Subject: Big, fat juicy frogs!!!

Last weekend was a four day holiday, for the King’s birthday but I can’t quite get a handle on who this king is and what he does.
On Saturday Lois and I went to Koh Keh with Pha, a driver and Channy. Koh keh is temple complex about 100kms from Siem Reap. We passed Channy’s house on the way and the plan was to pick up Channy and his sister. But when we got to Channy’s house his grandfather wanted to come as well as two of his cousins. I have so much respect for his grandfather who was a soldier with the government forces during the Khmer Rouge years and spent 4 years hiding in the mountains. He is now 78 and had on his safari suit for the trip.
While we were walking around the main temple ( which was pretty impressive, 7 storeys high in a pyramid shape) he began to tell about a legend surrounding the temple. Pha translated for us. He had books containing all these ancient legends but said he had to bury them during the war as he would have been shot instantly if he was found with books. Out of all his books only one survived being buried in the earth.

Channy’s sister had brought a picnic for us, they’d killed a chook  and we had it wrapped in banana flowers with rice.
When we got back to Channy’s house his mother insisted we stay for dinner. His grandfather gave us little impromptu concert on his hand made string instrument. The food his sister and mother cooked for us was absolutely delicious except for the frogs. She’d bought 2 kilos of frogs for us at the market. They were a real delicacy for them. We first saw them lying in a dish with their heads cut off and gutted. His sister heated oil in a wok and then laid them one by one in the oil and fried them. Oh my!!!! I wish I could have captured the look on Lois’ face as she gingerly nibbled on the offered leg. I actually didn’t mind the taste, rather like chicken but I still have  the image of their big slimy bodies lying in the dish. But we survived!!!!

 
When I got home I had a call from Kerry she was in absolute despair. She and kemsour were taking a group of potential supporters on a tour of the slum area behind the hospital. They went into an area they had not yet been into and they came upon a little funeral for a 5 yr old girl who had died that morning of food poisoning. The little body was lying in the house under a towel. Two men were outside building a coffin. The single mother had no money and couldn’t afford a cremation so they were having to bury her  until they could afford the cremation.
Both Kerry and kemsour were devastated by the abject poverty in this little pocket of about 30 families. Where does it end????
The government does nothing to help these people. How much more can New Hope do? How long is a piece of string??? Where do you draw the line??? I could hear the fatigue in Kerry’s voice. I’m at a loss myself. I know most large organisations follow the adage "don’t give a man a fish but teach him how to fish. Which is all well and good but do you leave these people to starve to death and die of disease while you teach them how to make a fishing rod. And then they catch a fish out of the stinking polluted water and die of salmonella???
It is so easy to just sink into despair.
I met with the lawyer (Cham Rouern) from Phnom Penh on Thursday. He was quite impressive. We went out to visit Vannak that afternoon. He left me sitting in the garden in the midst of prisoners while he went to get the court papers. I had Makara with me so he was able to translate for me. I talked with two lovely young women. They both were 21 and had one year old sons. One of them told me while she’d been in there her mother, father and brother had died. her sister was also in jail. They both had 3 months to go. I am always hesitant to ask what they did to get here but I’m always curious. Probably stole a loaf of bread and couldn’t pay corruption to the police.
Vannak looked a little better this time. The Cham Rouern questioned him quite toughly, he didn’t pull any punches. The court papers contain the girl’s birth certificate which shows she is only 14yo. If he cannot prove that this is a false document Vannak faces an automatic sentence of 7-15years for having sex with a minor. It doesn’t matter how consensual it was or how many boys the girl had already been with or that Vannak was only 17. If Cham Rouern can’t prove the document to be false he will plead for leniency on the grounds of Vannak’s poverty and he is the only son. Cheryl had given me $5 to give to him to buy extra food. The guards take 10% but he did say the other prisoners don’t take it. Like most third world jails families provide the extra food and sleeping mats and blankets. I watched several families arriving with blankets as it’s getting quite cold in the mornings. There are also several organisations looking after prisoners welfare. The inmates on the outside of the razor wire have paid extra money for the privilege.
When we left the jail it was late afternoon and the sun was a huge red ball in the sky. We rode back into town through the rice paddies with water buffalo wallowing in the channels at the side of the road. It was really quite stunning. I needed a drink so I got Makara to drop me near the bars. I got off on this side of the river so he didn’t have to go through all the traffic. I started to walk across the bridge and noticed he hadn’t moved. I walked back to him and asked if there was something wrong with the moto but he said he wanted to make sure I got across the bridge safely. How sweet is that???
Lois leaves this morning. She taught my class ‘All out of Love" and "Country Road ". They loved it. They gave an impromptu concert to a tour group visiting the school. They were incredible, so confident. Syda had found a pair of ladies sunglasses which he wore. He’s quite dark and looked like Stevie Wonder. Kerry and I both had tears in our eyes. We were both remembering the poverty these boys come from and how far they have come. I am so very proud of them. They bring me such joy.
We were faced with two abandoned children this week. Their mother and father had gone to Thailand to work and left them with a neighbour. They had sent no money for them, the neighbour was in hospital and unable to continue caring for them. The girl was twelve and her baby brother, even though he looked only 9 months old, was in fact 15 months old. He was really unwell so we took them to the hospital and they have both been kept there for a couple of weeks which gives us time to try to find them a home. Otherwise they would  join the group of homeless children wandering the streets begging and scrounging in garbage for food.
It’s seems to be an endless round of weddings at the moment. Khmers do weddings in a big way!!!!
Today is Channy’s birthday. It turns out he is only 17 not 19. Who knows. Not many children get a birth certificate when they are born. They get them much later and by then parents forget when they were born. Often when you ask how old someone is they say "19, I think!" They can be out by up to three years. It doesn’t matter as they don’t have ages as milestones. You can be 25 and still doing grade 12. Birthdays aren’t big either but I am going to get Channy a cake. Khmers love cake and they are always lurid colours covered in icing and cream.
It’s getting quite cold in the mornings. I don’t like this. You see tuk tuk drivers and moto riders in parkas and gloves. I might have to buy a cardigan.
Lots of Love,
Robyn

CUP Day punters could have an extra reason to cheer today, with the odds strongly in favour of the Reserve Bank keeping interest rates on hold for a sixth consecutive month.

But any sigh of relief from borrowers could be short-lived, with some pundits predicting that the RBA will still send rates north by Christmas. And analysts are divided over whether Australia’s big banks will be forced to raise rates independently if the RBA chooses to keep its powder dry today.

Nomura’s Victor German said it was clear banks wanted to raise rates, but, from a political point of view, it would now be "very difficult".

He named Commonwealth as the bank most likely to go it alone, but said the chance of an independent rise was "diminishing" with the new Senate inquiry into banking competition.

Southern Cross Equities analyst TS Lim agreed that political pressure made it tougher for banks to raise rates but said increasing funding pressures meant banks were likely to act anyway.

"Once CBA does it the rest will follow," he said.

Futures market betting on the likelihood of an official rise has plummeted in the past week after benign inflation data dampened expectations that the RBA would lift the cash rate to 4.75 per cent.

Market odds last night reflected just 26 per cent chance of a rate hike today, despite new data revealing an uptick in price pressure in October.

Commonwealth Bank chief economist Michael Blythe said a rates pause today would be "probably only a temporary reprieve".

He said economic data in the next month – including critical growth, job and capital spending indicators – could convince the RBA to hike in December.

The TD Securities-Melbourne Institute monthly inflation gauge showed that on an underlying or "trimmed mean" basis – a measure used by the RBA – inflation rose by 0.2 per cent after flat results in August and September.

On a yearly basis, inflation grew at 3.1 per cent – outside the RBA’s target range of 2 to 3 per cent.

Pushing the gauge higher were price rises for car fuel, fruit and vegetables, and insurance services.

Story by Rachel Hewitt – with Peter Taylor www.heraldsun.com.au

As mentioned in yesterday’s post I am busy helping out at New Hope in Cambodia and thought you may want to read this inspiring update from Robyn –

Subject: The wheels of justice turn slowly, if at all.

          On Sunday I went to have lunch with one of my student’s family. Kosal is an extremely bright young man and has a scholarship to study at a German school in Siem reap. His family moved from their province down near Phnom Penh so he could attend the school. His house was one room in a long wooden building which looked like an old row of stables. Stagnant water was lying under the floor and under the outside cooking area. But the room was absolutely immaculate. On one table was a huge pile of books, belonging to his father and in one corner was a little old wooden desk for Kosal to study. He has a little brother who was found at the hospital by his father. The baby’s mother didn’t want him. He only weighed 1.3kgs. Kosal says, "he’s not really my brother but we love him" and love him they do. He’s the happiest healthiest little fellow. His mother had gone to such trouble for my lunch. We had pork and vegetables and I did recognise a lump of liver in my mouth. There was also fish soup which I’m sure also had some pig’s intestines in it. I had to eat it all, there was no way I could be impolite to these beautiful people. Kosal’s father is a security guard and also drives an ambulance. he’d been called out at 3am that night but when he got the patient to the hospital at 5am the doctor said he was late so he didn’t get paid. Kosal was so angry. So maybe this intelligent young man when educated may fight to do something about the injustices in his country. That is why education is so vital. Kosal is in Year 11 and I assured his parents that i would do everything in my power to get Kosal to university. So in 18 months time watch out when I start Kosal’s university fund.

Talking about injustice. This is a typical case of the daily injustice occurring all over Cambodia. We did a story on a family today who has just moved into Mondul Bei. They used to own a house and land near the Vietnam border. A developer wanted the land to grow sugar cane so she arranged to have all the houses on the land burnt down which includes all the paperwork to prove ownership. This courageous farmer stood up for his family but was arrested and spent two years in jail. He has just been released through the efforts of a Human Rights NGO. But he has lost everything and they have rented a house (hovel) in Mondul Bei. There are three children and they earn a little money by collecting rubbish. This is a very good hardworking family and the father is looking for work. I was going to make a plea for sponsorship of this family but once I told their story to a group of volunteers one of them immediately said she would sponsor them.
This happens all over Cambodia, Good hardworking families losing their land for sugar cane plantations to serve the needs of China, Vietnam and Thailand. And in the cities their houses are burnt down to make way for apartments or office blocks. (Attached photo)
Lois arrived this week. I came back to the guesthouse one lunchtime and here was Lois reading Romeo and Juliet to one of the tuk tuk drivers. he had an exam at the university in English Literature and Lois was coaching him. Why does a tuk tuk driver in Cambodia study Romeo and Juliet???? Beats me!!! But we saw him later that night and he was so happy with his exam. I think Lois got a bigger reward from that than selling a million dollar property.
Nothing is easy in Cambodia!! I met with Kemsour’s friend who is the lawyer. We took Vannak’s mother and sister with us. Kemsour and his friend began talking about the case and then kemsour starts shaking his head and saying,""Oh my God"!! Turns out that this lawyer’s uncle is representing the girl’s family and he can’t help us. The look of despair on Vannak’s mother’s face was heartbreaking.
So back to Plan B. I went back to the young law graduate, Bunra, who is working for an Australian NGO, Life Beyond Bars, which is run by the same young Australian as This Life Cambodia, Billy Gorter. This extremely bright young man agreed to come out to the prison with me to interview Vannak. We went out that afternoon. You often see in movies a scene when a prisoner reaches through the bars to grab someone’s hand. When Vannak reached through the bars and clutched my hands I thought my heart would break. He talked and talked. I think it was so important for him to tell his side of the story. What came out this time was that the girl went to his mother’s house after he was locked up and then came out to visit him in jail and told him she loved him.
Another twist to the story, she is HIV but Vannak has been tested twice in jail and is negative. The $1 000 was actually only corruption money to get him out on bail so we are going through the legal process. The law graduate has put me in touch with a lawyer in Phnom Penh who has agreed to represent Vannak. He will put in a request to delay the trial while he gathers evidence. He will charge a fee of $600. he is coming up to Siem reap to see me next week.
What price a young man’s life!!!
No one really knows the girl’s exact age. If she was under 16 at the time of the offence Vannak will have to do about two years in jail. Automatic sentence if the girl is underage but if she was over 16 he could walk free!!! Bunra explained to me that in Cambodia the girl is always the victim. It was really funny coming back in the car as Bunra was trying to explain to me that the first time wasn’t exactly successful and Vannak didn’t quite do the deed. Too much information!!!!!
Each time I visit the jail and see the other prisoners who always have a ready smile I wonder how many are actually innocent victims of a corrupt legal system. There were a lot of wives and children talking to husbands through the bars. Vannak didn’t look that well this time, really dark circles under his eyes and he seemed even thinner.
I am so anxious that I might make a wrong decision or trust the wrong person. If Vannak has to serve a sentence Billy is going to try to have him included in his vocational training project he is setting up for young men in the prison.
It’s lovely to have Lois here. We have a long weekend this weekend. I cannot believe the public holidays we have in Cambodia. This is the King’s birthday. No one seems to know much about the king. But everyone knows about Hun Sen the PM. I see he stood up to Ban Ki Moon and is thinking of expelling the UN ambassador. Now that will be a great move for the people. Sound like Myanmar and China????
We had a lovely dinner last night, two margaritas and a fish curry each for the grand sum of $6 per head!!!! How I love not having ever to go into a supermarket or lift a broom or vacuum cleaner!!! On Sunday we have booked a day of indulgence at Raffles, a complete body scrub and massage, full use of the pool, gym,spa and sauna. There has to be some luxury.
Tomorrow we are visiting a temple complex about 100 kms north of here. Channy and his sister are coming with us. Lois has brought a CD full of crappy love songs which they will love. She is going to teach some of them to my class, the young Khmers love to sing sad love songs all about broken hearts. We often talk about broken hearts in my class. The absolute joy I get from teaching these amazing young people is often overwhelming. How lucky am I to have discovered this passion.
So much happens here on a daily basis that I could just keep writing and writing but I don’t want to bore you too much. If you get this far in reading my news you’ve done well.
Bouv Konthar is showing little signs of rejoining her world. I continue to visit her everyday and take a fruit shake out to her. She loves them. I’m going to buy her some new clothes and a radio this weekend. Also some new clothes for the beautiful, kind woman who is caring for her.
Lots of Love,
Robyn

Hello one and all – I am currently in Siem Reap at New Hope Cambodia http://www.newhopecambodia.com/index.php .

This is one of my passions and I try to visit once a year to offer what help and assistance I can.  It is truly inspiring to be amongst this amazing group of people, from the organisers to the volunteers to the community at large.

Some of you may know that I am an avid supporter of this group and I encourage you all to visit their site and see for yourself the wonderful work that is being done.

I’ll be posting more information and photos in the days to come.

IT is only a matter of time before interest rates rise again, with board minutes from the Reserve Bank of Australia (RBA) revealing that it "could not wait indefinitely" due to rising inflationary pressures.

Minutes from the latest RBA monetary policy board meeting, taken on October 5 and released on Tuesday, say that while the overall global outlook was broadly unchanged since the RBA board’s previous meeting, interest rates would need to rise "at some point".

A gradual tightening in resource utilisation meant that inflationary pressures would strengthen, the minutes say.

The minutes reveal that the decision to keep the cash rate on hold at 4.5 per cent, taken at the October 5 meeting, was finely balanced.

"While the board recognised that it could not wait indefinitely to see whether risks materialised, members judged that they had the flexibility to do so on this occasion," the minutes said.

Based on the medium-term inflation outlook, a case could be made to increase the cash rate at the October meeting as developments had been broadly consistent with central forecasts, the minutes said.

But members decided to leave the cash rate unchanged after accepting that the economy was expected to continue growing at trend in the near term, credit growth had softened and the rise in the exchange rate would effectively be "tightening financial conditions at the margin".

Board members also said it was "still possible" that downside risks to global growth could materialise.

"Members felt these arguments were finely balanced," the minutes said.

Overall, they concluded that it would be "appropriate to hold the cash rate steady for the time being," until evaluating further information at the next meeting, on Melbourne Cup Day, November 2.

The board noted that, despite the release of unemployment figures showing a 5.1 per cent unemployment rate in August, there had been a relatively limited amount of economic data released over the past month.

After rising to around record high levels in the June quarter, Australia’s terms of trade were estimated to have increased further in the September quarter but were then expected to decline gradually.

The minutes also noted that a slowdown in the pace of household borrowing had been accompanied by a cooling in the established housing market, and that the borrowing slowdown was a "welcome development".

There had been little new information on price and wage inflation, with consumer price index figures due out later in the month.

Good rainfall had led to conditions in the farm sector improving significantly.

In Europe, Ireland had been a focus of concern in financial markets and members noted that periods of "acute stress" in Europe were "likely to recur".

Meanwhile, business investment was expected to strengthen over the next few years and offset a scaling back in public investment.

Prospects for growth in Asia remained "solid" despite slowing from earlier in the year as the prices of many of Australia’s export commodities remained at high levels, board members said.

"Domestically, members noted that the economy appeared to be evolving broadly in line with the bank’s expectations," the minutes said.

The outlook remained for public spending to slow but for private demand to pick up, particularly in business spending.

Story by Kim Christian www.thesatellite.com.au

The auction market is still performing strongly but vendors of higher-end properties are opting for private sales instead of risking their home at auction, experts warn.

Real Estate Institute of Australia president David Airey warns that although the Melbourne market recorded a 68% clearance rate, the top-end is still struggling with discounts a common occurrence.

"The average price was only about $800,000. People at the top end have decided the best way for them to sell is through private sales, rather than risking through auctions. That’s the same across Australia, where the lower end is moving, but the higher end is more average."

Airey points to the sheer number of pass-ins occurring in Melbourne. The REIV figures suggest 325 properties were passed in, and Airey says more of these would have been likely in the top-end areas.

Christopher also believes the market in the top-end properties is moving slowly.

"It’s a very difficult market to read. I’d say the top end is quite patch. You could get some very good sales, but there are still records of properties that aren’t performing particularly well at all. It’s definitely a patchy market."

However, other markets have remained strong, these experts say. Melbourne managed record a 68% clearance rate out of 1,031 auctions, according to the REIV, with chief executive Enzo Raimondo pointing out that rate hasn’t changed during the past eight weeks.

"In light of the very high number of auctions this weekend the clearance rate of 68 that was achieved is a very healthy result and demonstrates that underlying demand is good," he said.

Some analysts predicted prices might drop due to the sheer number of listings. Auctions have backed up over the past few weeks due to the AFL Grand Final and the subsequent replay, while the upcoming Cup Weekend has brought forward some sales.

"Including this weekend’s activity, the REIV has seen average weekly auction listings increase by around 30% compared to winter; interestingly, the clearance rate for spring has not changed substantially, with around 68% of homes selling during the first eight weeks of spring."

Airey agrees, saying the result was "a particularly solid one".

But the rest of the country hasn’t performed so well. Christopher says Sydney’s result in the mid-50s reveals neither buyers nor vendors have negotiating control.

"That result represents a market equilibrium, where neither buyers nor sellers have control. However, that result does indicate that there could still be price rises occurring there."

"Outside Sydney and Melbourne, and putting Canberra aside, it’s a pretty weak market out there. I would argue prices are falling in southeast Queensland, and Adelaide is looking very slow as well."

Christopher also points out activity in the Northern Territory, which he says is becoming scarily bubble-like. "Darwin is a market that is looking very scary at the moment and very bubbly. When it turns, it’s going to be a steep ride down."

According to Australian Property Monitors, Sydney recorded a 56% clearance rate out of 501 auctions. Total sales came to $149 million.

Adelaide recorded a 63% clearance rate out of the 48 auctions on the market, with total sales coming to $9.9 million, while Brisbane recorded a rate of 30.4%, with 57 total auctions coming to a sales total of $4.8 million.

Story by Patrick Stafford www.smartcompany.com.au

ALMOST two out of three consumers expect a rise in house prices during the next 12 months, new data suggests.

But that’s fewer than the 80 per cent who thought likewise earlier in 2010.

The Westpac-Melbourne Institute consumer house price index dropped to 51.1 in October, compared to its previous reading of 58.8 in July, and well below a its January peak of 80.3.

Westpac senior economist Matthew Hassan said 63 per cent of consumers expect house prices to rise during the next year, down from 70 per cent in July and a peak of 84.4 per cent in both April and January.

"Consumers have continued to pare back their expectations for house prices despite interest rates staying on hold since May," Mr Hassan said, releasing the data on Friday.

That may be in response to recent softer sale results.

The spread of expectations in October points to an average expected price rise of 2.6 per cent during the next 12 months, down from 3.6 per cent in July and 5.7 per cent in April.

"The fact that most still expect prices to rise suggests that those looking to sell properties will be more inclined to postpone selling until a later date than accept materially lower price offers now," Mr Hassan said.

Source: www.gympietimes.com.au

AUSTRALIAN capital city house price rises are set to remain weak, a survey suggests.

The September quarter survey conducted by National Australia Bank (NAB) found expected annual price rises averaged just 1.5 per cent.

That’s the same as in the June quarter survey, but well down from the 6.0 per cent average rise expected in the March quarter survey, the first in the new series.

Canberra was expected to post the strongest rise of 5.0 per cent, while Brisbane was at the back of the pack, with an anticipated increase of only 0.1 per cent.

Elsewhere, expected rises were 3.3 per cent in Adelaide, 2.7 per cent in Sydney, 1.6 per cent in Perth and 1.3 per cent in Melbourne.

The survey found properties selling for less than $500,000 were expected to post the biggest price gains, while the those going for more than $2,000,000 were expected to rise by the least.

Foreign buyers were expected to account for five per cent of existing property sales and seven per cent of purchases of new developments, down from nine per cent in both categories in the June quarter.

For existing residential properties, access to credit and rising interest rates were about equal at the top of the list of constraints on demand, although the existing level of prices and uncertainty about employment security were also seen as significant.

For new developments, tight credit was the most important constraint, but rising interest rates and housing affordability were also significant constraints.

Even so, the survey found residential property was the strongest-performing category, classed as "good".

All other property categories were seen as only "fair", with infrastructure and offices the best of the rest, and hotels, retail and industrial property the weakest.

The survey also found residential rents were expected to rise by "around 2.5 per cent" over the coming year on average across Australia.

Tighter rental markets in Sydney and Melbourne meant rent rises were expected to be larger in NSW and Victoria, at 3.3 per cent in both states.

In Western Australia and Queensland, rises were expected to be weaker, at 1.4 per cent in WA and and 1.7 per cent in Queensland.

The survey respondents represent a range of players in the commercial and residential real estate market – real estate agents and managers (48 per cent), property developers (18 per cent), owners and investors (15 per cent), asset and fund managers (12 per cent) and valuers (7 per cent).

Story Garry Shilson-Josling, AAP Economist

The central bank says it’s aware of the difficulties property developers face obtaining credit, but it has questioned whether the sector is overly-reliant on debt.

Reserve Bank of Australia (RBA) Deputy Governor Ric Battellino expects an improvement in the economy over the next few years to be reflected in the commercial property market.

In a speech to the Property Council of Australia in Brisbane on Friday, Dr Battellino said it was difficult not to conclude that the financing of the property sector became "over-extended" during the boom years, and that a period of adjustment was "largely unavoidable".

"In saying this, I don’t want to downplay the difficulties that some firms are now experiencing as that adjustment takes place, or the impact it is having on property development," Dr Battellino said.

"But cycles like the one we are going through seem to be endemic to the property sector and raise the question of whether, over the longer term, the financing model of the sector should shift towards more equity and less debt."

However, he said the "adjustment process" had been under way for some time and substantial progress had been made.

He said a period of increasing arrears on property loans may be coming to an end, after equity raisings had made an important contribution to reduced gearing levels.

As well, the expected improvement in the economy over the next couple of years would be "reflected in the commercial property market", he said.

"There are already some signs of this," Dr Battellino said.

"That in turn should boost lender’s willingness to make loans to the sector, though I don’t think it would be in anybody’s interest to return to the free-flowing credit of a few years ago."

He said the property sector was vulnerable to changes in the availability of credit because it operates with a relatively high level of gearing and low holdings of cash.

Dr Battellino added that he was satisfied with the current moderate growth in household credit after an annual increase of seven per cent.

The moderate pickup was mostly due to housing loans, while other forms of household debt, such as credit card debt, margin loans and personal loans had been "relatively flat".

"All this is consistent with households taking a more cautious approach to their finances," he said.

"For households, therefore, the current picture is one where borrowing for housing is broadly growing in line with income, house prices are stable and there is little appetite for other forms of debt," he said.

"From the Reserve Bank’s perspective, this seems to be a satisfactory state of affairs."

He also said that small businesses currently had better access to credit than the large business sector.

Over the next few years, the RBA expects economic growth to pick up from its current rate of 3.75 per cent to closer to 4 per cent.

It was then likely that underlying inflation would pick up from the current 2.75 per cent to be around three per cent by the first half of 2012, Dr Battellino said.

"In the Australian economy, growth is around trend and underlying inflation is in the target range," Dr Battellino said.

He added that keeping growth around trend and inflation within the target range would be challenging given the economy was approaching full capacity and the resource boom was re-emerging.

"As noted in the statement issued after the board meeting earlier this week, if economic conditions evolve as currently expected, it will be likely that higher interest rates will be required at some point," he said.

Dr Battellino said that global economic growth, and Asian growth, was returning to around trend.

Story by Kim Christian Ipswich Advertiser

It’s now easier to get a job, but owning your own home is expected to become much more difficult.

As the nation moves into a period of higher house prices, rising interest rates and falling unemployment, economic commentators are pointing to declining housing affordability over the next few years.

Housing surveys released this week show residential property prices could climb by as much as 20 per cent over the next three years in Sydney, Perth and Adelaide, while other capitals are anticipating more modest growth.

At the same time, some economists predict unemployment could fall as low as four per cent and variable interest rates could soar past nine per cent as the resources boom kicks in.

BIS Shrapnel managing director Rob Mellor says steady residential property growth is expected over the next three years thanks to a strong economy, firm employment and income growth.

"The big risk is affordability," Mr Mellor said.

"That’s the part of the equation that certainly suggests over the next three years affordability will become a major issue."

While tight housing supply and strong migration were driving growth in Sydney, the imminent resources boom was set to keep dwelling prices firm in Perth, Mr Mellor said during the launch this week of the BIS Shrapnel/QBE Housing Outlook for 2010-13.

"Affordability will deteriorate as we go to a higher interest rate environment by 2013," he said.

"It will deteriorate back to the sort of poor affordability that we had during 2008, when interest rates got to 9.5 per cent.

"So it’s certainly a negative."

In terms of mortgage repayments as a percentage of income, affordability remains a serious issue.

"It will be a critical issue over a three year period," Mr Mellor said.

"We do expect interest rates to rise in 2011/12.

"They’ll probably be back at around 8.3 per cent or so by June 2012 and more like 9.1 per cent by June 2013."

Almost 50,000 full time jobs were created last month, keeping Australia’s unemployment rate at 5.1 per cent for September, the latest Australian Bureau of Statistics (ABS) data shows.

Meanwhile, National Australia Bank is less bullish in its housing forecasts, saying annual price rises would average just 1.5 per cent.

The bank expects Canberra prices to rise 5.0 per cent, Adelaide to post a 3.3 per cent increase, just 2.7 per cent in Sydney, while Perth should grow by 1.6 per cent.

After record growth, Melbourne is expected to record an increase of 1.3 per cent and Brisbane should remain flat.

The survey found properties selling for less than $500,000 were expected to post the biggest price gains.

While Australia is nowhere near the dark days of 2003 when many mortgage holders had to part with a large chunk of their weekly wage, economists say we are just six interest rate rises away from that critical point.

The Reserve Bank of Australia (RBA) has lifted the cash rate six times in the past year, bringing the cash rate to 4.5 per cent in May.

Commonwealth Bank chief economist Michael Blythe said household incomes were still constrained, while interest rates and house prices were tipped to rise.

"So there’s a whole set of factors that have acted to reduce housing affordability from a cash flow perspective," Mr Blythe said.

However, he said there was a "way to go" until housing affordability reached the crisis point of 2003 when debt servicing ratios hit a peak while the cash rate sat around five per cent.

"We’re obviously a fair way from that point and there’s the sense that a drop in affordability has taken some of the steam out of the housing market," Mr Blythe said.

Home owners who bought just before the financial crisis in 2008 will remember the cash rate reaching 7.25 per cent.

He said first home buyers would slowly return to the market, simply because that demographic "requires a certain level of housing stock".

"We’ve had this period of rapid housing growth and that has generated a big demand for housing," he said.

© 2010 AAP
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Have you noticed the word eco has started to crop up in ads for houses? We’ve seen it on consumer products – just walk down the cleaning aisle and check out the hundreds of claims for biodegradable, environmentally friendly, green and renewable. And I couldn’t help but notice this week, that the word eco is cropping up more and more. It’s not a flood but it definitely looks like the beginning of a trickle. And that’s how streams usually start.

Of course, not all green claims apply to houses. For example, you wouldn’t expect to see a home being advertised as biodegradable. Although some tenants might be able to claim they are renting something that fits the bill because it is crumbling before their eyes.

I contacted the consumer affairs departments in a couple of states, as well as the Australian Competition and Consumer Commission to see if they had received any complaints about unsupported green claims on houses for sale or rent – but it seems if it’s happening, it’s not yet in big enough numbers to get noticed by those kinds of bodies.

Christopher Zinn, of consumer advocacy group Choice, says products on supermarket shelves are awash with green claims, so he wouldn’t be surprised to see it emerging in the housing market too.

"I can say my house is green or eco or anything," Zinn says. "Anyone can make [that claim] because there really is no measure or standard."

However, there is a ceiling to green claims on houses – informed buyers. It’s not quite like buying a spray cleaner, where you dash wildly through the supermarket, potentially with a trolley crammed with a couple of toddlers whose little windmill arms try to grab at all manner of colourful products as you whiz past. There’s little time or head space to give much thought to the price of the thing you end up buying, let alone the veracity of its environmental claims. But with a residential property you take a lot more time to decide – usually – have more time to investigate claims the home is somehow green or kind on the environment. And then there are building inspections that can give you some professional insight too.

There are always going to be agents who try to put a green spin on things though. Like the guy who told me the other day without a quiver in his voice or a shift in tone that it was great the unit he was selling faced west because it got lots of afternoon sun. Um yes, the type that hits you in the eyes, blinds you, and turns your place into an oven.

It begs the question. What makes a green house? Is it green if it meets the newish five star energy minimum that many new houses and major renovations must be built to? Does whacking on a couple of solar panels, or a 2000-litre water tank make it green? How about a couple of draught stoppers? Or building a whopping big house that is filled with downlights and nary a ceiling fan in sight. It might face north (a good thing) but it doesn’t pay attention to too many other details that could make it tread more lightly on the environment. Should there be some minimum standard that properties have to meet to use the label "eco"?

As flagged a few weeks ago, the Council of Australian Governments is proposing a national energy ratings scheme from next year, which could look something like the one already in place in the ACT. If the scheme is introduced, that could help shine some more light on whether houses can really be called eco, or just plain old energy and water guzzlers.

As Christopher Zinn says: "Wherever you see the word eco or green or natural you need to get out a very accurate ruler. It could mean anything and nothing."

Story by Carolyn Boyd, a property journalist and keen follower of Australia’s housing market.

Source: www.domain.com.au

Sydney has been awarded the dubious distinctions of being the city where mortgages account for the highest proportion of income in the world, and with the highest proportion of mortgage arrears in Australia.

Sydneysiders spend an average of three-quarters of their monthly income on property repayments, according to a survey by realestate.com.au, with the average house price at $626,444 and the average monthly repayment around $4,123. In contrast, the average repayment in London is less than two-thirds of monthly income, and less than half in New York.

A separate survey by Moody’s has also revealed that Sydney also has Australia’s highest level of mortgage delinquencies, with the Fairfield-Liverpool region recording a delinquency rate of 2.77%, and accounts for 4.24% of all arrears in Australia. Even so, Moody’s Arthur Karabatsos highlighted that, overall, Australia has a low level of arrears compared to similar economies.

The NSW Government recently introduced the Home Builders Bonus to make it easier for families, couples, investors and first home buyers to get the most our of the property market.

Some key parts as announced by the NSW Government are as follows:

Purchasers pay no stamp duty on new dwellings purchased off-the-plan before construction starts.

If the home is under construction or newly built, purchasers can qualify for a 25% reduction in stamp duty, for homes worth less than $600,000.

The purchase of vacant land worth up to $400,000 could also be eligible for zero stamp duty under the Home Builders Bonus;

First home buyers are eligible for the Home Builders Bonus as well as the $7000 NSW Government-funded First Home Owner Grant;

Those aged over 65 will not pay any stamp duty when they sell their primary residence to purchase a newly-constructed dwelling worth up to $600,000 – regardless of whether construction has commenced or not.

For further information go to NSW Government Home Builders Bonus

Investors in the real estate investment trust (REIT) sector are preparing for a bumpy last quarter of calendar 2010 caused by rising interest rates and the next round of office and retail property valuations.

Property trust analysts have predicted another round of consolidation among the trusts is not far away as predators look to take advantage of the continued low share prices for many of the listed trusts.

Deutsche Bank’s Matthew Bertram has earmarked Mirvac’s residential business as a prime target for any consolidation within the REIT sector.

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”In our view, Mirvac’s residential brand would be saleable, if REITs were to enter a consolidation phase,” he said.

”If Mirvac’s return on capital remains below its weighted average cost of capital in the medium term, on our estimates a sale of the residential division would be accretive to funds from operations, reduce debt and potentially facilitate a return of capital to shareholders.”

Other deals being worked on are the sale or internalisation of the management rights of the ING Group’s listed trusts, while Stockland is closer to securing the retirement group Aevum.

Investors are debating whether Stockland will launch a bid for FKP’s retirement assets.

Reflecting the fluctuating sentiment among REIT investors was the S&P/ASX 300 A-REIT Accumulation Index, which underperformed the broader equity market by 5.5 per cent, returning a negative 0.9 per cent for September. That compared with August, when the same index outperformed the broader market by 3.5 per cent, returning 3.5 per cent over the month.

The managing director of Maxim Asset Management, Winston Sammut, said over the past year to 18 months, Australian REITs had been concentrating on improving their balance sheets as well as refinancing their debt facilities.

Where possible, a number have been actively disposing of ”non-core assets”. As a result, most of the A-REITs have moved back to basics, becoming the traditional defensive asset class it should always have been.

Mr Sammut said that as a consequence of these changes, the longer-term outlook for A-REITs was positive.

”Over the short term, we expect the sector to trade around current levels before moving ahead as investors become more comfortable with the reformation of the A-REITs that has taken place over the last year or so,” Mr Sammut said.

He added the recently launched Maxim Income Fund benefited from the volatile financial markets, generating a return of 3.29 per cent from July 15 (the date of the last distribution) to September 30th.

Story by Carolyn Cummins COMMERCIAL PROPERTY EDITOR www.smh.com.au

India’s richest man, Mukesh Ambani, has moved into his new home — a 27-storey mansion worth $1 billion.

The enormous Mumbai palace has three helipads, a dance studio, a ball room, a 50-seat theatre and an underground car park for 160 cars, according to media reports.

The 37,000 square metre home is believed to be the world’s most expensive and took seven years to build.

Mr Ambani, 53, is a major shareholder at Reliance Industries — an oil, retail and biotechnology conglomerate.

Forbes magazine has ranked Mr Ambani the fourth-richest man in the world and values his net worth at $29 billion.

The tycoon’s mother, wife and three children will live with him inside the 173m tall monolith, alongside 600 staff members.

The building has been named Antila, after a mythical island, and has views over Mumbai and the Arabian Sea.

Shiny Varghese, an Indian design magazine editor, said Antilia was "obscenely lavish".

"But we are heading into the sort of culture where money is not a question when setting up a home," Mr Varghese told The Guardian.

But an associate of Mr Ambani told the newspaper there was nothing obscene about Antilia, and that the businessman had simply "built a house to his requirements".

"He can’t just walk into a cinema and watch a film like you or me," the unnamed associate said.

"So he has built a house to his requirements like anyone else would. It’s a question of convenience and requirements. It’s only a family home, just a big one.

"It’s just another home that someone is living in. It’s no big event."

Story from ninemsn staff reporters