make sure you're talking to the right people and get as many choices as you can. An accredited member of the Mortgage Industry Association will be able to guide you through the process without charging you any fees, as they're paid by the lender you finally choose and their fees are regulated, so you can then select the right lender.

Yet another reprieve for the Housing industry as the RBA this week continued the Status-Quo on interest rates for the 13th straight month. However with the inflated price of petrol continuing to dog the Australian consumer and the effects of a greater number of cyclones around the country, economists are expecting a move upwards sooner rather than later.

The WA State Government has finally brought it's Stamp Duty on "Re-Financing" of existing housing loans into line with other States by allowing an extension of the current "stamping" (the duty which you paid originally on the Mortgage Document) for all refinancing under $5Million. This means you will not now "hit" twice for the same Stamp Duty as was the case before this new legislation came into being. This is welcome news for homeowners who are looking to take advantage of the current low rates and perhaps fix their housing loan under some very good offers in the marketplace at the moment.

Good news again this month as the RBA keeps a tight hold on housing loan rates.

Rates remain on hold again and look like staying that way for the foreseeable future. Or at least until the RBA can assess the impact the current high oil prices are having on consumer spending.