It’s tax time and property investors should show caution when preparing their returns.

Here are some tips:

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According to Life Rick Management in a recent flyer recieved at Lois Buckett Real Estate in Lennox Head, “the appetitie investors have for risk has significatnly fallen since late April, which has seen global sharemarkets fall by around 18% (at 9th August am).”

However, with the Australian Federal Government maintining its AAA credit rating we have the benefit of strong export partners.

With this information at hand we expect the markets to remain jumpy for quite some time and the usual trend is that investors will turn to real estate.

You have to hand over your phone number and can be told to take off your shoes. Now visitors to open homes for sale across Sydney could find their every move scrutinised by security guards.

Sales agents will soon offer the security personnel to vendors ”for as little as $995” a month to prevent items being stolen or damaged. They will also offer insurance policies costing between $295 and $925.

You may have thought that peace of mind would come from the vendor’s regular home and contents insurance, but generally this is not the case.

”Any insurance you may have is made void once you have willingly invited people into your home,” says a buyers agent, Peter Kellaher, whose new business Open Home Insurance and Security will provide the services.

Mr Kellaher says there have been reports of ”hundreds and hundreds” of cases of theft and damage at open homes in the past decade.

”People are getting more desperate,” Mr Kellahar said.

He introduced the Herald to Tom Teal, 49, whose wife had earrings, jewellery and sunglasses stolen from a bedside table at an Abbotsford open home in 2005.

”You would think people coming into your premises at an open home are going to be fairly trustworthy, but you live and learn,” Mr Teal said.

Channel Nine wasn’t taking any chances last weekend during the first open homes for The Block in Melbourne, where 30 of Mr Kellaher’s guards kept an eye on the 25,000 people who trekked through the four houses.

”While I don’t think there’s any chance fans of our show would come to steal something, we do have $5000 laptops sitting there,” says the show’s executive producer, Julian Cress.

Property sales agents are also keen to promote the idea of security and insurance for regular open homes.

Agents say they are not liable when it comes to vendors, though Mr Kellaher says that in the case of tenants, they are. He points to last year’s reforms to the Residential Tenancies Act (clause 61) which state that if a tenant is forced to open their home and something is damaged or stolen, landlords or their agents could be forced to pay compensation.

The senior policy officer at the Tenants Union of NSW, Chris Martin, is reluctant to endorse any insurance policy and is not sure tenants have to agree to an open home.

”They can show prospective purchasers, but that doesn’t mean the next-door neighbour or any old stickybeak,” he said

Story by Stephen Nicholls www.smh.com.au

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Balancing lifestyle desires with budgeting necessities is a greater challenge as living costs rise and the economy looks uncertain. How are you preparing to cope with tougher times?

Australia’s largest independently-owned mortgage broker, Mortgage Choice suggests thinking hard about making changes to your home loan situation now to reap rewards over the long haul.

Spokesperson Kristy Sheppard said, “Revisiting your loan repayment strategy during a tumultuous period such as the one we are experiencing now will help prepare you for what may lie ahead.”

“For example, increasing your repayments by any amount above the minimum will reduce the principal loan amount owed, thereby reducing the loan’s term and interest paid over its lifetime. So too will contributing lump sum payments such as your tax return or end of year bonus. This builds a safeguard, helping prepare your financial position for unforeseen changes.

“Importantly, if misfortune doesn’t come your way you will be living debt free sooner. This can open the doors to other investment opportunities from which you can build a stronger financial future.”

Mortgage Choice offers the following helpful hints to get you ahead:

Round ’em up!

Consider rounding up your home loan repayment amount. Take a loan of $350,000 at 7% over 30 years. If the monthly repayments of $2,329 were rounded up to $2,500 at five years in and that continued until the end of the loan term, the loan will be repaid approximately four years earlier and the interest owed is reduced by over $69,200 (if all loan aspects remained as is).

Visit your loan more frequently

Depending on the loan type and lender, you may save thousands of dollars in interest by paying a loan fortnightly. For example, a borrower with monthly repayments of $2,000 will pay $24,000 off their loan by year end. If they paid fortnightly, by splitting their monthly repayment in half and making repayments of $1,000, they will pay $26,000 as there are 26 fortnights in a year.

Take advantage of extra funds

An offset account attached to the home loan account acts as savings that reduce the interest accumulated on the loan amount. For example, if the above-mentioned loan has $5,000 deposited in a full offset account from day one, the term is reduced by approximately 14 months and the interest owed is reduced by around $33,856. Note some lenders offer partial offset only.

Health check it

Review your loan and decide if you need all the features you may be paying a premium for. Compare it against others by getting a home loan health check from an experienced mortgage broker, to see if you can save money by negotiating a better deal with your current lender or by switching lenders.

Weigh up good vs. bad of switching

When deciding whether to refinance take a good look at the pros and cons, including the costs and what you really need as opposed to want. Remember to factor in all loan aspects, like features, rate, repayment type and frequency, accessibility and fees. It may be cheaper to keep your existing loan rather than pay new loan costs such as application fees, lenders mortgage insurance, registration fees, account fees, discharge fees, etc. Check with your broker to help you make the final call.

For home loan tips, trends, facts, data and other information, visit MortgageChoice.com.au,

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It is always refreshing to hear good news and it is with great pride that I publish this testimonial, revieved from a happy renter.  For me, as a principal and licensee, it is extremely heartening to hear that that culture and environment within our office is something that infiltrates into the larger community and affects people when they are first greeted by my dedicated staff.  So, here it is:

Dear Lois

Thank you for your kind correspondence relating to our recent leasing at LENNOX HEAD.

I have been delighted with the uncommonly high level of service offered by Lois Buckett Real Estate and can offer only pleasing feedback for everyone we have encountered that be Paula de Vos, Simon Rawlins and mostly Karen Stone.

Karen was very effective when communicating with myself and with the landlords. Her efforts led to the two parties reaching a happy outcome. Karen was also good enough to show the property four times while we were attempting to engage a third party to share the rent.

I must also mention the very kind gentleman who mans the office on Saturdays; he had just finished for the day and offered to take my housemate through so that his five year old son could see the property before we moved in.

Paula in particular plays a very important role in the office. Her kind demeanour and fresh appearance makes it very easy and pleasant to pop into the office, and one leaves having been listened to and assisted.

Lastly, your website is very fresh and uncluttered, the colours are beautifully chosen and well balanced. The fonts used are contemporary and clean. The layout and general navigation is more slick and stylish than any other property website that I have seen.

Again, it is noticeable that all of the staff have been very well appointed. I feel compelled to encourage you all to hang in there with the persistent softness of both the rental and sales markets. Keep up the great work!

Yours sincerely

Katie Gold

Commonwealth Bank of Australia has launched an online game created by ad agency BMF to allow would-be investors to simulate life in the property market.  

The announcement:

“Commonwealth Bank today released Investorville, an online simulation tool for budding property investors. Investorville helps users de-mystify the often complex world of property investment, including simulating ongoing costs, without ever putting any of their own capital at risk.

Commonwealth Bank and creative agency BMF created the unique property investment tool, which combines market insights from RP Data and innovative web-based technology. Investorville mimics reality to provide people with real-time exposure to the property market, allowing them to make more informed property decisions.

Investorville is aimed at existing home owners who may not realise their potential to invest in real estate, as well as those who already own an investment property. Available online, the site is designed to be as fun and engaging as it is educational and informative.

Mark Murray, General Manager Commonwealth Bank Consumer Marketing, explains the rationale behind the development of Investorville:

“Making the leap from owning your own property to buying an investment property can seem quite daunting to a lot of people. Investorville helps to break down common misconceptions and show the practicalities of property investment.

“The really beneficial part of Investorville is that users can, in the true sense of the term, try before they buy. The properties and data are reflective of the Australian property market and the types of properties available” Mr Murray went on to say.

Aaron Michie, Interactive Concepts Director at BMF, the creators of Investorville, explains further:

“We’d seen property games and property investment planners before, but none seemed to offer an experience that a person could apply to the real-life challenges they were facing. Investorville combines sophisticated economic modelling and real market data with a simple user-friendly gameplay to give people realism and simplicity.”

Commonwealth Bank’s Investorville is the second online innovation developed by the Bank to enable people to be better informed when it comes to real estate. Launched in 2010, the Commonwealth Bank Property Guide iPhone App uses augmented reality to overlay data and tools onto the phone’s screen, providing property information on almost any premises the phone is pointed at. Since launch the Commonwealth Bank Property Guide iPhone App has been downloaded over 160,000 times.”

Investorville can be found at www.investorville.com.au

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ONLINE real estate voyeurs may notice Australia’s capital cities looking greener, cleaner and generally more attractive.

After 18 months touring in cars with roof-mounted cameras, and then blurring the scenes it recorded for privacy, Google this week updated much of the Australian imagery it uses for its Maps and Street View technologies.

Google’s upgrade – the first major improvement to the Street View service introduced here in August 2008 – affects capital cities and coastal and country towns.

However, only Google offers the Street View technology and its reach is greater.

Google used Street View to springboard into a real estate search engine business but this plan was canned in early 2011.

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New home sales posted their biggest monthly fall in five years in June, amid weakening confidence in the economy and worries about higher interest rates.

New house sales dropped sank 17 per cent in flood-disrupted Queensland and 10 per cent in Victoria. New South Wales saw a more modest drop of 1.8 per cent for the month.

Nationwide, new home sales slumped 8.7 per cent, seasonally adjusted, in June to about 8000 deals, according to the Housing Industry Association – JELD-WEN. June’s drop was the steepest monthly decline since May 2006 and followed a 0.2 per cent slip in May.

“Evidence is mounting that weakness in the new home sector is accelerating even with interest rates on hold,” said HIA chief economist Dr Harley Dale.

The new home sales dive is the latest sign of tough times for the housing market, with auction clearance rates in Melbourne and Sydney hovering in the 50 – 60 per cent range, down on last year.

Borrowers with variable mortgage rates will also be watching closing the Reserve Bank’s monthly interest rate meeting tomorrow, with the ANZ among banks predicting a rate rise. Most commentators, though, tip the RBA will leave its cash rate on hold.

Home prices have also fallen, posting a 2 per cent fall in the year to June, according to RP Data-Rismark.

“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’s Dr Dale said.

Among other states, new home sales fell 6.3 per cent in Western Australia and were flat in South Australia for June, HIA said

Source: Chris Zappone www.domain.com.au

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The 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."

Australia is in the throes of a renovations boom, with estimates $10 billion of renovations will take place in NSW this year alone and even our television schedules are being remodelled by a plethora of DIY shows. The Australian Bureau of Statistics has watched the value of large alterations to houses in NSW reported, or applied for through council development applications, rise in 2010 to $2.25 billion, up 11 per cent on the total in 2009 of $1.99 billion.

However, the executive director of the Master Builders Association of NSW, Brian Seidler, believes that figure, when non-DA works and jobs costing less than $10,000 are added in, would top $10 billion of renovations in NSW a year.

”A lot of people are now choosing to improve existing homes and while they might be doing a lot of work themselves, they’re also employing licensed builders, architects and professionals to do the specialised work they can’t do,” Seidler says.

It’s impossible to know the exact numbers, yet all the indications are that people are increasingly turning to DIY renovations to make their money go further. There are certainly more owner builders, who at least project-manage the work. ”We’re probably doing 30 per cent to 40 per cent more business this year than last year,” says Scott Joass, account broker for owner-builder insurance company Savill Hicks Corp. ”The number of people doing their own renovations as owner-builders has really jumped, particularly in the last six months.”

With the GFC, money is tighter, and the manager of Australian Owner Builders, Phil Graf, says DIY owner builders typically save between 20 per cent and 40 per cent of the cost of jobs when they do things themselves.

”Often, they’ll have a tradie in the family who’ll lend them a hand when they need it,” Graf says.

The NSW manager of Archicentre, Ian Agnew, says the renovations boom is happening because people are choosing to do up their existing houses rather than move. ”When you move house it costs $30,000 to $50,000 in costs and stamp duty, so people are seeing real value in renovating instead,” he says.

Yet Agnew concedes the average cost of a Sydney architectural renovation is about $500,000, so it’s not surprising many resort to DIY.

The wealth of information on renovating in newspapers, magazines, websites and particularly TV shows is driving the DIY boom, Joass believes. On TV, Channel Nine’s five-nights-a-week The Block began late last month and its weekly Top Design started last week, while Ten’s The Renovators starts tomorrow night six nights a week. Meanwhile, ABC has its own solid-rating Grand Designs.

People are now just staying home more and nesting, the executive producer of The Renovators, Judy Smart, says. ”We’re helping demystify renovations and make them accessible with lots of tips on how to do it, and it’s so satisfying to be in a home that you’ve put so much blood, sweat and tears into improving,” says Smart.

And don’t stress out if it doesn’t work out, says one of The Block renovators, Waz (reality TV show contestants are only known by their first names until they finish). ”You’ve got to have fun with it,” he says. ”If you make a mistake, paint over it, or take those blinds that don’t work back and exchange them for ones that do. Don’t blow mistakes out of proportion.”

Yet the general manager of valuers Herron Todd White, Michael McNamara, can see dangers in copying the DIY renovators you see on TV, particularly if you are doing it for resale. You could be better off doing nothing at all: ”Don’t forget that people actually pay a premium for unrenovated properties.”

He also warns that buyers can often pick a DIY project a mile off. ”Whether the quality of your finishes is anywhere as good as an experienced tradesperson is questionable.”

But there’s no harm if you are adding value. ”If you are a first home buyer and scraped together the funds for a deposit, you may not have the funds to engage professionals. So if you are looking to build some equity into your home, a DIY renovation is perfectly acceptable.”

A landscape contractor, Richard Rees renovated his house in the early 1990s and hasn’t stopped renovating since.

Though his only previous experience was some casual work on building sites while he travelled overseas, he has learnt as he’s gone along.

So he wasn’t at all put off when he first entered a house he was interested in buying in south Cronulla and discovered it was in a terrible state.

”The plaster was peeling off the walls and there were three layers of carpet underfoot which had decades of being impregnated with dogs’ pee and poo,” he says. ”Other people were walking in – and then straight out again.”

Rees, however, bought the house for $835,000 in January 2009 and set to work immediately, ripping out all the carpet, pulling off the rotting plaster, knocking down some of the interior walls, cutting open doorways, replacing many of the windows and much of the roof and bringing plasterers in to redo the remaining walls. An outside dunny was turned into a guest toilet and attached to the sunroom.

”I brought in tradespeople for the plumbing and electrical work and for the specialised jobs but I did just about everything else myself,” Rees, 46, says.

”I spent about $150,000 and probably saved $100,000 by doing so much of the work myself.

”But you do tend to invest a lot of emotional and physical energy into a renovation and you also have the discomfort of living in the house while it’s done.”

However, just as he finished the renovation, his wife, Dawn, 45, got a new job in a different part of Sydney and, not wanting to commute for 90 minutes every day – especially since she would miss their children, Fynn, 9, and Gracie, 5 – the couple decided to sell the three-bedroom, two-bathroom property on Richmount Street.

It goes to auction today through the Cronulla Real Estate agent Justin Buck (0410 424 444), with expectations that it will fetch about $1.25 million.

”But one of the most satisfying things about a renovation is showing people how much it’s changed,” Rees says.

”Sadly, that didn’t happen in this case. People only entered the house before for as long as they could hold their breath, so no one really knows what it used to look like.”

Qantas baggage handler Chris Hazell chose to do as much of the renovation work as he could himself when he decided to restore his old house in Bexley to its former Federation glory.

While he engaged tradespeople for most of the major work, he did most of the labouring and all the smaller jobs. “I probably saved around $30,000 by doing that on the renovation,” says Hazell, 52.

“It did take up a lot of man-hours, though. And living through it could be tough. We had no bathroom – only an outside toilet – for four weeks and no kitchen for two. My wife said she’d never go through it again. But the beauty of doing so much of the work yourself is that you can have it exactly as you want it. You can really put your heart into it. I love this house and what I’ve done to it.”

The house, on St Georges Road, had been divided into two separate flatettes, so Hazell turned it back into a three-bedroom single home and installed a new kitchen and bathroom. He also rebuilt the veranda around the house, re-weatherboarded the back, put on a new roof and installed fresh ceilings.

But the major source of enjoyment for Hazell and his wife Christine, 51 – the parents of Christian, 24, and Annabelle, 21 – was working on the special Australiana features he added.

Descended from First Fleeters, and with a great-uncle killed in World War I, as well as a reverence for the coming of Federation in 1901, he wanted the house to reflect his passion.

As a result, he had a coat-of-arms displayed on the veranda, terracotta figurines of kookaburras in Diggers’ hats added to the roof, and leadlight windows and ceilings through the house adorned with images of kookaburras and rosellas.

“I’ve lived here for over 20 years and I hope I’ll be here for another 30,” he says. “I started renovating four years ago and there’s still stuff I want to do to it. A renovation, once you start, never ends!”

1. Structural renovations might require DA approval, so go to your council first, andd check with the Office of Fair Trading about home warranty insurance. In NSW, renovations exceeding $12,000 must be insured.

2. Use licensed professionals where you need to, with things such as plumbing, electrical works and airconditioning, Brian Seidler says.

3. Make sure you ask every possible question, even if it makes you look like an idiot, says a contestant on The Block, Waz.

4. Scope the work effectively, says the author of Planning Your Perfect Home Renovation and editor of website renovation planning.com.au, Alex Brooks. “There’s not much point painting termite-infested window frames or putting in new lighting if the wiring is buggered.”

5. Factor into your budget a 10 per cent buffer for emergencies, such as price rises or having to repair faulty work, and then stick to the budget religiously, say the founders of interior design company Designer Boys, Gavin Atkins and Warren Sonin. If you don’t use that extra, it’s a nice bonus at the end to buy furnishings.

6. Go for fixed, upfront quotes from tradies rather than quotes for work by the hour, Atkins and Sonin say. “And make sure you get them in writing,” Sonin says.

7. Get a home warranty inspection report on work done by owner-builders, which will reassure potential purchasers if you later sell the house, Ian Agnew says.

8. Check out online sites for second-hand bargains, Brooks says. “But always try to check the quality of what you’re buying first.”

9. Don’t overcapitalise, Also, keep resale in mind.

10. If you’re doing it with a partner, make sure you respect each other’s opinions, Waz says. You’re in it together, so work with each other, not against each other.

Story by Susan Wellings www.domain.com.au

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Almost ½ of Gen Y buyers will purchase for investment first

43% of Generation Y’s upcoming first-time property investors are putting aside the traditional ‘Great Australian Dream’ of a home for now and instead buying an investment property as their first purchase, according to the country’s largest independently-owned mortgage broker.

Not only will they ignore the First Home Owner Grant and first home buyer concessions, 77% of Gen Y respondents to the national Mortgage Choice 2011 First Time Property Investors Survey* are making lifestyle sacrifices to achieve their goal. This compares to only 66% of Gen X and 66% of Baby Boomers.

These younger Australians’ biggest concern for the next 12 months was interest rates, whereas for Gen X it was other costs of living such as utility bills and for Baby Boomers economic management at a Federal Government level was the primary concern.

Mortgage Choice spokesperson, Kristy Sheppard said, “Our findings call into question the concept of the ‘Great Australian Dream’ for people aged 30 years and younger. Is it still a home, is it property in general – whichever type they can afford – or is it simply about investing in an asset they expect to bring in income and/or appreciate in value?”

Key motivations to buy

All generations agree the top motivator to purchase an investment property is ‘I want to set myself up financially for the future’. Delving further into these for Gen Y, 15% said ‘I can’t afford to buy the home I want so I’m taking the first step with an investment property’, 14% said ‘I’m not ready to own my own home but want to get a head start in the market’ and 8% said ‘I don’t wish to own my own home but I see the benefit in having an investment property/ies’.

The majority of all survey respondents plan to rent the property to an unknown, but Gen Y was much more likely to rent to family or friends. 22% will do so versus 8% of Gen X and 10% of Baby Boomers.

“Whilst it is clear that every generation is focused on profiting from their investment over the long term, many Gen Y respondents recognise building a nest egg rather than building a nest may better suit their income and needs at this early stage of their lives,” Ms Sheppard said.

“In addition, I’d say a large proportion is quite comfortable residing in the home created by their parents!”

Sacrifices, purchase partners and research

Despite stereotyping of Gen Y as the ‘me generation’ who expects things on a platter, most respondents are planning to make (or were already making) lifestyle sacrifices to enter the market. The top 10 were:

1. Eat out less and cut back on take-away food – 65%

2. Cut back on general day to day spending – 64%

3. Miss out on a holiday – 47% (the least likely of any generation)

4. Cut back on alcohol related spending – 40% (most likely)

5. Delay a vehicle purchase – 28% (least likely)

6. Change jobs for higher income – 28% (most likely)

7. Take on an additional job – 23% (most likely)

8. Delay having children – 22% (most likely)

9. Rent out one or more rooms in my home to help me cut costs – 20% (most likely)

10. Purchase a less expensive property than desired – 20%

The survey found Gen Ys more independent than their elders. 26% will buy solo, versus 23% of Gen X and 22% of Baby Boomers. In terms of co-owners, ‘partner’ was the top option for all, just as the internet is the preferred source for researching their purchase. Traditional websites are favoured, however one in five Gen Ys are using social media sites, compared to just 11% of Gen X and Baby Boomers.

For home loan tips, trends, facts, data and other information, visit MortgageChoice.com.au

* Ticketek Insights (now Nine Rewards) ran the independent survey from 17 to 24 June 2011, interviewing 1,060 Australians who were purchasing their first investment property in the next two years. Respondents were evenly split between male and female while 28% were Generation Y, 45% Generation X, 27% Baby Boomers and less than 1% were Builders. For the purposes of this survey, Gen Y is born between 1980 to 1994, Gen X between 1965 and 1979, Baby Boomers between 1946 to 1964 and Builders between 1925 to 1945. Each major state (NSW, VIC, QLD, SA and WA) had just over 200 respondents while NT and TAS were not used in state-based comparisons due to their small number of respondents.

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THE Australian dollar has reached an 11-week high, benefiting from weakness in the US dollar and growing uncertainty surrounding America’s debt crisis.

At noon (AEST), the Australian dollar was trading at 108.83 US cents, its highest value since May 11, and up from 108.13 US cents on Monday afternoon.

The domestic currency reached 110.11 US cents on May 3, a record high since the currency was floated in December 1983.

This morning, traders were awaiting a speech from US President Barack Obama, hoping it would provide some details about a solution to ongoing debt-ceiling negotiations.

Mr Obama failed to provide any new information and this caused the US dollar to be sold-off and strengthened the Australian currency, said John Horner, foreign exchange strategist at Deutsche Bank.

In a rare primetime televised speech, the president rejected a Republican proposal to temporarily lift the debt limit, arguing it would leave the underlying problem unresolved and lead to a repeat of the current crisis in six months.

“The Obama speech didn’t deliver any progress on moves towards a resolution of the debt-ceiling issue,” Mr Horner said.

Traders are now awaiting a speech from Australian central bank governor Glenn Stevens, due at 1305 AEST in Sydney.

“(We’re) waiting for what governor Stevens has to say, particularly to what extent he emphasises tomorrow’s CPI (consumer price index) data, given the importance placed on them in the July minutes (for the central bank’s board meeting) released last week,” Mr Horner said.
Meanwhile, the Australian bond market was mixed at noon.

At 1200 (AEST), the September 10-year bond futures contract was trading at 95.085 (implying a yield of 4.915), up from Monday’s close of 95.075 (4.925 per cent).

The September three-year bond futures contract was at 95.610 (4.390 per cent), down from its previous close of 95.620 (4.380 per cent).

Story AAP  source: www.heraldsun.com.au

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Households will pay at least $60 – and up to $190 – a month for internet services on the National Broadband Network, data from an internet provider shows.

The first retail pricing for services over the $36 billion NBN were released by internet provider Internode on Thursday.

Packages start at $59.95 a month for a basic 12-megabit-per-second (Mbps) service with a 30-gigabyte quota for downloads and uploads, The Australian newspaper reported on Friday.

At the top end, Internode said it would charge $189.95 a month for a 100Mbps service with a 1000GB download quota.

Internode blamed the high prices on ‘existing flaws in the NBN Co wholesale charging model’ and warned that regional customers could have to pay more to connect to the network.

Telstra, the commonwealth and the builder NBN Co signed definitive agreements for the rollout of the $35.9 billion scheme in June.

NBN Co plans to provide a fibre-optic cable network to 93 per cent of the population while the remaining seven per cent will have either fixed wireless or satellite broadband over the next decade.

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There was only modest overall growth in Sydney rents in the June quarter, according to the latest Rental Market Report by Australian Property Monitors. The median weekly asking rental for houses in Sydney rose by 1 per cent, from $485 to $490, while apartment rentals remained at $450.

Most other capitals recorded a decline in rents or static prices.

Rental growth in houses was particularly flat, with only Sydney, Canberra and Darwin recording increases. House rentals declined in Melbourne in the quarter, while Brisbane, Adelaide and Perth recorded no growth in median asking house rentals.

Median rentals for apartments rose in Brisbane, Perth and Canberra. Melbourne and Sydney recorded no growth, while rentals in Adelaide and Hobart fell.

Darwin remains Australia’s most expensive capital in which to rent either a house or a unit with a median asking weekly rental of $540 for houses and $450 for units. Sydney and Canberra are the next most expensive with median house rentals of $490 and $475 respectively and median apartment rentals at $450 and $435 respectively and Hobart is the cheapest with median weekly rentals of $320 for houses and $250 for apartments. Melbourne’s median house rents are now 36 per cent lower than Sydney’s and apartment rents 29 per cent lower.

The most expensive house reported sold this week was a renovated three-bedroom weatherboard at 6 Clayton Street in Balmain, which sold at auction for $1,605,000 through Cobden & Hayson.

The dearest apartment was a two-bedroom unit with harbour views at 1703/180 Ocean Street, Edgecliff. It sold at auction for $1,625,000 through Bradfield & Prichard.

Story by Dr Andrew Wilson www.domain.com.au

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Westpac has become the first major bank to predict a rate cut instead of a rate rise over the next year.

The Reserve Bank will cut the interest rate four times in 2012 to avoid hurting an economy that is already showing signs of contraction, Westpac said today.

‘‘While the catalyst for the first rate cut is likely to come from offshore we do not expect it to be a one off,’’ said Westpac chief economist Bill Evans. ‘‘Interest rates are too high in Australia given the state of the non-mining sectors of the domestic economy and a downward adjustment is required to avert a damaging round of contraction.

‘‘We now expect a sequence of rate cuts beginning with 25 basis points in December 2011 and through 2012 totalling 100 basis points prior to a period of steady rates in 2013.

‘‘This rate adjustment is likely to take a similar form to previous easing cycles,’’ said Dr Evans.

The comments put pressure on the dollar, which fell about half a US cent immediately after the announcement to $US1.0690

Chances of a rate cut rose at the beginning of the week, after concerns about the European sovereign debt crisis kicked into high gear. Global traders, worried about another credit crunch, began pricing in the RBA cutting official rates in Australia.

‘‘We are now of the view that the direction of market pricing is probably correct and the next rate move in Australia will be down rather than up,’’ said Dr Evans.

Currently, the credit markets tip a nearly a one-in-three chance of a rate cut when the RBA meets in August, while the outlook over 12 months suggest the interest rate will fall from 4.75 per cent to 4.25 per cent, according to Credit Suisse.

In addition to the European credit woes, collapsing consumer confidence on display this week, contributed to the need for lower rates, Westpac said. “We do not expect to see a strong bounce-back in confidence in the immediate future,” said Dr Evans.

Yesterday, David Jones shocked the market by announcing a profit downgrade, as the traditional retail industry gets battered by weaker consumer spending and the rise of off-shore online competition.

Myer has also flagged lower profits.

Australian households’ desire to pay down debt will be an additional drag on economic growth, Westpac said.

“We believe the economy is also going through a structural deleveraging by the household sector that makes consumer demand more susceptible to weakness,” said Dr Evans.

“Whilst deleveraging is probably a long term desirable development for the economy its short term impact on activity and employment continues to be a significant drag. We have already seen the household savings rate rise to 10 per cent, significantly undermining consumer demand,” said Dr Evans.

Continued falls on global markets as well as softening local house prices will likely impact consumer’s thinking about spending further, Westpac said.

‘‘Global financial turmoil will be reviving unpleasant memories of the 2008 financial crisis,’’ said Dr Evans. ‘‘Our consumer survey also shows households are becoming progressively more nervous about prospects for house prices.’’

Homes prices have dropped 2.7 per cent in the first five months, according to RP Data.

The Westpac-Melbourne Institute Consumer House Price Expectations Index, released today, showed more pessimism about the direction of home prices in the coming year, matching similar results from a National Australia Bank real estate survey released yesterday.

‘‘Housing is the major component of household wealth,’’ Dr Evans said. ‘‘Fears about falling wealth are likely to spur further increases in the savings rate.

‘‘That will further undermine consumer spending with a more significant bottom line impact on spending growth due to the weaker income backdrop.’’

Story by Chris Zappone www.domain.com.au

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