Lowest cash rate since 1959

May 8, 2013 Leave a Comment

Mortgage holders welcome 2.75% cash rate

IN a largely unexpected move yesterday the RBA has reduced the cash rate to 2.75 per cent which is the lowest since records began in 1959.

And, to the added delight of mortgage holders, the major banks – with the exception of the ANZ – have passed on the full 25 basis points cut. This will provide a monthly saving on a $300,000 mortgage of about $31 giving home owners welcome budget relief.

The RBA cited low inflation numbers and generally pessimistic market expectations as the trigger to reduce the cash rate, hoping the move will generate more spending in the economy.

Financial experts claim this is an ideal time to check out interest rates on offer from big and smaller lending institutions to ensure home owners are getting the best possible deal on their mortgages.

National licensing for real estate agents still a way off

February 9, 2013 Leave a Comment

Many issues need to be sorted out

THE thought of real estate agents acting under a National License rather than the current State Licenses for property transactions has long been mooted but according to Real Estate Institute of Australia president Mr Peter Bushby, its implementation is still a long way off.

The Real Estate Institute of Australia (REIA) says that there are still many issues to resolve before national licensing can become a reality for the property profession.

Speaking after a meeting of the Interim Occupational Licensing Advisory Committee (OLAC) held in Sydney today, REIA President, Mr Peter Bushby said, “It appears that the views of the industry and the concerns of consumers are being ignored in favour of those of bureaucrats with no background in property.”

“They are more interested in a predetermined ‘one size fits all’ regulatory response”.

At OLAC, the National Occupational Licensing Authority (NOLA) outlined advice it would give to the Standing Council on Federal Financial Relations which will be making its decision on national licensing in March.

REIA argued that the Regulatory Impact Statement (RIS) on which the bureaucrats’ views are based, has failed to provide a reasonable case for change. “The cost benefit analysis in the RIS is flawed and the overall proposal fails to take into account the needs of consumers,” said Mr Bushby. “We have continually asked that time be taken to do the analysis comprehensively and correctly so that the best outcome can be achieved. This is why REIA has asked that real estate be put in the second tranche of national licensing with the other property professions. Don’t put in place a sub-optimal solution for the sake of meeting an artificial deadline.”

“REIA supports the principle of national licensing but is adamant that issues such as the level of qualification, mandated compulsory professional development, licensing of commercial property transactions and minimum age requirement need to be resolved first,” added Mr Bushby.

REIA says the states and territories are not ready for national licensing, with many matters on conduct harmonisation yet to be addressed such as right to commissions, agency agreements, standards of behaviour and appointment of receivers and managers.

The Real Estate Institute of Australia (REIA) is the national professional association for real estate agents in Australia.

RBA puts interest rates on hold

February 5, 2013 Leave a Comment

Further cut not supported

THE Reserve Bank (RBA) has decided to hold-off on providing homeowners with further financial assistance by electing to keep the cash rate on hold at 3%.

In their first meeting since December 2012, the RBA considered that despite inflation in December 2012 being half of what was anticipated, conditions did not warrant a further cut in the cash rate.

According to the ABS, the December consumer price index rose by a mere 0.2% – a fraction of the 1.4% jump which occurred in the September quarter – with inflation moving towards the lower end of the RBA’s 2%–3% target range at 2.2%. The RBA’s next meeting will be held on March 5, 2013.

Point of Interest

THE Reserve Bank of Australia (RBA) is responsible for monitoring and altering the official cash rate for Australia. They can either raise or cut the official cash rate by a measure of ‘basis points’ in an effort to manage the Australian economy’s inflation. These changes will affect the interest rate that banks will charge customers for loans – most notably variable rate home loans.

Since the Global Financial Crisis (GFC), the cost of borrowing has increased to the point where banks will only absorb costs up to a point. In an effort to remain profitable, banks may autonomously pass on – or completely ignore – rate changes despite the RBA’s decisions.

Filed Under Investing News, Realty News Tagged With Rates cut, Rates on hold, RBA meet

Rainwater tanks no longer mandatory in Qld

February 2, 2013 1 Comment

Reforms to cut thousands from new home costs

QUEENSLANDERS planning on building a new home this year (2013) have been given an opportunity to save a little, after the Newman Government announced reforms that will cut thousands off the cost of construction.

Minister for Housing and Public Works Tim Mander said the Government planned to scrap laws that make it compulsory to install rainwater tanks and gas, solar or heat pump hot water systems in all new homes. “These requirements add an unnecessary cost to homeowners and place an unwanted drag on the construction industry,” Mr Mander said. “These changes will potentially reduce the cost of building a new home by more than $5000.

$15,000 First Home Owners Grant

“Taken in conjunction with the $15,000 first home owner’s grant for new dwellings, that’s a massive saving for anyone planning on building a new home. People who want to install rainwater tanks or a particular type of hot water system can still do so. The difference is that the decision is now theirs to make.”

Under the new laws, Councils will be able to opt to retain mandatory rainwater tank requirements where they can prove a net benefit to the community.

Mr Mander said the changes would also allow existing home owners to replace a broken electric hot water system with a similar model. “Under existing laws, owners of homes in reticulated natural gas areas are restricted to gas, solar or heat pump hot water systems, which often cost thousands of dollars more than the electric model they’re replacing.

“Although solar or heat pump systems are more energy efficient, they are more expensive to buy and often require extra plumbing and electrical work to retrofit the existing property before they can be installed. Replacing a broken hot water system is often a significant, not to mention unexpected, expense,” Mr Mander said. “It’s not fair to force people to choose the more expensive product.”

HIA Executive Director Warwick Temby applauded the moves to improve housing affordability. “These are very pragmatic decisions that will make a meaningful contribution to improving housing affordability, especially for first time buyers,” Mr Temby said.

Master Builders Director of Housing Policy Paul Bidwell also welcomed the decision. “This is very positive news for our industry and for the broader Queensland community,” Mr Bidwell said.

“The cost of a rainwater tank adds up to $6000 to the price of a new house and in some cases this can be even more on smaller lots. These changes will significantly reduce the cost of housing. Our members advise the extra costs of tanks and energy efficient hot water systems will be removed from the cost of new homes if consumers choose not to install them.”

Filed Under Investing News, Realty News Tagged With builders requirements, First home buyers, investors, Laws change, New homes, Water tanks

Budget for extra costs when buying a home

January 29, 2013 Leave a Comment

Minimise costs by being prepared

By Shirley Broun

THINKING of buying your first home? Then be aware that the cost of the home you want to buy is boosted by the many extra costs encountered throughout the buying process. And it is important that you factor in this added expenditure when budgeting to buy a new home. So, being prepared can save a lot of heartache and frantic worry trying to get into your first home.

Most people are aware that securing finance for a home loan to fund the purchase automatically brings with it upfront and ongoing fees. It is advisable to ask the lender or mortgage broker to list all the fees of the loan you are considering and when they are payable before signing any agreement.

Fees which may be included are application fees, valuation fees, establishment fees, service fees, transaction fees and exit fees. Lenders may also require you to take out mortgage insurance and while you are paying for it, the insurance actually insures the lender against any default on repayment. However, sometimes this is a requirement for you to get the home loan.

When taking out a home loan, ensure the fee structure suits your situation and budget. Don’t be afraid to ask the relevant questions to ensure you know exactly what’s on offer.

Stamp Duty Concessions

Stamp Duty can add a substantial amount to a property purchase but there is good news for First Home Buyers. In Queensland, First Home Buyers can benefit from a $8750 Stamp Duty Concession on properties up to $505,000, as of July 1, 2012.

The 2012–13 Queensland State Budget also introduced the first home owner construction grant (FHOCG), administered under the First Home Owner Grant Act 2000. The grant is available to first home owners who will be buying or building a new home. This grant of $15,000 is available for: Contracts to buy a new home (including off the plan) dated on or after 12 September 2012; Contracts to build a new home dated on or after 12 September 2012; New homes being built by an owner–builder where the date the foundations start to be laid is on or after 12 September 2012.

A new home is a home that: has not been previously occupied as a place of residence; has not been previously sold as a place of residence; or is a substantially renovated home (in certain circumstances).

The $15,000 grant will not be available: if the contract replaces an existing contract made before 12 September 2012; for new homes where the contract is dated before 12 September 2012; for owner–builders where the date the foundations start to be laid is before 12 September 2012; or for established homes.

The FHOG eligibility requirements also apply to the construction grant, including a cap amount of $750,000.

You may still be eligible for the $7000 first home owner grant for established home purchase contracts dated before 11 October, 2012. For further information http://www.osr.qld.gov.au

Conveyancing and other costs

Legal costs can vary from a few hundred dollars up to a few thousand, depending on the complexity of the purchase and value of the property.

Building and pest inspections are also a good idea and are sometimes a condition of the loan approval. Regardless, it is wise to conduct these inspections for peace of mind. The cost varies but is usually between $250 and $500. You are advised to seek quotes to get the best price and ensure the company has a good track record.

Filed Under Investing News, Realty News Tagged With cost savings for first home buyers, Costs to buy a home, First home buyers

Use credit card to pay mortgage off quicker

January 3, 2013 Leave a Comment

Credit cards can `save’ you money

By SHIRLEY BROUN

USED wisely, your credit card could help pay the mortgage off quicker. Sounds hard to believe, I know, but it is all in the way you use your credit card.

In fact, master this system of credit card use and you could shave thousands of dollars off your loan and years off your loan term by making your credit card work for you.

Linking a credit card to your mortgage is not a concept that most Australians warm to because it is considered too `risky’ – and it is for some like those who don’t have discipline when it comes to spending. However, there are ways to exploit the features of a credit card without having to run into bad debt.

Putting your card to work in tandem with your offset facility can be a real winner in terms of `savings’ on your mortgage. The concept is simple.

It’s well recognised by industry consumer groups and regulators that the fastest way to pay off a home loan is to make the maximum repayment at the optimal frequency, rather than the minimum required payment once a month or per each statement period. The reason for this is that interest on mortgage loans is calculated daily on the amount you owe and charged monthly in arrears. So by paying more into your loan more frequently you will be paying interest on an amount that is decreasing more rapidly, hence you pay less interest and your loan term reduces.

This is where your ability to offset your mortgage comes in handy. An offset account is essentially a savings account linked to your mortgage, which allows you to offset your savings, salary and other cash resources against the total balance of your home loan. The loan balance is immediately reduced and as interest is calculated daily on the remaining net amount on the loan, interest payable is diminished.

In brief, the key strategies in relation to using your credit card to help achieve these potential mortgage `savings’ are as follows: 1. Put all your salary in your offset account and keep it there; 2. Use a credit card to pay for living expenses; 3. Never spend more on your credit card than you have available in your offset account; 4. Pay off the credit card each month in full; 5. Have your next month’s salary paid into the offset account and start using the newly cleared credit card for transactions.

Filed Under Investing News, Realty News Tagged With credit cards, Using credit cards wisely

Property investment questions

December 30, 2012 Leave a Comment

Do You have a Question?

PROPERTY investment can be a confusing issue. In fact, buying or selling real estate in Australia (or anywhere in the world for that matter) often brings up questions in the minds of those who wish to conduct a transaction … particularly those who are new to real estate such as first home buyers and first investment property buyers or sellers.

If you have any questions relating to real estate, we would welcome your inquiries and will be only too happy to help you with the information you seek. It is important for all parties (buyers and sellers) to obtain as much information as they can before embarking on their desired entry into property investment. If we can help in any way, please contact us via the `contact page’ email. This is a free service.

Filed Under Investing News, Realty News Tagged With Help with property investing, Property investment questions