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Finance & Property Investment Digest 

05/08/2008 02:39 PM

RBA Holds Rates more info..

Following today's RBA board meeting the cash rate will remain at 7.25 per cent. Governor Glenn Stevens said "rising fuel costs, and lower asset values, has restrained demand" he concluded with " scope to move towards a a less restrictive stance of monetary policy in the period ahead is increasing" RBA-speak for rate cuts!

04/08/2008 04:04 PM

Big Four Margins Increase more info..

A report from The Sheet and InfoChoice claims the Big Four's margin on home loans has increased 30 per cent since January based on the gap between the 90 day bank bill and the standard variable.  Hardly surprising the banks don't agree.

04/08/2008 03:55 PM

House Prices Going Down more info..

House prices in the capital cities continue their decline with 0.3 per cent decline on average (ABS). Perth prices fell most at 2.4 per cent in the last quarter.

04/08/2008 03:58 PM

Banks threaten to pocket the difference more info..

While the RBA may consider dropping the offical rate tomorrow - lenders have indicated that they may not pass the reduction on to customers. They suggest that pressure from the government could could force banks to constrain lending and thus further stall the economy.

04/08/2008 03:51 PM

Could be good news for Xmas more info..

Despite inflation most economists are predicting rates will fall by Xmas. With some predicting a 0.50% cut in November alone. Only 2 weeks ago ANZ was predicting 2 more rises but now they are predicting the next move to be a cut.

17/07/2008 10:00 AM

RBA Hints That Rates Have Peaked more info..

The Australian Reserve Bank Governor Glenn Stevens yesterdat gave the strongest hint that rates have peaked. "It looks more likely now than it did a couple of months ago that this more moderate track for demand will continue," Mr Stevens said. That would "in due course begin to exert downward" pressure on inflation, he said.

04/06/2008 04:38 PM

Housing Market is Volatile more info..

RP Data/Rismark released the May 08 indices report and confirms that most markets have flattened. With outer Sydney values no down 20 per cent since 2003. While Adelaide's market increased over 20 per cent in the last 4 months. With Melbourne marginal and Sydney flat Brisbane is still growing showing 3 per cent. While Perth units declined 1.35 per cent over the same period.

04/06/2008 09:53 AM

Is Bankwest For Sale more info..

The Herald Sun today suggests that Halifax Bank of Scotland is considering the sale of Australian subsiduary Bankwest. The report also suggests that Bankwest has stalled it's branch expansion in eastern states due to financial woes of the parent

03/06/2008 04:45 PM

RBA Holds Rates Steady more info..

At today's meeting the RBA has again left the cash rate unchanged at 7.25 per cent. They acknowledge that there has been substantial tightening in financial conditions and they believe inflation will decline over time.

26/05/2008 12:56 PM

Housing Market Continues Slump more info..

The Real Estate Institute of Australia released first quarter figures that confirm Melbourne median prices have fallen 8.4 per cent from the previous quarter with Canberra falling 6.8 per cent.

26/05/2008 12:51 PM

Wizard Up For Sale more info..

Only four years after GE Money paid Mark and Adrian Bouris $500 million for Wizard Home Loans - it is now tipped that Mark Bouris may buy it back for $250 million. In the four years Wizard has lost 30 outlets from its branch network.

21/05/2008 04:05 PM

Westpac Tighten Low Docs more info..

Westpac have finally come into line with rest of the industry in that they now require an ABN - their policy on GST registration is ambigous in that while the talk about the $75,000 income requirement they don't appear to understand that an ABN and GST registration are different things!

20/05/2008 12:39 PM

Interest In Advance more info..

With income tax rates coming down for many people next year, now is a good time for property investors to think about bringing deductible interest payments forward into this financial year.

15/05/2008 01:51 PM

Banks Fees To Households more info..

Latest RBA figures show that bank fees levied to householders grew at 9 per cent in 2007 and the RBA suggests the growth is slowing. Many would argue it's about time since the total fees have grown from $3.415billion in 2004 to $4.736 billion in 2007 - that's 28 per cent in 3 years. If there are 8 million house holds - that equates to $592 each!

15/05/2008 01:45 PM

Virgin cuts back on mortgage sales more info..

Feature from the Sheet Just a month after licensing its credit card brand and handing over 550,000 accounts to Westpac, Virgin Money has cut back on mortgage sales. A notice has been posted in the home loan section of the group's website that reads: The cost of money is currently so high that we're unable to bring you the great value home loan we're synonymous with.

14/05/2008 05:21 PM

First Home Savers Scheme more info..

Yesterday's budget clarified the new First Home Saver Account scheme. This scheme allows first home buyers to make tax free contributions into the account and the Government will tip in up to $850 a year. The funds can only be used for a house purchase or converted to superannuation

06/05/2008 11:34 AM

Lenders tighten ellibility criteria more info..

News reports something brokers have known for months ie: lenders have tightened their lending policy criteria with reduced loan value ratios (LVRs) and increased income verification and rates loaded on higher risk higher LVR loans.

02/05/2008 04:12 PM

Where Not To Buy more info..

Apart from Mt Isa it appears that Sydney's western suburbs are the no-go zone for investors with Parramatta, Bankstown and Blacktown the repossession hot spots.

02/05/2008 04:10 PM

Reduce Fees Increase Rates more info..

The Australian Bankers Association said cutting fees will have adverse impacts on Australian consumers. ""A financial institution would be forced to consider either increasing its lending interest rates"

30/04/2008 10:24 AM

Property Market Stalls more info..

Interest rates are causing the house and unit prices in Sydney to stall, Apartments have come off 2.5 per cent in the last 3 months while average house prices came down 0.40 per cent. With the exception of Adelaide and Darwin all other cities in Australia are showing flat or negative growth.

22/04/2008 03:30 PM

Fixed Rate Roll Over Slug more info..

A lot of borrowers looked to fixed their loan rate for 3 years back in 2005 and now that face the unpalatable option of standard variable default offering from many lenders

22/04/2008 03:11 PM

What About RE Agents Fees more info..

According the ABS Real Estate Agents have hiked fees and charges by 16.57 per cent in the last year. News.com.au state "Preying on the rental and property markets across the country, agents have subsidised their income from home sales and commissions with an increases in hidden costs."

21/04/2008 01:26 PM

Bank Fees Crippling more info..

Industry monitor Cannex reports that bank fees are crippling with income from bank fees on deposit accounts from 2002 to 2006 increased by 40 per cent.

09/04/2008 12:12 PM

Consumer Confidence on Skids more info..

Today's Westpac-Melbourne Institute index of consumer sentiment shows consumer confidence continues it's slide down 1.3 per cent and 24.2 percent down from last year. Now at it's lowest since Jun 1993. Another result that should ensure RBA rate increases are on ice if not retreat.

09/04/2008 10:38 AM

Sydney Prices to Plunge more info..

Morgan Stanley chief equity strategist Gerard Minack suggests that Sydney property prices could fall by 25 - 30 per cent over the coming 2 or 3 years. With the top end being the most vulnerable. He suggests areas such as the central coast could see 50 per cent drop in values. Meanwhile AMP's Shane Oliver suggests that Sydney homes costing 8.4 times the typical income makes them "patently unaffordable" when compared to the US 3.6 and the UK 5.5.

09/04/2008 10:22 AM

NAB Tips Rates to Fall more info..

NAB chief economist Alan Oster claims that there is a good chance that the RBA will start cutting rates before the end of this year and that the cash rate could be back to 6 per cent in 2009

08/04/2008 01:29 PM

Time to rethink the comparison rate more info..

The broader issue for the industry, which is not subject to much analysis by ASIC, is the relevance of the formula for the calculation of the comparison rate. There is little doubt the imposition of this comparison rate has encouraged lenders to reduce up-front fees and to impose fees at the time somebody refinances a loan. Break fees are not part of the comparison rate formula.

03/04/2008 11:58 AM

Lenders Still Raising Rates more info..

Despite the RBA leaving the cash rate at 7.25% - lenders including AMP, Westpac and St George are loading anoth 0.10 to .015% on variable products

03/04/2008 11:18 AM

ANZ Wrap Up Origin more info..

ANZ has announced that it's white label wholesale funds provider Origin is being dismantled as a result of the credit crises. Origin's demise follows Macquarie's decision to run down its separate mortgage business, whose own interest rates were recently hiked by as much as 70 basis points.

02/03/2008 11:28 AM

RBA Says Rates Peaked more info..

The RBA's decision yesterday to leave the cash rate on the basis that they believe the economy is now slowing and "pointing to plunging consumer and business confidence and weaker growth in debt levels. ' Most analysts now believe there could be 2 rate cuts later this year.

27/03/2008 10:38 AM

RBA Chief more info..

Glenn Stevens Governor of RBA said today. in the Reserve Bank's case, we have been prepared to increase the total amount of liquidity substantially....Even with that, however, the relationship between the cash rate (or, more correctly, the expected future cash rate) and rates on high quality private paper at a three to six month term is much looser at present than it has tended to be over recent years. This means that the cost to banks of raising funds in the market has moved independently of the overnight rate. The presumption that their lending rates would and should move only in line with the cash rate, which had arisen in an earlier period when all these rates were much more closely related, has not been a realistic one in the recent environment... It looks as though the environment will remain quite challenging for us all for a while but the strength of the Australian financial system is, for Australia, a good basis for meeting the challenge.

04/04/2008 01:35 PM

Cannex Predict Rate Fall more info..

With many borrowers looking for the security of fixed rates, Cannex financial analysts say "there is a risk we are at the top of the cycle and it's very likely rates will come down at some stage of the fixed period leaving you locked into higher repayments''. Break costs on fixed rates can be very expensive if rates are falling.

24/03/2008 10:35 AM

Aussies Suspicious on Super more info..

A survey commissioned by the Australian Institute of Superannuation Trustees (AIST) found that more than two-thirds or respondents believed the Government would change the super rules by the time they retired, while 41 per cent were not sure if the age pension would still be around.

25/03/2008 09:49 AM

States concede consumer credit powers more info..

The Australian government will seek agreement from state governments that the latter refer their regulatory powers over aspects of financial services to the centre.

19/03/2008 02:47 PM

US Reserve Slashes Rates more info..

The US Reserve cuts rates 0.75 per cent to 2.25 per cent The Federal Reserve's Open Market Committee which sets monetary policy attributed the cut to further weakening in the outlook for the American economy

17/03/2008 02:53 PM

Refinancing Rush more info..

ABS figures suggest that 20,000 people per month are now refinancing their mortgages. About two thirds remain with the same lender - suggesting they are getting a better deal or a more basic product. Many people are wanting to consolidate their other debts into their mortgage, but loan providers want to see a change in the customers spending habits

17/03/2008 02:44 PM

Brisbane Auction Clearance Collapse more info..

While auction clearance rates around the country have declined Brisbane with just 24 per cent of auctioned properties cleared. Real Estate Institute of Brisbane suggest prices are too high despite a 3 per cent drop in the last quarter

14/03/2008 11:32 AM

Low Docs Options Decline more info..

Cannex report a 10 per cent reduction on low doc loan offerings in past 12 months. Saying " the credit crunch in the US has hurt a lot of people or made a lot of people rethink their loan book, particularly since a lot of the sub-prime in the US were also low doc loans."

14/03/2008 11:24 AM

Bluestone Pulls the Plug more info..

Specialist non conforming lender Bluestone has announced that it is withdrawing from commercial lending and will "materially reduce' residential lending in Australia and NZ. Bluestone blame this on the current state of global markets. Substantial lay offs are expected

13/03/2008 09:10 PM

Macquarie Raises 0.40% and 0.70% more info..

Having just pulled out of the mortgage market Macquarie Mortgages announced today a 0.40% increase in their standard loans and 0.70% for low docs borrowers. Their announcement states "There has also been further severe deterioration in global credit markets over the past month which has led to continued upward pressure on interest rates. The enigma is we now have a lender who has stated that they have no interest in return or repeat business from their client base, and so with market forces our of their agenda, we have no regulation to keep their rates and charges controlled. "

13/03/2008 02:41 PM

Lenders Load RBA increase more info..

All of the major lenders have again pushed their rates up beyond the 0.25% announced by the RBA this month. As a result in November 07 the industry standard variable rate was 8.32% since then three RBA increases but today's standard variable rate 9.32% a clear 0.25% over the RBA increases.

05/03/2008 06:02 PM

Government Investor Incentives more info..

Kevin Rudd said today "under the scheme, the Commonwealth will provide private investors with tax credits of $6,000 a year for ten years for new properties that are rented at 20 per cent below the prevailing market level" He went on "Mr Rudd said the policy could deliver weekly savings of $70 for some families by reducing rent on an average three bedroom unit from $350 to $280 per week."

05/03/2008 06:00 PM

Adelaide Bank Hikes Rates more info..

Once again Adelaide Bank have lifted their wholesale rate over the RBA amount - this time by 0.40 per cent

05/03/2008 05:56 PM

Macquarie Winds Back more info..

Macquarie's mortgage wing Macquarie Securitisation will wind back it's mortgage business due to the continued deteriorating global securitisation market.

01/03/2008 11:24 AM

Suncorp hits the brakes more info..

Suncorp issued a warning yesterday that lending volumes in its banking business could be lower for the rest of the year. Like every other lender, Suncorp faces a challenge sourcing wholesale funds at a reasonable price that it can use to support its rapidly expanding loan book.

28/02/2008 11:32 AM

Do you go for shares or property more info..

Chelsea Mes reports that investors are eyeing off the property market as a result of a shaky start the sharemarket year. The main drawback being rates - "It's been quite clear from the Reserve Bank's recent statements that there really isn't any scope for rate cuts this year or next year," Mr Hassan told NEWS.com.au. "That really does suggest that housing will wear some of the impact of tighter monetary policy over 2008-09."

26/02/2008 02:06 PM

GE Pulls Plug On 100% Loans more info..

As a result of higher default rates GE Money's mortgage insurer has instructed GE to cull their 100% home loan product. Loans for 100 per cent or more of a property's value can help borrowers with no deposit get into the market. However they have also been blamed for contributing to the rise in mortgage defaults, which reached a record 3002 last year, according to Supreme Court records.

26/02/2008 11:35 AM

Watch your Tax Claims On Rentals more info..

The ATO has published a warning to new investors to be careful of making mistakes. "You cannot claim costs associated with acquiring or disposing of a property, but they may form part of the cost base of the property for capital gains tax purposes...Renovation costs and costs to repair damage, defects or deterioration existing on purchase cannot be claimed as an immediate deduction." the ATO said

21/02/2008 07:43 PM

Fixed Rates Moving Up more info..

There has been another surge in fixed rates from a number lenders with CBA leading the charge with an across the board 0.25 per cent increase.

21/02/2008 01:31 PM

Growth is Slowing more info..

Signs that economic growth is starting to slow as interest rates bite. Even so Westpac's Bill Evans said the figures suggested "solid momentum in the economy in the first half of 2008". Therefore another 0.25 per cent increase most likely at next RBA meeting.

21/02/2008 01:26 PM

Perpetual Profit Falls more info..

Funds manager Perpetual Ltd reports an 11 per cent fall in profit due largely to its exposure to the US sub-prime. As for further sub-prime , CEO David Deverall said losses related to the EMCF could grow if credit spreads widened any further.

19/02/2008 11:44 AM

RBA may go for 0.50 more info..

Documents released on last months RBA meeting shows that they came very close to a half a percent hike in order to stomp on inflation. Analysts believe that is even more probable this time.

18/02/2008 07:02 PM

Australian Repossessions Increase more info..

Although nothing like the USA our foreclosure rate has increased to 0.23% of the number of private dwellings in NSW. The RBA says that voluntary sales achieve 15 to 20 per cent better prices than mortgagee-in-possession fire sales.

18/02/2008 06:58 PM

Government Switch Legislation more info..

The Federal Government will give responsibility for its cheaper bank switching options. Encouraging borrowers to vote with their feet. teh full system won't be implemented until November.

05/02/2008 05:01 PM

Yet Another RBA Rate Rise more info..

At its meeting today, the Board decided to increase the cash rate by 25 basis points to 7.0 per cent. The Board took careful note of recent events abroad and developments in financial markets. The world economy is slowing and it now appears likely that global growth will be below trend in 2008. Recent trends in world commodity markets suggest, however, that Australia's terms of trade are likely to rise further.

05/02/2008 11:37 AM

More Refinancing than Ever more info..

Australians are increasingly refinancing their mortgages through brokers, with the refinancing of loans taking up a larger percentage of new loan approvals, according to Australian Finance Group monthly index figures. Refinancing accounted for 37 per cent of new mortgages in January 2008

05/02/2008 11:35 AM

Mortgage Stress Rising more info..

Research by JP Morgan and Fujitsu Consulting estimates 750,000 homeowners will suffer mortgage stress during 2008. Up to 300,000 of those may default on their home loans and risk having their homes repossessed.

29/01/2008 11:04 AM

More rises in variable home loans more info..

Macquarie Bank wrote to variable rate borrowers on January 23, advising that the rate on its range of variable rate loans was going up 18 basis points. The bank said the rate rise was “a result of significant changes in credit market conditions". Aussie Home Loans, which sources its own brand of mortgages from Macquarie's Puma program, moved its variable rate the following day. According to Infochoice, Aussie's All-In-One variable rate rose 20 basis points to 8.42 per cent.

29/01/2008 11:04 AM

Housing deposits a favoured savings option more info..

In the first concrete policy initiative relating to financial services from Australia's new Labor government the scheme will provide a government contribution equal to 15 per cent on after tax contributions of up to $5000 for low income earners on no or low tax rates. The contribution will rise to 30 per cent for those on higher incomes, and thus the higher marginal tax rates.

25/01/2008 12:56 PM

UK Mortgage Approval Slum more info..

Uk approvals fell by 38 per cent in December the worst result in over a decade. Commentators put the slump down to affordability and a tightening of procedures in the aftermath of the US sub prime.

24/01/2008 02:11 PM

CBA Drops Fixed Rates more info..

CBA today announced a lowering of their 3 year fixed rate by .09 per cent and 0.19 per cent off their 5 year fixed rate- down to 8.40 per cent. They also have a further discount under their professional package lowering another 0.15 per cent making the 5 year rate 8.25 per cent

24/01/2008 10:58 AM

NZ Reserve Unmoved more info..

The NZ Reserve Bank has left the official cash rate at 8.25 per cent with an unchanged outlook - the result was widely expected.

22/01/2008 10:56 AM

Dont Panic About Super more info..

CEO of the Association of Superannuation Funds of Australia Pauline Vamos told local ABC Radio not that people should not panic about the share market instability. Saying “because superannuation funds do invest in a lot of different types of assets they can really survive really well in times of instability"

23/01/2008 10:51 AM

Will Property follow the Share Market more info..

John Beveridge discusses the arguments for an against a property slump. Australia has some of the least affordable housing in the world - will it take a dive in value.

10/01/2008 10:47 AM

Building Approvals On Rise more info..

NSW is leading the way with building approvals surging in November by 8.9 per cent according to the ABS - the highest level since May 2004

10/01/2008 10:47 AM

Building Approvals On Rise more info..

NSW is leading the way with building approvals surging in November by 8.9 per cent according to the ABS - the highest level since May 2004

16/01/2008 12:25 PM

Perth Prices on the Rise more info..

Following last years property price slump Real Estate Institute of WA reports December 1.1 percent rise following September quarter 1.3 per cent rise.

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