Australia’s housing sector has called on the reserve bank to deliver a 50 basis point interest rate cut after a survey showed new home sales have fallen to their lowest level in more than a decade.

The Housing Industry Association (HIA), which represents the residential building industry, says new home sales dropped 9.4 per cent, seasonally adjusted, in March 2012, their lowest level in more than 10 years.

Multi-unit sales slumped 6.4 per cent over the same period.

HIA chief economist Harley Dale called on the Reserve Bank of Australia (RBA) to deliver a 50 basis point interest rate cut at its board meeting on Tuesday.

An AAP survey of 16 economists on Friday showed all expected the RBA to cut the cash rate 25 basis points, to 4.00 per cent, this week.

However, Mr Dale said a larger cut was needed to revive the housing sector.

"The bank needs to send a clear signal that it is back on the case of assisting an economy that is clearly weaker than it anticipated in 2012," said Harley Dale.

"It is not too late to turn the situation around and prevent new housing from revisiting a GFC (global financial crisis) low.

"Interest rate cuts, while no panacea, can provide substantial assistance in restoring confidence and activity."

The survey of Australia’s 100 largest builders found Queensland suffered the biggest decline with new home sales down 15.3 per cent, followed by Western Australia, down 12 per cent, and New South Wales, down 9.7 per cent.

Story source: http://finance.ninemsn.com.au

Foreign investors have “very odd” views about Australian property and fret that housing prices may yet collapse, according to a senior Australian banking executive.

“Overseas investors have a very odd set of views about Australian property prices,” Phil Chronican, ANZ’s chief executive of its Australian operations, said today.

“They on one hand look at the stability and take a lot of comfort from it. The other is they cannot believe Australia was able to not have a property price collapse.”
Questions about the health of Australia’s property market continue to surface in talks ANZ has with investors overseas more than four years after the financial crisis battered real estate markets in the US and UK, Mr Chronican told the American Chamber of Commerce in Melbourne.
Australia’s capital city home prices have lost 4.4 per cent in the year to March, and the outlook remains subdued.

While home prices have turned positive in the past two months, building approvals and dwelling starts have plunged and a shortage of affordable homes remains.
In the wide-ranging speech, the executive in charge of ANZ’s domestic market said the mining boom was passing many Australians by, contributing to a drop off in consumer activity in recent years.
“Despite our strong economy, many Australians feel worried about our prospects in the face of uncertainty in Europe and many, particularly outside the fast lane of the mining and resource sector, feel they’re not seeing the benefits,” Mr Chronican said.

Story by Chris Zappone, www.domain.com.au

The board of the Reserve Bank of Australia has left the official cash rate at 4.25 percent for the second month in a row.

The move was widely expected with inflation at the bottom of the RBA’s target band of 2-3 percent and global economic conditions improving.

However, the news may not be met with the rapturous receptions of the past with many lenders now lifting their rates independently of the RBA.

"The rates that borrowers pay have been creeping away from the Reserve Bank’s cash rate movements since the global financial crisis," RateCity CEO Damian Smith said.

"Last month proves that all variable rate mortgage holders are vulnerable to rate hikes, regardless of what the RBA does."

The central bank left rates on hold last month but that didn’t stop the big four, ANZ, Commonwealth Bank, NAB and Westpac from lifting their standard variable mortgage rates between 0.06 and 0.10 percent.

Westpac-owned St George went even further by hiking their rates by 0.12 percent.

The RBA was expected to ease rates last month but shocked observers when it left the rate unchanged, citing the resilient domestic economy and improved global outlook.

The decision not to move rates suggested the RBA had confidence in the local economy, buoyed by low unemployment and continued demand for labour.

However, the new dynamic the banks have set up by raising rates independently of the RBA mean borrowers could be hit by a rate rise at any time.

"Borrowers should expect frequent small changes in rates, perhaps as often as every month," Mr Smith said.

Source: www.ninemsn.com.au

From the Boardroom – 2012 Summer Edition

To read the full story, please click on the link!

As we head into 2012 pondering where the housing market is headed – will it be down 10 per cent as some commentators are expecting, or will others be on the money with predictions of 5-7 per cent growth – there is some interesting news emerging about home loans.

Out today are figures showing mortgage holders are increasingly being lured by fixed rates.

Despite predictions about one, two or even three rate cuts coming over the next six months, a growing number of homeowners are locking in their rates now. Data from the Australian Bureau of Statistics shows fixed loans grew from 10.6 per cent of new housing loans before the most recent rate cut in November to 11.1 per cent.

And mortgage broker AFG reveals that 19.2 per cent of loans arranged through its business in December were issued at fixed rates, a big jump from 8.2 per cent six months earlier.

An odd move you may think given all the predictions are for official rates to fall further this year. But CommSec economist Savanth Sebastian argues people are simply getting in at what they can afford.

“It’s more about ensuring you can purchase a place within your budget and within your limits," he says. "While the risks are to the downside [for rates to fall], I think the fixed rate market has already priced in a couple more rate cuts,” he says.

In addition “even though the Reserve Bank will cut rates, the banks need to pass it on. So the fixed market is looking very attractive, not only do you need a couple more rate cuts [for variable rates to match fixed] but you need it all to be passed on as well to justify where the fixed market is.”

Many homebuyers may also be wary that should there be a swift change in the economy, rates can easily shoot back up. 

“We saw straight after the GFC how rates rose, it certainly would have caught some home buyers that were on the edge in terms of repayments, so at least this way they can sleep easy,” says Sebastian.

Further news on the home loan front could point to a slightly more positive year for property than last, where we saw prices fall across the board. Australian Bureau of Statistics figures have revealed that the number of new owner-occupier housing loans rose by 1.4 per cent in November while the value of loans rose by 2.2 per cent.

However, home loans aren’t being drawn down – rather potential buyers are simply getting their finance sorted and sitting back and waiting until the right time to buy.

So while for the past eight months there’s been consecutive jumps in the number of home loans being approved, in November the value of loans that had actually been drawn down was two per cent lower than a year ago, and commitments not advanced were almost 11 per cent higher than the previous year.

With all the concern about the state of the US and European economies, it’s little wonder buyers have been taking a cautious approach.

So just what will entice all these cashed-up potential home buyers to jump? Could a February rate cut be enough?

CommSec’s Sebastian thinks so. “Even the thought of rate cuts should prompt activity levels to increase over the next few months,” he says.

Story source: www.domain.com.au

New home sales jumped in November in response to the Reserve Bank’s interest rate cut.

The sales of new homes rose 6.8 per cent in November, following a downwardly revised increase of 2.8 per cent in October, according to the Housing Industry Association – Jeld Wen new home sales report.

While detached house sales surged 9.8 per cent, apartment sales slumped 17 per cent, HIA said today.

“Interest rate cuts, both those we’ve had and those that are still warranted, provide a … catalyst for a sustained and strong recovery in new home building conditions,” said HIA chief economist Harley Dale.

The Reserve Bank in November lowered the interest rate to 4.5 per cent from 4.75 per cent, in response to increased concerns about the European sovereign debt crisis slowing the global economy and hurting Australia’s growth.

It was the first reduction since April 2009. In December the RBA cut the key rate by another 25 basis points.

Capital city home values also posted their first monthly rise in 2011 in November, edging up 0.1 per cent seasonally adjusted, according to RPData.com.

For the year to November, however, capital city home prices fell 3.5 per cent.

"This is a healthier but not unexpected result," Dr Dale said.

"With falling interest rates, a competitive building market, and a greater availability of skilled trades amidst still very soft overall demand conditions, now is clearly a good time to build a new home for those who are financially set to take that decision.

“There is, however, a long way to go to restore new home sales volumes to acceptable levels," he said. "At present sales volumes are running at least 20 per cent below what you could conservatively call
healthy."

Sales soar in NSW

The volume of detached house sales soared 22.8 per cent in New South Wales and 11.6 per cent in Victoria. They also rose 5.7 per cent in Western Australia and 4.7 per cent in Queensland. In South Australia they fell 11.3 per cent.

Mr Dale said a full recovery in housing activity wouldn’t emerge unless the government offered well-targeted stimulus and began to reform housing planning policy to cut the barriers to new housing supply.

Measures of growth in the construction sector show that it remains under pressure, as households borrow less and real estate prices keep housing out of reach for would-be buyers.

The Australian performance of construction index for December, released today, remained under the 50 point level separating expansion from contraction for the 19th straight month even as the index rose by 1.4 points to 41 in December, helped by the resources-related construction.

Australian Industry Group director of public policy Peter Burn said the two-speed economy was visible in construction data, with "a clear divide between the expanding engineering construction sub-sector and the still-contracting commercial and residential construction sub-sectors".

House building fell 5.7 points in December to minus-32.9.

"The increased pace of contraction in the house building sub-sector in December remains deeply concerning,"  Mr Burn said.

Story by Chris Zappone www.domain.com.au

AUSTRALIAN housing markets displayed a generally resilient performance in 2011, reflecting the inherent security of residential real estate in this country, particularly when compared with housing markets in similar open-market economies.

The year was always set to be a period of correction for Australia’s housing markets following the unsustainable growth in house prices recorded through 2009 and 2010.

Between January 2009 and June 2010, Melbourne’s quarterly median house price rose by nearly 30 per cent, with Sydney’s up by almost 20 per cent over the same period. All other capitals also recorded big rises in house prices over those 18 months.

Housing affordability crashed by the end of 2010, with surging house prices and rising interest rates combining to send buyers into hibernation.

Australian Property Monitors data has revealed that capital city housing markets have generally performed encouragingly in 2011 despite the pressure on housing affordability generated in 2010 and a mixed economic performance in 2011.

The national median price for houses over the year to October 2011 fell by just 1 per cent compared with the previous year, with median unit prices rising by 1.2 per cent over the year. The 2011 result follows a 17 per cent rise in the national median house price over the year to October 2010 and a 12.2 per cent rise in the median unit price over the same period.

The best capital city performers were Melbourne and Sydney, where annual median house prices rose by 1 per cent. Darwin and Adelaide house prices were flat and Hobart down 1.5 per cent.

The worst performers over the year were Brisbane and Perth, where annual median house prices fell by 3.5 and 4.75 per cent respectively.

The unit market clearly outperformed the housing market over the year to October 2011, with Sydney recording median unit price growth of 2 per cent followed by Melbourne and Darwin up by 1 per cent. Brisbane and Perth were again the underperformers, with annual unit prices falling by 1.3 per cent and 3.5 per cent respectively.

Bureau of Statistics data confirms the solid performance by Australian housing markets in 2011, with the number of owner-occupier housing loans rising by 2.4 per cent over the 10 months ending October compared with the same period in 2010.

New South Wales was the best performer with an increase of 8 per cent, with Western Australia surprisingly in second place with growth in home loans of 7 per cent over the year, courtesy of a surge in the past three months – indicating perhaps growing late-year momentum in that market.

By contrast, the number of home loans approved in Queensland in the year to October fell by 8.4 per cent compared with the same period in 2010.

The nature and strength of Australian housing markets in 2011 was always to be determined by the underlying supply and demand characteristics of individual markets and the strength of national and local economies.

In addition to the affordability barriers created by the prices surge and interest rate rises of 2009 and 2010, housing markets have had to encounter unexpected headwinds in 2011. The impact of the central Queensland and Brisbane floods was not restricted to the local housing markets. National economic output was affected through reduced coal exports and the cost of the reconstruction levy. Higher prices for fruit and vegetables also affected household budgets nationally.

The impact of catastrophic natural disasters on the national psyche and confidence cannot be underestimated, particularly given Australia’s recent propensity for financial conservatism, especially when it comes to buying or borrowing.

The Japanese earthquake and associated tsunami in March also contributed to lower economic growth and reduced consumer confidence.

Stalling economic growth in 2011 was also a product of continued mixed performances by various industry sectors, particularly retail, manufacturing, tourism and construction. As a consequence, all capitals recorded rises in unemployment through mid-year. All these factors combined to subdue consumer capacity and confidence and consequently dampen home buying activity through 2011.

Most Australian capital city housing markets are, however, set to record growth in median prices over 2012 as the national economy gathers strength. The Australian economy is primed to expand strongly on the back of a significant resources boom with the Organisation for Economic Cooperation and Development predicting gross domestic product will increase by 4 per cent over the year.

Melbourne, Adelaide and Hobart will be the underperformers in 2012, with median house price growth of between zero and 5 per cent.

Melbourne’s balanced housing supply and demand mix offers buyers a wide choice and it remains the most tenant-friendly capital city rental market. Affordability barriers, however, remain for home buyers.

With the Victorian economy showing signs of running out of puff, particularly as the recent construction boom abates, the housing market is set to drift sideways though 2012. The possibility remains of some growth in median house prices by the end of 2012 as the impact of a strong national economy filters through.

Dr Andrew Wilson is senior economist for Australian Property Monitors.

Source: BusinessDay

www.news.domain.com.au

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

What do you do if you are young and thinking about investing in property?

A 19-year-old I know has plans to save up to buy his first property, and mentioned that he’s not too sure where to start. Should he do a property course, he wondered? And how do you know where is a good place to buy? Let alone what you should pay.

He’s thinking not of giddily purchasing his first property to live in, but of buying an investment property and slowly, over his lifetime, purchasing some others.

What do you do if you are young and thinking about investing in property?

A 19-year-old I know has plans to save up to buy his first property, and mentioned that he’s not too sure where to start. Should he do a property course, he wondered? And how do you know where is a good place to buy? Let alone what you should pay.

He’s thinking not of giddily purchasing his first property to live in, but of buying an investment property and slowly, over his lifetime, purchasing some others.

We’ve been hearing for a little while now how this is a trend among 20-somethings, and those into their 30s. Buy a place as an investment, often a cheaper unit in a less desirable area, and then tap into the tax advantages of negative gearing (by keeping your outgoings on the property higher than the rent coming in) and either rent yourself in an area you want to live, or stay at home with the baby boomer parents where the board is minimal and the washing comes for free.

So for Jake, and any other young people wondering which way to go, here’s a few tips. And I’m sure readers will offer up plenty more in the comments space below.

1. Ask yourself, should I be investing in property at all, and what do I expect to get from it?

If it’s a road to quick riches you want, then this is not the path to take. Yes, we have seen some huge run-ups in prices over the years, and it’s true that property prices, like the economy, tend to run in cycles, so we will obviously see increases in years to come, even despite the current negativity enveloping much of the globe.

Because property buyers are human, and love to follow a trend, and for some bizarre reason feel more comfortable buying when prices are running hot, there is no doubt there will be price rises once again in the future.

There are a whole bunch of other factors pointing to future price increases too – in some cities the lack of building will keep the supply lower than it should be, the population continues to grow meaning so does demand, and in Australia at least, we remain a wealthy country still experiencing household income growth.

However, don’t bet everything on this happening and by how much prices will go up – instead expect to see, over a longer period of time, steady increases with plenty of troughs along the way as the economic cycle rises and falls.

And now, here’s the cue for all the readers who argue the market is about to tank and that now is not the time to buy property. And with Europe perched on a precipice and the US still in an uncertain state, you do have to question whether the bottom of the market has been reached yet despite the pretty strong fundamentals underpinning the Australian economy at the moment.

However, if you are a young person just starting to save for your first property, you have a bit of time to sit back and watch the market while you save anyway, so don’t fret too much at this juncture.

2. Educate yourself

The mere mention of "property course" sends shivers down my spine. Often it’s run by property spruikers taking hundreds or thousands of dollars off gullible people who are then, at best, fed information they could find themselves by reading widely, or at worst, the poor souls are flogged the company’s own products or services, all with the shiny promise of sky-high returns.

There has never been an easier time to learn the whys and wherefores yourself. The internet has opened up a world of information, and young people wanting to learn a bit more about property should be heading there (to reputable sources) as well as to the property lift outs in newspapers, and better quality magazines.

Want prices? Find them on websites like Domain.com.au or Australian Property Monitors (both owned by Fairfax Media). Want to find the best loan? Check out a loan websites such as ratecity.com.au. And need to know where the market is headed? Read plenty of stories and opinion pieces and rather than taking just one as gospel, glean the general themes from what all have to say.

If there’s a few property terms you don’t understand – such as negative gearing – look them up and get your head around what they mean. That won’t unlock a magical key to property investment for you and land a bag of gold at your feet, but it will stop spruikers taking advantage of your youth and naivety.

3. Take a balanced approach

Property holds a certain glimmer for some young people – perhaps under the encouragement of their parents who prefer a bricks-and-mortar approach. And also because everyone has lived in a house or a unit, but not everyone has held shares or gold or even superannuation.

But if you are young and have the advantage of having your head screwed on the right way and are already thinking about investing, you should be looking at all investment classes impartially. Sure, consider property, but look at it as part of building a balanced portfolio.

Even at 18, 19, you’re not too young to start putting a few extra dollars into super, keeping some of your money in cash in the highest-paying account you can find, and also thinking about a small parcel of blue chip shares to start you off, all while saving to buy your first property. Education, it must be said, can also be considered an investment class in the fact that you are boosting your own potential earning capacity.

And when I say dollars, I really do mean just a few dollars. Even small amounts each week from a meagre income are better than nothing.

This is a smart approach because it lets you spread your risk, and not put everything into the one basket. Sure, this mean it will take you a little longer to save for the first property, but time is on your side if you are young, and to use a cliché, Rome wasn’t built in a day.

4. Save as much as you can before buying

If you plan on being a landlord, you will need to have some extra cash available to cover the loan in between tenants, and also to pay for any repairs to the property. If you are buying into an apartment block or townhouse, you may need also extra money to pay for special levies such as building repairs not covered by the sinking fund (the general fund amassed by the body corporate from strata levies).

So the smart thing to do is to save a good amount of money before purchasing so you’re not taking an uncomfortable risk.

5. Research where to buy

The old adage is buy as close to the city as you can and look for properties that don’t have huge outgoings due to lifts and fancy add-ons such as gyms and pools, but do have the advantage of being near good infrastructure.

Closeness to the city can be good but I would also focus on the infrastructure side of things, and whether or not the suburb has the potential to develop over time.

Buying near rail (heavy or light) infrastructure is always a good bet as the infrastructure will stay there for a long time, and as populations continue to grow and further congest areas, the infrastructure will become even more important.

Do carefully think before buying in areas with inherent negatives, such as heavy flight paths or a lot of noise. Also very busy roads can be a problem – it can be smarter to buy just off them.

Keep your tenant in mind – what type of person would like to rent this and do those people generally live in this area?

Do try to buy something that would be easy to sell again in a hurry if you needed to, should your circumstances change. If a property you are buying has sat on the market for months and months, be sure to find out why and be realistic about encountering the same selling problems if you should buy it.

For that same reason it is good to try to buy something that is around the median price for a suburb, as it should have a larger pool of potential buyers.

6. Keep some cash aside after buying

When you buy the property, don’t sink all your money into the loan if you can help it, keep a good chunk in a flexible high-interest earning account (not a term deposit, as you may need to access it at short notice).

Use this as your maintenance fund, and to top up the property loan if you need to (and for many properties, in the early years at least, the rent won’t cover the mortgage, council rates, strata and water supply charges, so you need to be in a position to pay for the gap yourself).

The cash you keep, though, must strictly be for investment and as a reserve for maintenance and loan top-ups, not for holidays or random spending, as you always need a buffer so you aren’t forced to sell at the worst possible time.

7. After you buy, keep saving

Direct any spare cash to your savings account, not your investment loan. Or if you decide to buy a property to live in, use the cash to pay down your own home loan as fast as you can, rather than the investment loan.

By doing this, you make negative gearing work for you because, by keeping the loan against the property larger, you are paying the highest amount of interest you can, while earning interest off your other money you are keeping in cash.

Or in the case of living in your own property you do want to pay that off as soon as possible to get rid of non-tax-deductible debt.

While I’m advocating not dumping all of your extra cash into your investment loan, it is prudent to pay the property off over time to gradually reduce your liabilities, rather than remain solely focussed on negative gearing.

For that reason, interest-only loans on investment properties may not be wise in the longer term, as you are basically betting on price increases to cover you. Yes, price hikes will probably happen over the longer period but you don’t want to bank your entire savings on them.

8. Get your hands dirty

If you buy a property that needs to be fixed up, and you have time on your side, get in and do it. Many things such as pulling up carpets and painting can be achieved with little experience – you just need to have a go.

You might be surprised at just how much painting kitchen cupboards, tired tiles and old baths can rejuvenate a property.

Do be aware of any dangers that lurk in the property though, such as asbestos, and treat them appropriately. And do call in trades for jobs that are beyond you, such as electrics, plumbing and larger tiling jobs.

9. Be a good landlord

Be prepared to spend on maintenance over time and keep your property up to scratch. You’ll attract better tenants, and your property will also hold its value better. Rundown rentals look shabby and often don’t command a good price come sales time.

10. Take your time before buying again

If you have your sights set on owning more than one property, don’t be in too much of a rush. Keep your investing balanced, putting some funds into other classes such as cash, shares and super.

And when you have built enough equity you can then consider buying a second property. Balance your risk though and don’t get yourself in over your head. You want the power to hold each property for as long as you see fit, rather than be forced to sell should disaster strike.

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

Source: www.domain.com.au

House hunters who are pre-approved plan for a happier New Year

Future first homebuyers considering making their property move in the New Year have strong awareness of the importance of seeking loan pre-approval before house hunting, based on insights from national mortgage broker, Mortgage Choice.

A Mortgage Choice survey of first homebuyers looking to purchase before February 2013 found two-thirds of respondents intend to apply for loan pre-approval*.

According to Acting Head of Corporate Affairs, Belinda Williamson, first homebuyers are seeking assurance about their borrowing capacity before starting their property search.

“Our survey showed primed first homebuyers are making the wise choice to get their property finance pre-approved by a lender. This step helps buyers hone their property search and shop with confidence when negotiating a purchase or bidding at auction,” Ms Williamson said.

“Loan pre-approval provides a conditional approval of a loan amount and is usually based on an assessment of potential borrowers’ individual circumstances, needs and ability to repay the loan.

“Keep in mind it’s usually a limited time offer, for a period of three to six months and can be sourced through a mortgage broker. Once pre-approved, it’s important to keep your broker up to speed with any changes in your financial situation as this may void the agreement.

“It pays to shop around. Not all lenders offer loan pre-approval and some don’t conduct individual assessments, meaning you may get a different loan limit upon applying for unconditional approval and, like those without pre-approval, you could miss out on a property if it’s above your loan limit.

“If you are looking to purchase in the New Year now is a good time get pre-approved so you don’t miss out on potential property purchases over the holiday period.”

Mortgage Choice has compiled three top tips to help potential borrowers prepare for home loan pre-approval:

Organise your deposit and evidence of savings – You generally need a deposit of at least 5% of the purchase price, plus upfront costs. However, you will need to show evidence of a genuine savings plan, such as bank statements that illustrate a savings strategy for at least three and up to six consecutive months. Note some lenders now consider rent payments as savings evidence.

Check your credit history – Grey areas in your credit history, such as bill defaults and/or prior loan/credit applications can affect your loan pre-approval application. Resolve any issues with the relevant debt provider before you apply. For a copy of your credit file from mycreditfile.com.au you must provide personal details including your address, employment and driver’s licence number.

Prepare your paperwork – Gather evidence of your employment, income, assets, liabilities and expenses. You will also need to provide your driver’s licence or other ID, recent pay slips, tax returns and bank statements. Having everything at arm’s reach will streamline this process.

Story source: www.mortgagechoice.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

Fixed term mortgages hit 3.5 year high in October

Basic variable rates were the most popular with new home loan borrowers only 11 months ago, but today they have been far surpassed by ongoing discount rates and fixed rates, according to loan approval data from Mortgage Choice, Australia’s largest independently-owned mortgage broker.

At that time, the no-frills product type accounted for 34% of the broker’s new approvals. Today, this sits at less than 16%, the second lowest point since Mortgage Choice began recording such data in January 2003.

Fixed rates are now more in demand than they have been in well over three years, and although the popularity of ongoing discount rates dropped for the first time in October they remain by far the most popular home loan with new borrowers, accounting for more than 43% of approvals.

Company spokesperson Kristy Sheppard said, “When comparing our October loan approval data to that extracted one year ago, it’s remarkably obvious how much the industry has changed in reacting to subdued housing finance demand and a relatively positive interest rate outlook.”

“Then, basic variable rate was the loan of choice at just over 34% of approvals. Standard variable rate followed with just under 34%, then ongoing discount rate at 17% and fixed rate at 11%.

“That situation has now flipped. New borrowers’ appetite for fixed rate loans is at a three and a half year high of 20% of approvals and ongoing discount rate loans account for 43% of approvals.

“In an environment of rising living costs and economic uncertainty it is unsurprising borrowers are taking advantage of the relatively low fixed rates and attractive variable rate discounts offered by lenders hungry for business.”

The popularity of standard variable, line of credit and introductory rate home loans all fell in October, to 15%, 4% and 1% of approvals respectively. Basic variable demand rose slightly to 16%.

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.

One in 10 Australian households is in housing stress and at risk of financial hardship and poverty, a new report says.

Renters and first home buyers are most under pressure, with 26 per cent of renters and 15 per cent of first home buyers in housing stress, the Australians for Affordable Housing (AAH) said on Monday.

"There is an entrenched and significant group of people in Australia who face day to day hardship because of their housing costs," AAH spokeswoman Sarah Toohey said in a statement.

Overall, 850,000 households across the country are at risk of financial hardship after paying for housing costs, of which nearly 300,000 are in NSW.

The report, commissioned from the National Centre for Social and Economic Modelling (NATSEM), found 21 per cent of first home buyers in Melbourne are more likely to experience housing stress, compared to 15 per cent in Sydney.

Hobart and Sydney put the tightest squeeze on renters. Hobart has the highest rate of renters in housing stress at 33 per cent, while Sydney has the highest number with more than 100,000 households facing poverty because of the high cost of renting.

"A secure home is a fundamental building block for everything else we do in life," Ms Toohey said.

"We need to create a housing system that works for everyone."

Story source: www.ninemsn.com.au