Top tips to help mortgage holders avoid budget blowouts

School holidays often impact Australian families juggling additional entertainment costs and their regular financial commitments. Many parents rely on credit for unplanned expenses and may not be aware that there are simple ways to take control of holiday cash flow headaches.

Home loan features, such as a redraw facility, can provide a clever way to stay on top of spending, according to Australia’s largest independently-owned mortgage broker, Mortgage Choice.

Company spokesperson, Kristy Sheppard said, “Borrowers are often unaware their home loan may allow them to stash extra funds for cash-heavy periods such as school holidays and save money over the long term. Some still put funds away into a savings account instead even if they are aware.”

“I question why a borrower who can contribute extra funds into their home loan as a buffer, and redraw without penalty when that money is needed for unexpected expenses, would store the funds in a savings account where the interest made is taxable. Which will build a stronger financial position?

“By contributing the extra into their home loan, they’ll accrue less interest, lowering their repayments. Every extra dollar above the minimum repayment reduces the principal loan amount the interest is calculated on. This same theory applies to funds kept in an offset account attached to the home loan.

“Of course, redraw and offset account usage costs need to be taken into consideration. There may be one-off setup costs to activate a redraw facility and some lenders set minimum and maximum redraw amounts and frequencies. Such a facility works better for those who occasionally redraw extra funds.

“Borrowers requiring frequent redraws would be better suited to a loan with an offset account. This links a savings account of sorts with their home loan account and ‘offsets,’ or uses, that amount to reduce the daily interest accumulated on their mortgage while still being available to withdraw. Note that some lenders offer partial offset only and some attract set up and ongoing maintenance costs.”

Consider Mortgage Choice’s other tips to consciously save, manage spending and enjoy the holidays:

1. Set a yearly savings plan. Utilise your home loan’s features or, if it works better for you, regularly deposit funds in a high interest savings account. Review it often to stay on top of holiday spending.

2. Involve the kids in creating a holiday agenda with a budget attached. Your children may be more appreciative if they are involved in the process of deciding what outings the family can afford.

3. Keep activity costs down, but the excitement up. With so many children armed with games consoles, invite your children’s friends over for a games night where everyone brings some food.

4. Research multi-passes and other discount offers. If pre-purchasing tickets, ask for multi-park or ride passes as well as family or student discounts. Monitor group buying sites for special deals.

5. Calculate what you want to spend next holiday season. Divide the total spending of the most recent holiday period by 12 (if you are paid monthly or by 26 and 52 for fortnightly and weekly) and add a little inflation to calculate how much you need to save for the next holiday season.

For home loan tips, trends, facts, data and other information, visit MortgageChoice.com.au, Facebook.com/MortgageChoice or Twitter.com/MortgageChoice. Or, call 13 MORTGAGE.

It’s a little worrying to find out that for those who live in cities or in the suburbs the air inside our homes and offices is actually more polluted than outside.  But help is at hand – and it comes in the form of the trusty house plant.  A study being conducted at the University of Technology in Sydney has found that plants can reduce nasty greenhouse gas emissions.

Have a look at this recent article form the Sydney Morning Herald, written by Michael Green.

”According to the World Health Organisation, urban air pollution kills 2 to 3 million people around the globe every year,” says Professor Margaret Burchett, from the school of environment at University of Technology, Sydney. ”But the amazing thing is that our air is more polluted indoors than outside.”

While Australian cities aren’t among the world’s smog-ridden worst, our population is overwhelmingly metropolitan. Eight out of 10 of us live in urban areas, Professor Burchett says – and we spend nine out of every 10 hours indoors.

In addition to the fossil fuel emissions that blow in from outside, indoor air typically comprises extra carbon dioxide, thanks to gas appliances and our breath, together with elevated levels of air toxics – volatile organic compounds (VOCs) from glues and synthetic materials.

”Inside our homes we have lots of petroleum-based products such as plastics, carpets, furnishings and electronics that are ‘off-gassing’ toxics,” Professor Burchett says. These contaminants can cause health problems such as headaches, asthma, loss of concentration, wooziness and nausea.

But here’s the good news: we can freshen the air by bringing greenery into our buildings, places that Professor Burchett describes as ”the most arid environment on Earth”.

Her team has been researching the way vegetation improves indoor air quality. They’ve found that pot plants can reduce the presence of VOCs by three-quarters and diminish carbon dioxide levels by a quarter. ”Plants help clean the air, there’s no doubt about that,” she says.

When it comes to dispelling the VOCs, it doesn’t matter what kind of indoor plant you choose, so long as you take good care of it. To reduce carbon dioxide levels, however, the more lush the foliage, the better. ”The bacteria in the potting mix are what takes up the toxics,” she explains.

”The plant nourishes the bacteria, and the bacteria do the uptake. If you keep the plant healthy, it will keep its micro-organisms healthy and they’ll do the job – they’re the same bacteria that suck up oil spills, so this is just an entree for them.”

In her living room, Professor Burchett has four pot plants (she had six, but two died recently while she was travelling – such calamities even befall the experts).

Over and under-watering are the most common ways to kill them, so she recommends testing soil moisture with your finger or a chopstick. To avoid mould growth, make sure you remove dead leaves and flowers.

”Have as many plants as you can, keeping in mind their level of shade tolerance,” she suggests. ”Half a dozen will make a significant difference to your air quality and also to how you feel.”

Professor Burchett has been working with psychologists to study the well-being effects of plants in offices and schools.

”They lift the spirits,” she says. ”They’re good for us psychologically. We’ve found that students perform better on memory and creative thinking tests. In offices, we found that one plant made all the difference in reducing feelings of stress and hostility.”

“When we’ve got greenery around us, it relieves our tension and fatigue.”

Source: www.yonderr.com.au

A FRESH round is likely to begin in the mortgage price war with Commonwealth Bank pledging to beat any advertised rate among its three big rivals.

The pledge has hallmarks of the ”unbeatable” campaign launched by National Australia Bank in New Zealand, a move that spurred on home lending but crunched margins among banks.

The move has been timed with the spring sale season, traditionally the most active period in the Australian housing market.

Intense competition has already emerged among banks across fixed rate loans, with some starting to price fixed rates lower than variable rates.

But CBA’s push extends to both fixed and variable rates and will remain in place until the end of September. The move is expected to draw a swift response from rivals National Australia Bank, ANZ and Westpac.

CBA’s executive general manager of retail products, Michael Cant, said the move was aimed at providing borrowers with competitive home loan deals.

”Our guarantee to beat our major competitors means we’re putting our money where our mouth is,” Mr Cant said.

Sluggish global economic growth, worsening debt market problems, as well as doubts about the Australian outlook have sparked predictions of cuts to official cash rates.

Source: www.domain.com.au

There’s good news for house hunters with lower mortgage rates and higher wages helping to improve affordability even as house prices edged higher.

A separate report, meanwhile, shows that people are staying put longer, underscoring how the property market has cooled in recent years.

The Housing Industry Association-Commonwealth Bank housing affordability index rose by 0.8 per cent in the June quarter, to 56.2 from 55.7 per cent.

Lending data from CBA, used in the index, showed an 0.8 per cent increase in the April-June period of Australia’s median home price to $471,400.

“Earnings growth and a small decrease in mortgage lending rates worked to improve housing affordability over the June 2011 quarter,’’ said HIA senior economist Mr Andrew Harvey. ‘‘These factors more than offset a small increase in the median house price.’’

Other recent reports point to stagnating or falling home prices in many regions around the country as concerns about the wider economy deter some people from the property market.

Still, unemployment levels remain low, at just above 5 per cent, and commercial banks have been trimming their fixed-term mortgage rates in recent weeks.

The Reserve Bank may also cut its key cash rate in coming months to reflect softening demand in the economy and reduced inflation risks

“Improved affordability is good news for home buyers,’’ said Mr Harvey. ‘‘If we look through the (global financial crisis) period which was skewed by unprecedented cuts to interest rates, we have not seen affordability reach its current level since 2006.’’

The home prices used in the HIA/CBA index are median loans financed by the Commonwealth Bank.

“They cannot and do not take account of changes in the mix of size, location and quality of dwellings financed,” the report said.

“Quarter-to-quarter variations therefore reflect any changes in the composition of housing financed, as well as changes in the price of a dwelling of a given size, location, and quality.

Home price trends

By most measures, however, home prices have been sinking in the new year. RP Data-Rismark information shows capital city home prices down 2 per cent in the year to June, on a seasonally adjusted basis. Home prices fell 0.2 per cent in June, according to RP Data-Rismark.

Borrowing for and building homes has slowed in 2011 while affordability remains constrained for many would-be buyers.

The pace of building has stalled amid uncertainty about the economy and about the direction of interest rates to come. Residential construction work fell by 4.1 per cent in the June quarter to $11.4 billion, the Australian Bureau of Statistics said yesterday.

The RBA will meet September 6 to decide on interest rates, with the market currently pricing in a 55 per cent chance of a 25 basis point cut.

Staying put

The slowing conditions in the property market, combined with higher transaction costs, are also keeping Australians in the same home longer, RP Data said today.

In 2001, the average hold period for a property between sales was 6.8 years. Now, it is 8.6 years, RP Data said today, with Melbourne residents the slowest to leave.

In Melbourne, the average hold period – the time between property sales – is currently 10 years, up from 8.3 years a decade ago. In Sydney the average hold period has risen to 9.5 years from 6.3 years a decade ago.

Story by Chris Zappone www.domain.com.au

Tags: housing, news, property, real estate, research

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Borrowers’ uptake of fixed interest rate home loans rose by less than one percent of approvals over August despite lenders introducing large reductions to the cost of their fixed term loans, according to Australia’s largest independently-owned mortgage broker.

Fixed rates accounted for 14.1% of Mortgage Choice’s home loan approvals last month, up only slightly from 13.3% in July (though rising for the third consecutive month), while the popularity of ongoing discount loans continued its steady increase, up from 38.6% to 41.5% of approvals.

Company spokesperson Kristy Sheppard said, “New borrowers’ appetite for ongoing discount home loans has steamed ahead for 10 consecutive months now. We have reached a point where demand for such mortgages is more than double that for any other, at 41.5% of all our August approvals.”

“This loan type, where the interest rate is discounted over the loan term usually in return for an annual fee, overtook standard variable as the favourite in April and hasn’t looked back. The trend speaks volumes about new borrowers’ and refinancers’ mindset around interest rate rises and the value they place – or rather, don’t place – on locking in their rate at the moment.

“I expected the take-up of fixed rate home loans to grow noticeably in August due to the well publicised reductions many lenders have been applying to their fixed term pricing. Despite our lender panel’s average three-year fixed rate falling half a percent in the past four weeks alone, fewer than one in seven new mortgage holders fixed part or all of their rate last month.

“Borrowers’ reticence to fix may also be influenced by memories of the break costs many people faced when considering switching out of their fixed terms during Spring 2008 to Autumn 2009 when the cash rate fell from 7.25% to 3.00% and home loan interest rates followed.

Demand for standard variable and basic variable home loans fell in August, to 19.2% and 18.2% of approvals, as did that for line of credit and introductory rate loans, to 4.7% and 2.4%.

Note: Mortgage Choice currently writes one in 25 new home loans in Australia, equating to approx. $10 billion in approvals per year, hence it provides a clear insight into borrower preferences. The 19 year old mortgage broker has a loan book of over $42 billion.

Tags: brokers, finance, home loans, mortgage, news, research

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The Reserve Bank has decided to keep interest rates on hold, despite fears of the Australian economy struggling outside the mining sector.

With instability in the European markets and concerns over a double-dip recession in the US, the RBA decided to keep official interest rates at 4.75 percent.

RateCity CEO Damian Smith said the decision to keep rates on hold is good news for homeowners and prospective buyers.

"With the number of property sales and mortgages plummeting this year, keeping the cash rate unchanged should give some confidence to both groups," Mr Smith said.

"It’s important that current borrowers use any rate pause wisely – paying down debt by increasing your monthly repayments is a tried and tested formula.

"For those about to enter the property market, having the highest possible deposit saved will help you reduce the impact of any future rate rises."

The Reserve Bank last raised rates by 25 basis points in November 2010.

Source: www.ninemsn.com.au

RP Data – Rismark Home Value Index Release

While dwelling values in Australia’s combined capital cities declined by a seasonally adjusted (s.a.) 0.6% in the month of July, and regional markets fell by a similar 0.7% (s.a.), homes in Sydney (+0.1% s.a.), Darwin (+0.6% s.a.) and Canberra (+1.9% s.a.) managed to produce small capital gains.

Based on approximately 178,000 home sales over the year to July, the market-leading RP Data-Rismark Hedonic Home Value Index recorded a seasonally-adjusted fall of -0.6 per cent in capital city home values over the month of July (-0.9 per cent in raw terms).

Canberra (+1.9 per cent s.a.), Darwin (+0.6 per cent s.a.) and Sydney (+0.1 per cent s.a.) bucked the soft trend set by the other cities, which, led by Melbourne homes (down -1.4 per cent s.a.), all registered declines during July.

Over the first seven months of 2011, Australian capital city home values were down -3.4 per cent. According to RP Data research director Tim Lawless, this national result conceals wide divergences across the individual cities.

Mr Lawless pointed to the example of Melbourne homes, which after rising by a stunning 29 per cent over 2009 and 2010 had now corrected by -5.3 per cent in 2011. In contrast, dwelling values in Canberra had actually risen in value by 1.8 per cent over the course of 2011.

Over the 12 months to July 2011, Australian capital city home values are off -2.9 per cent. Mr Lawless said that it looks like a multi-speed housing market: Brisbane (-6.6 per cent), Perth (-6.3 per cent), and Melbourne (-4.3 per cent) have all experienced significant declines over the last year, whereas the 35 per cent of Australia’s capital city population that lives in Canberra (+1.9 per cent) and Sydney (+0.5 per cent) had realised capital gains.

According to Christopher Joye, Rismark International’s economist, “Over the last 11 years, Sydney home values increased by a modest 5.6 per cent per annum compared to an Australian capital city average of 7.8 per cent per annum. Sydney housing has massively underperformed Perth (10.4 per cent per annum), Brisbane (9.7 per cent per annum) and Melbourne (8.9 per cent per annum) housing over this period. After years of being the perennial laggard, Sydney housing now looks to be a relatively resilient store of wealth.”

Mr Joye added that Australia’s housing market could be at a crucial inflexion point.

“The financial markets are pricing in five rate cuts while leading economists from Goldman Sachs, Deutsche Bank, Westpac and Macquarie Bank all believe that the RBA’s next move will be down.

As the most interest rate sensitive sector of the economy, the housing market will be the chief beneficiary of any decision by the RBA to reduce the cost of debt. Indeed, borrowers are already benefiting from de facto rate cuts.

The inversion in the yield curve has seen many banks start to slash the cost of fixed-rate home loans. Today lenders like Members Equity Bank are offering 3 year, fixed-rate loans of just 6.35 per cent, which is well below the standard variable rate benchmark of 7.8 per cent.

And while the rhetoric coming out of the central bank of late has been conflicting, UBS believes that the Governor’s testimony to Parliament last week shifted the RBA to a ‘neutral’ stance,” Mr Joye said.

“If rates do remain on hold, or begin to fall, we would expect to see Australia’s housing market find a base and begin to generate capital gains again. If the RBA has really come to the end of its tightening cycle – which we would find surprising given the high core inflation revealed over the last six months – 2011-12 will likely be judged one of the best buying windows seen in quite some time. The turning point will arrive when otherwise hawkish Australian consumers accept the notion that rates are not going to inexorably increase,” Mr Joye said.

Mr Lawless said that the current weakness in housing market conditions is related to the ongoing anxiety consumers have about their future finances as reflected in the latest consumer confidence data.

“According to the August Westpac-Melbourne Institute Consumer Sentiment survey, Australians still expect two interest rate hikes over the next 12 months. Combined with volatile equity prices, global financial market instability, and soft house prices, Australians are understandably reluctant to make high commitment decisions at the moment,” Mr Lawless said.

Mr Lawless also highlighted the premium housing market where comparatively larger declines in value will likely present patient investors with attractive opportunities during the next six months.

“Dwelling values across the most expensive capital city suburbs are down -6.2 per cent over the first seven months of year. This compares with a much smaller -2.3 per cent fall across ‘middle priced suburbs’ and a -2.1 per cent decline in the cheapest suburbs. Clearly, the ongoing financial market volatility is having a more marked impact on wealthier households, as are weak business conditions outside of the resources sector,” Mr Lawless said.

Despite some improvements in selling times in previous months, the average number of days it takes to sell a home has increased in June and July. Other key leading indicators also imply that market conditions remain soft.

“The build up in the number of homes being advertised for sale together with the slow-down in buyer demand has once again seen average selling times expand. Across the capital cities the average house is taking 55 days to sell compared with 45 days at the same time last year. We have also seen the level of vendor discounting expand to -7.2 per cent from -5.7 per cent in July 2010, which is in line with the lowest reading recorded during 2008. Finally, the weighted average auction clearance rate across Australia’s capital cities has remained slightly below 50 per cent over the past seven weeks”.

“If these soft trends persist, the Spring Selling Season is likely to open up some attractive investment opportunities for prospective buyers. In contrast, the selling environment is likely to be challenging for vendors, particularly if they have unrealistic price expectations,” Mr Lawless said.

Source: RP Data

Tags: economy, housing, market, news, real estate, research

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Next time you put your old newspaper into the recycling, spare a thought for your car.

An article in earth911.com  talks about some very clever people at Tulane University in New Orleans who have discovered a new bacterial strain that can convert paper into butanol, a biofuel that can be used as a substitute for petrol. The team from Tulane have been experimenting on copies of the New Orleans’ daily newspaper The Times Picayune, with great success.

Here’s an extract from the article about how it’s all done:

The strain, dubbed TU-103, is unique in its ability to produce butanol directly from cellulose, an organic compound found in plants and paper.

Scientists first discovered the strain in animal droppings, cultivated it and developed a patent-pending method to use it to produce biofuel.

At least 323 million tons of cellulosic materials that could be used to produce butanol end up in landfills each year in the United States alone, scientists said.

The new method could not only decrease America’s dependence on oil, but also make use of materials that would otherwise be thrown away.

“Bio-butanol produced from cellulose would dramatically reduce carbon dioxide and smog emissions in comparison to gasoline, and have a positive impact on landfill waste,” said David Mullen, the associate professor who discovered the strain with the help of two of his students in the university’s Department of Cell and Molecular Biology.

Researchers experimented with other forms of bacteria to produce butanol. But TU-103 is the only strain discovered to date that can grow and produce the biofuel in the presence of oxygen, which kills other butanol-producing bacteria.

The need to produce butanol in oxygen-free environments dramatically increases the cost of production, scientists said.

The new discovery will decrease the cost-per-gallon of butanol as fuel and make the conversion process more economically attractive to producers.

As a biofuel, butanol is superior to ethanol – which is typically produced from corn sugar – because it can readily fuel existing vehicles without any modifications to the engine, and it contains more energy, which means better gas mileage.

Butanol is also far less corrosive than other biofuels, meaning it can be easily transported through existing pipelines without fear of damage.

So if you thought newspapers were full of rubbish – think again! We thought this was a great alternative fuel source, what do you think?

For more information or to offset your carbon footprint visit: www.yonderr.com.au

Householders are being warned to watch out for scammers cold calling purporting to sell green products, or even offering them for free thanks to “rebates” in an effort to elicit funds or individuals’ bank account details.

The warning comes after earlier this month residents in northern Victoria received phone calls offering free solar panels thanks to their homes supposedly being rezoned by the council.

The calls, which appeared to listeners as though they were backed by the local council and the state government, contained automated messages that asked receivers to dial certain numbers to move to the next stage.

The pre-recorded message also claimed consumers would save up to $1500 a year in electricity costs, and then asked for their bank account or credit card details.

Rural City of Wangaratta Mayor Cr Anthony Griffiths has warned residents in other areas of Australia to be on the lookout for similar phone calls.

“The advice from the other relevant government departments seemed to be that there had been reports of it in other areas, they didn’t actually outline where, but it didn’t seem that we were an isolated case,” he says.

Griffiths became aware of the scam after ratepayers began calling asking if their homes had been rezoned.

“People were saying ‘well hang on, how can we be rezoned, we haven’t had any notification?’” he says.

“There was a good reason they hadn’t had any notification, it was completely bogus.”

Griffiths thinks his area may have been targeted as seven local councils in the region have bandied together in a group-buying exercise for solar panels to offer ratepayers discounts.

“[Perhaps] the scam decided to piggyback on that publicity, that’s the main reason we can focus on,” Griffiths says.

Although he is not aware of anyone being taken in by the fraudsters, Griffiths says there’s still reports of scattered cases of the phone calls coming through.

A Victorian Government spokesman says there is no “widespread problem”, however, admits it is hard to know if anyone has been conned by the scam.

“It’s often the case in these incidents that people are embarrassed to come forward if they’ve lost money to scams, that’s generally the case across the board with scams, so there is in fact, we believe, significant underreporting of this sort of thing,” the spokesman says.

“There’s no epidemic of it but that doesn’t mean it’s not occurring elsewhere and our Consumer Affairs people are keeping a very close eye on it.

“Wherever there’s new technology and claimed cost savings, there are also swindlers out to make a quick buck. So with things like renewable energy, solar panels, water efficiency and so forth, there are, in all those areas … instances of people trying to scam [others].”

For ways to spot a scam and avoid it, see SCAMwatch, a website run by the Australian Competition and Consumer Commission.

Source: www.domain.com.au

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A week ago experts were warning interest rates were going up. Now lenders are cutting them.

Sydney-based banks – Commonwealth, Westpac and St George – led the pack yesterday reducing their interest rates on fixed-term loans.

The fixed-term rates offered by these lenders are now well below the average discount variable rates which rise and fall with movements in the Reserve Bank’s official cash rate.

Variable rates are favoured by the vast majority of home borrowers but the head of retail banking services at Commonwealth Bank, Ross McEwan, said yesterday many borrowers wanted certainty with their home loan repayments and that fixed loans offered “that peace of mind”.

The cuts to fixed-loan rates follow a dramatic shift in global economic sentiment over the past few weeks. Growing concern about the euro zone debt crisis and the possibility of a double dip recession in the US triggered turmoil on international financial markets.

The decision by ratings agency Standard & Poor’s to downgrade the sovereign credit rating of the United States to AA+ from AAA has contributed to the volatility.

The interest rates on long-term bonds have also fallen sharply, making it cheaper for lenders to fund mortgages. This has helped banks offer lower interest rates for fixed-term home loans.

However, despite the stiff competition in the home lending market, figures released by the Bureau of Statistics yesterday showed the number of new loans to owner occupiers was stagnant in June.

Australia’s biggest home lender, Commonwealth Bank, cut the interest rates on its fixed home loans by between 0.25 and 0.6 percentage points yesterday. Westpac reduced its three-year fixed rate by 0.2 of a percentage point while the Westpac-owned St George Bank cut both its two- and three-year fixed home loan rates by 0.2 of a percentage point. ING Direct also reduced its fixed home loan rates.

Some three-year fixed mortgage interest rates are now more than 0.5 of a percentage point lower than the basic variable mortgage interest rates offered by the big banks.

But money market investors are betting that official interest rates – and therefore variable rate mortgages – will fall soon. The bill futures traded on local financial markets that predict the future movement of the Reserve Bank’s cash rate are pricing in a 0.5 of a percentage point cut next month and a further 1 percentage point of cuts by March next year.

Despite this, many market economists believe the Reserve Bank will leave rates unchanged until global economic and financial conditions becomes clearer. Last week, the Reserve Bank Governor, Glenn Stevens, said “the acute sense of uncertainty in global financial markets over recent weeks” had been a factor in leaving rates on hold.

The relative health of the economy was underscored yesterday when the National Australia Bank revealed earnings of $1.4 billion for the June quarter.

Story source: www.domain.com.au

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The Federal Government aims to introduce, by as soon as next year, mandatory energy star ratings for homes being sold or rented out.

Under the favoured system, vendors and landlords would have to pay about $200 to have their property assessed, with a total cost to homeowners and property investors of $1.1 billion over the next 10 years.

Housing experts said most McMansions would score very poorly on the ratings system, which would be similar to the methodology used to identify the energy efficiency of whitegoods.

Mick Fabar, director of private energy-ratings firm Green Homes Australia, said: “Through our experience with our rating tool, those two-storey McMansions would not get over zero.”

There are significant financial implications for owners of these homes – and most older dwellings which are also likely to rate lowly.

Owners would need to either spend up on going green or face the prospect of a lower sale price.

A Federal Government study into a similar ACT scheme operating since 1999, which rates properties out of 10 stars, found that a 1-star difference affected selling prices by 3 per cent.

Asked whether the scheme would have a negative effect on the sale price of some homes, a spokeswoman for Climate Change and Energy Efficiency Minister Greg Combet said: “It will allow buyers and renters to better compare different properties, making it easier to identify a property which uses less energy or water and thereby save money.”

But the Federal Opposition’s spokesman for climate action, environment and heritage, Greg Hunt, said such a scheme would create “enormous uncertainty”.

“It could push up the cost of rent for people just when they are feeling cost-of-living pressures,” Mr Hunt said.

“It’s another cost imposed on people from the Government.”

The new federal system is expected to replace the Bligh Government’s so-called Sustainability Declaration which was introduced in 2009.

Under the scheme, sellers were meant to sign a form detailing their home’s energy-efficient features.

But the property industry complained the forms were too complex and buyers were not interested in the information.

Story source: www.couriermail.com.au

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Reality TV shows about DIY renovating are BIG at the moment! The Block, Top Designs and The Renovators are all ratings winners. These programs have an uncanny ability to draw us in night after night until we feel just as fretful and exhausted as the quirky contestants themselves. But we just can’t get enough!

So how authentic are these shows and what impact are they having on real Australian home owners? Well, most professionals and experienced DIY enthusiasts would agree that if you take off the rose-coloured glasses and look behind the scenes, the renovating picture is somewhat different. Whilst the shows have a positive impact on getting people thinking about style and design, they don’t necessarily reflect the reality of a renovation. In the real world home owners are faced with designing a renovation well beforehand, getting planning and building approvals (which can take months) and mapping out the construction course. These shows are obviously more driven by entertainment needs and time constraints where the contestants and renovation activity are packaged into a prime time production.

Renovating programs can, however, provide excellent ideas and invaluable information to viewers who are thinking of undertaking a major overhaul. Things like sticking to a budget, using good trades people and only tackling one room at a time, are all important renovation principles. Marketing tips such as creating street appeal and a good first impression are also uncovered, which adds to the overall value of these shows. But if nothing else The Block and its rivals provide an interesting insight into how we as mere mortals cope with extreme sleep deprivation and intense pressure – and don’t we just love the fights, the tantrums and the major dummy spits!

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It is very exciting that the NSW Government has announced a grant specifically aimed at regional NSW. With Lennox Head, Bangalow, Ballina and the Hinterland all falling under this umbrella we can look forward to more interest being geared to the sales in our area.

The scheme is designd to encourage buyers to purchase in regional areas and will operate for 4 years from 1 July 2011. It provides a one off payment of $7000 to assist purchasers with the cost of relocating from their metropolitan home to a regional home.

Naturally there are some criteria that apply for applicants to be eligible for the grant. A complete  overview can be found at www.osr.nsw.gov.au.  

Some of the more relevant points are:

• The grant does not apply for the construction of a home on vacant land but only to existing homes or “off-the-plan” purchases
• At least one applicant must be an Australian Citizen
• Companies or Trustees do not qualify
• The metropolitan home must be sold within 12 months after settlement of their purchase in regional NSW.

Simon Rawlins our Property Manager based in Bangalow has recieved yet another testimonial to his hard work and dedication – please read on……………………………

For hard working, nothing too difficult, willing advisors, I thoroughly recommend Simon Rawlins and the Lois Buckett team.
They understand our needs as property owners and have matched tenants brilliantly.
Above all I trust Simon to “do the right thing” and that is an enormous relief.
PHIL GREGORY – WATER SYSTEMS SOUTH YARRA

The clouds of economic gloom gathering over the US and Europe could have a silver lining for Australian borrowers – a double rate cut is now predicted for next month.

After global shares sustained $2.5 trillion losses last week and US government had its credit rating cut by Standard & Poor’s late on Friday (US time), investors are now pricing in a 50 basis point cut by the Reserve Bank when its board meets on September 6, according to Credit Suisse data.

A move of that size would lop the official cash rate from 4.75 per cent down to 4.25 per cent and save the holder of a $300,000 mortgage about $93 a month if passed on in full by the commercial lenders.

Until a little over a week ago, most commentators had been tipping the next rates move by the central bank to be an increase following sharply higher inflation figures in the June quarter. That sentiment took a 180-degree turn during last week’s global sharemarket rout, a slide that looks like continuing into this week.

In early trading, local shares had shed another $27 billion in value – before a modest bounce – adding to the $100 billion lost last week.

Russell Jones, Westpac’s global head of interest rate strategy, said Europe’s debt woes and developments in the US including the country’s first-ever debt downgrade, would be on the RBA’s radar.

“During the GFC, it was very willing and able to cut rates aggressively when things deteriorated,” he told BusinessDay. “If it continues to get worse, they could well pull the trigger.”

Westpac broke ranks with other major Australian banks last month by predicting rate cuts by the end of the year, and a total of four by the end of 2012. ANZ, for instance, forecast the RBA would lift rates at its board meeting last Tuesday.

The prospect of lower interest rates may help shore up the real estate market in Australian capitals. The auction clearance rate remained steady in Sydney and Melbourne over the past weekend, at 56.2 per cent and 58.1 per cent, respectively.

RBA view

Investors this morning were betting that the trigger will be pulled, with the equivalent of two typical moves of 25 basis points likely to be wrapped into the one meeting in September. In a year’s time, the cut may be triple the size, with markets tipping the RBA’s cash rate will be slashed to 3.25 per cent – not far above the 3 per cent 50-year low reached during the depths of the global recession in April 2009.

In recent comments on interest rates, the RBA board has stuck with its cautionary language. The bank said that the “current mildly restrictive stance of monetary policy [was] appropriate”, and that although “year-end inflation was high”, it was most likely caused by “extreme weather events earlier in the year”.

But the RBA said measures that better indicate the trend in inflation had “begun to rise over the past six months after declining for the previous two years”.

“While they have, to date, remained consistent with the 2–3 per cent target on a year-ended basis, the board remains concerned about the medium-term outlook for inflation,” the RBA said last week.

Commonwealth Bank chief economist Michael Blythe was less confident of a rate cut, saying there was “a bit of divergence” between interest rate futures and other views on rate moves.

Mr Blythe said that while the odds had shifted towards a cut in the last few days, a move downward was still “a long way off”.

“A survey last Friday showed [most economists] expect no change at the September meeting. The RBA also signalled on Friday that a rate rise at some point was more likely than a cut. They refused to endorse market pricing for rate cuts in their forecasting assumptions,” he said.

Story by Thomas Hunter & Chris Zappone – www.domain.com.au

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