The preliminary capital city dwelling value index result for December was -0.2% (s.a.) following an upwardly revised +0.4% rise in dwelling values in November (was +0.1%). Revised regional house values for November increased from +0.3% to +0.5%. Sydney housing has been the nation’s best performer with dwelling values up 0.4% in December and by 0.7% over the quarter (s.a.).

In the generally seasonally weak month of December, the preliminary RP Data-Rismark Home Value Index result for capital city dwelling values was -0.2 per cent (s.a.). Low sales volumes in December mean that this number will likely see a more significant revision than normal.

The November result from the RP Data-Rismark index for dwellings in capital cities has revised up from +0.1 per cent (s.a.) to +0.4 per cent (s.a.) based on additional sales information. This marks the largest month-on-month improvement in Australian home values since May 2010.

The RP Data-Rismark ‘rest-of-state’ index, which covers Australia’s regional markets, has also revised up in November from +0.3 per cent to +0.5 per cent (s.a.). This is the most significant increase in regional house values since November 2010.

Over the December quarter, Australia’s capital city home values declined by -0.5 per cent (s.a.).

RP Data’s director of research Tim Lawless, said, “The December quarter was the year’s smallest quarterly decline. According to our index, capital city home values fell by -1.5 per cent (s.a.) in the March quarter, and by a further -0.8 per cent (s.a.) in each of the June and September quarters. This rate of decline had decelerated to -0.5% by the final quarter of 2011.”

In 2011, Australian capital city dwelling values experienced a capital loss of about three and a half per cent. Regional house values fared a little better, correcting by around three per cent. This compared to the 14-15 per cent decline in Australian shares. Adding in rents, the gross total return to Australian property investors was slightly less than one per cent over 2011.

Rismark’s managing director Ben Skilbeck said, “The month of December is characterised by a significant lull in activity and the preliminary index results have likely been influenced by some more volatile Melbourne and Perth estimates. We expect to get better clarity on the monthly movements as more information is reported.”

“Sydney currently has the largest volume of reported sales in December. In seasonally-adjusted terms, Sydney dwelling values rose by 0.4 per cent in the month of December. In the December quarter, Sydney dwelling values are up a total of 0.7 per cent (s.a.)” Mr Skilbeck said.

RP Data’s Tim Lawless observed that rental markets continued to strengthen in December.

“Weekly rents across the capital cities were up 1.0 per cent over the December quarter and are now 6.3 per cent higher than at the same time last year.”

“These higher rental rates combined with the slide in property values have improved investors’ yields. The average capital city dwelling is now offering a gross rental return of 4.6 per cent after a consistent trend upwards since mid-2010 when the typical capital city dwelling was yielding just 4.1 per cent. Darwin and Canberra are the highest yielding locations for property investors while Hobart, Brisbane, and Sydney provide gross yields that are better than average,” Mr Lawless said.

On the outlook for the year ahead, Rismark’s Ben Skilbeck commented, “We expect that the RBA’s interest rate cuts in the final two months of 2011 will lend further momentum to housing activity as transaction volumes pick up over February and March after the seasonally slow months of December and January. If financial market pricing for substantial additional RBA rate cuts proves accurate, we could see a stronger-than-expected bounce-back in housing conditions.”

“Housing affordability in Australia has experienced a striking improvement in recent times. While disposable household incomes on a per household basis rose by five per cent over the year to September 2011, Australian dwelling values have declined by 3.4 per cent since September 2010. As a result of the RBA’s rate cuts borrowers can now get fixed- and variable-rate home loans as low as 5.9 per cent and 6.14 per cent. Rismark’s research shows that disposable incomes per household have risen about 15 per cent further than Australian dwelling values since the end of 2003. This helps account for the decline in Rismark’s national dwelling price-to-income ratio, which is as low as its been since 2003” Mr Skilbeck said.

RP Data’s Tim Lawless added, “While global uncertainty and a stagnant local labour market could weigh on the consumer’s mindset, we are nevertheless observing improvements in monthly housing finance commitments. RP Data’s leading indicators on average selling times and vendor discounts are also starting to look healthier. There is no doubt that additional interest rate relief in 2012 would afford a very welcome cushion to the housing market.”

The property market will be drawing a collective sigh of relief as the year comes to a close.

As we look back on how the market performed in 2011, we may well see an overall correction of up to 10 per cent – a significant drop for the property market but a fraction of the sharemarket correction of 2008.

As we gaze into the crystal ball and wonder what 2012 has in store for home owners and property investors, there are a few indicators that suggest we are entering calmer waters.

With Europe in crisis, the US economy anaemic and China cooling, interest rates are on the way down. Experts predict the Reserve Bank will cut rates on Tuesday by 25 basis points and there will be a further reduction of up to 100 basis points throughout 2012.

Falling interest rates instantly increase affordability and entice people back to the market. Buyers rushed back in 2001 and 2009 mainly due to falling interest rates. The main difference next year is that it is unlikely to come packaged with increased first home buyer incentives.

Property is a great Australian pastime and this continues to be the case.

Web statistics show that, although competition for property was soft in 2011, web browsing continues to be very high. Nielsen’s online analysis of real estate portals suggests more than 3 million Australians search for property each month. That means about 15 per cent of the population is actively looking at property at any onetime.

This activity flows on to the physical market, with many agents reporting high numbers at inspections for good quality homes. Despite the level of interest, many people believe that 2011 has not been the right time to buy.

This means first home buyers and investors have stayed out of the property market. The effect is increased demand for rental property and a lowering of supply. As a result, we are likely to see rental yields lift next year.

According to the Reserve Bank, household savings rates are at their highest levels since the mid-1980s. They have been moving up since the mid-2000s, reaching 10.5 per cent of disposable income in the June quarter.

Many borrowers have been making substantial excess principal repayments in recent years and this will increase their equity and cash flow positions.

For many people, myself included, money begins to burn a hole in our pockets. The people who have been saving and have job stability – which is 95 per cent of the population – will start to realise the sky is not falling and will begin to make a move.

All markets are cyclical and often the greatest period of growth comes directly after the biggest falls.

I think when we look back on 2012 in years to come these factors will likely result in a bounce in median values, and the market will be back to where it started before 2011 hit.

Mark Armstrong is an independent property analyst and creator of propertytycoon.com.au, Australia’s first online auction tipping competition.

Source: www.domain.com.au

Well here are the next five tips to help you go green without breaking the bank.

6. Green Kris Kringle

We’ve all heard of Kris Kringle – the holiday season group gift exchange game with a maximum limit on how much you can spend per gift ($5, $10, etc.). For Green Kris Kringle, instead of a monetary limit, have a material limit: only play the game with gifts you can find lying around the house or crafty gifts you can make with existing materials.

That boring old picture frame you have? Add some sparkly beads for a shimmery upgrade, and bring it as your gift to exchange. Green Kris Kringle is a great way to reuse things you’re no longer using and reduce some of the holiday-season material excess that can drain your green spirit.

And instead of wrapping your gifts in traditional Christmas paper, why not get creative? Old newspapers, pages from magazines, maps from your last holiday, scraps of nice fabric or leftover wallpaper can make a hip green wrapping alternative.

7. Experiment with homemade cleaners

Let’s face it, some of the eco-cleaning products at the store are expensive. Since you still have to clean, try making some cleaning supplies yourself from stuff that’s already in your kitchen. Some basic, natural, non-chemical cleaning elements include vinegar, baking soda and lemon juice.

With vinegar, mix with one part water to dilute, put in a spray bottle and test on a surface before applying it to bathrooms and kitchen countertops.

Baking soda can be used as a scrubber as well as a deodoriser.  To clean your saucepans like new, add some chopped lemons to water and simmer on the stove – it breaks down even the toughest baked on grime.

8. Reuse your bags

We all forget our reuseable grocery bags every once in a while. Luckily we know how to reuse the plastic bags when they start to accumulate (doggie bag, bin liner, storage bag, you name it). Yet all that effort and attention on plastic grocery bags leads us to forget about other types of plastic bags: the freezer bag and the sandwich bag.

Typically used for items like sandwiches or leftovers, these bags receive little wear and tear and can be washed, dried and reused again and again. Using what you already have is technically free, right?

9. On your bike

We all know it is fun to go out, but with driving, parking and inflated food and beverage prices, the night adds up fast. Try adding a green tinge to your evening and organize a bike riding night-out extravaganza with your friends – meet at a local restaurant or bar. You’re sure to have fun, not to mention save money and use less petrol.

10. Offset your emissions

If you would like to do a little more for the environment – consider offsetting the carbon footprint of your home,family or your business.  Carbon offsetting slows the effects of climate change and makes you feel super-fantastic about yourself and your impact on the world.  Check out the Yonderr website and work out what lifestyle or business fits you. The price of carbon at Yonderr is $12 a tonne – cheap at twice the price.  And OK, so this might cost you a little money but knowing that you’re making a positive contribution to the environment is priceless.

If you have any green tips we’d love to hear from you.

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Consider these tips when looking for property in a depressed market.

Purchasing an investment property when the market is down can be extremely profitable.

But you still have to make sure you’re getting a good deal in a buyers’ market – and wise investors won’t be so blinded by the chance of a ”bargain” that they ignore their long-term strategy – which all means it isn’t as simple as it might look.

In a sellers’ market almost any price a vendor puts on a property results in a sale and such buoyant conditions tend to hide ”over-enthusiastic” prices.

In a depressed market, it’s much easier to buy real estate at more realistic prices because there’s more supply than demand.

Real estate isn’t a uniform market, though. There are many sub-markets that perform differently.

Good properties in certain areas can still sell within 24 hours of being listed, whatever the prevailing conditions, so it’s vital you get up to speed with the buying tactics used by seasoned investors.

Target fail-safe properties

The best properties to buy are those that will always be in demand. For many investors, this means acquiring property that’s close to the city centre. For others it means opting for houses or units priced at near the median price for their areas, which are sought-after by owner-occupiers and investors.

Areas that perform well over time and properties that have a high land content are often your best options.

With units, the golden rule is to go for an apartment in a popular location with restaurants and transport nearby. It should be in a well-constructed building with a high land-to-unit ratio.

Distressed sellers

Many vendors have been hit hard by changes in their circumstances. While mortgagee sales are a clear sign of the economic slowdown, you also need to be on the lookout for other signs of vendor distress.

The number of couples seeking divorces tends to rise in times of financial hardship. Other vendors give up on home ownership and go back to renting. You don’t always discover these factors the first time you talk to an agent. But if you prod him or her and ask the right questions, you’ll obtain information that may help you secure a good property at a great price.

Avoid speculation

It’s crazy to buy a property at below market value if it’s in an area where prices are set to fall. Some property advisers believe this is not a good time to speculate or to rely on the ripple effect to drive up capital growth in suburbs bordering proven growth areas.

Speculators do best when markets are running hot. With the number of properties for sale rising in many areas, your opportunity to make good money by targeting properties in established suburbs is higher. Why take the risk on an unproven area?

Look for multiple listings

Listing a property with several agents shows a keen vendor. Because no single agent has an exclusive deal, you may be able to buy directly from the vendor. This can eliminate $30,000 or more in agents’ selling fees from the sale. You need to tread carefully and take legal advice, however.

Many of these vendors usually want an agent to handle the final sale. Even so, the fact their property is listed by several agents means they want to sell and fast.

Go fast, go slow

A buyers’ market means buyers are more in control than sellers. It’s easier to negotiate a delayed settlement on a purchase but don’t forget that speed is also a useful bargaining tool. In a slow market, cash is king. A vendor may take considerably less for a quick settlement compared with another higher offer on delayed terms.

If you’ve found a property you want and have gone through your normal planning and checking processes, a cash unconditional offer and a quick settlement can significantly reduce the price you pay.

Story by Chris Tolhurst www.domain.com.au

The housing sector is stabilising as talk of an interest rate rise wanes and Australians are encouraged to borrow more, economists say.

The number of home loans approved in August rose 1.2 per cent to 50,965, official figures show. Economists’ forecasts had centred on a 1 per cent rise in housing finance commitments for the month.

August was the fifth straight month that housing finance commitments had risen.

The Australian Bureau of Statistics said total housing finance by value rose 1.0 per cent in August, seasonally adjusted, to $20.848 billion.

JPMorgan economist Ben Jarman said the figures showed the housing sector was stabilising rather than rebounding.

‘‘It certainly means it’s not falling into a hole,’’ Mr Jarman said. ‘‘In the last few months worth of data, the housing finance figures have benefited from the perception that the RBA won’t be doing much in the near term.

‘‘So, if you went back to the start of this year, the RBA didn’t hike rates but there was all the forecast and all the language were making noises that you would get a couple of hikes this year.

‘‘Those aren’t being delivered and things offshore have turned a little bit sour.

‘‘What you’ve seen in the last few months in the home loans data is these fading expectations are helping out and people are coming back and they are happy to take on new debt.

‘‘We’re kind of calling this a mini-rally, but don’t think that this is the start of a tear away in the housing market.

‘‘There’s still a lot of uncertainty globally and that’s what’s keeping the RBA on the sidelines.’’

Mr Jarman said JPMorgan still expected the RBA not to change the cash rate from its current 4.75 per cent until at least the middle of 2012.

‘‘You’ve got a lot uncertainty offshore counterbalancing the domestic inflationary situation here and we see the RBA not doing very much for a while.’’

ICAP senior economist Adam Carr said August’s housing finance figure was a good result and continued a 13 per cent increase in lending since April.

‘‘The pattern we’ve witnessed over the last year is that home lending is posting a dramatic improvement after a GFC induced slump, interrupted only by the floods and the disasters,’’ Mr Carr said. ‘‘Now we’re back on track.’’He expected housing finance data to continue to be strong in the coming months.

‘‘Financial conditions are not too tight, we’ve had an easing in financial conditions (and) lending rates are going sharply lower.

‘‘Don’t forget the unemployment rate is low and income growth is strong, so the prospects are really good.’’

The data also highlighted why a cut in the cash rate was not needed, he said.

‘‘The reason I say that is because the economy is healthy – we don’t need one or two rate cuts.

‘‘We’re either going to get 100 basis points worth of cuts or more because Europe collapses and we have another GFC or, I would imagine, we get none.

‘‘That’s because retailing is accelerating, home lending is accelerating, approvals are accelerating and the unemployment rate is low.

‘‘To argue that we need one or two rate cuts is just absurd.’’

AAP

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

Here are some tips:

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