Fixed Interest Rates More Appealing
May 21st
Fixed interest rates have recently fallen to an all-time low. Some lenders across Australia are now offering three year fixed rates below 5%. By comparison, the big financial institutions are still offering standard variable rates at more than 5.7%, even after the usual 0.7% discount.
However, according to the latest Australian Bureau of Statistics (ABS) data, only 12% of home buyers who have taken out a mortgage this year have locked their loans in at a fixed rate.
Fixed rates are certainly looking more appealing this year especially when the numbers are crunched. For example, if the average discounted variable rate remained unchanged (and many experts believe they will not fall any lower), a household which had a $300,000 loan would pay nearly $8000 more in interest over three years than a family that fixed at 4.99%. That’s not just loose change!
Variable interest loans tend to be more popular in Australia, they normally offer greater flexibility than a fixed loan and this makes them appealing. But for those who are currently shopping for a new mortgage it is well worth considering all the options, and that includes fixed rate loans. Discussing such an important decision with a mortgage expert is also a More >
Fixed Interest Rates More Appealing
May 21st
Fixed interest rates have recently fallen to an all-time low. Some lenders across Australia are now offering three year fixed rates below 5%. By comparison, the big financial institutions are still offering standard variable rates at more than 5.7%, even after the usual 0.7% discount.
However, according to the latest Australian Bureau of Statistics (ABS) data, only 12% of home buyers who have taken out a mortgage this year have locked their loans in at a fixed rate.
Fixed rates are certainly looking more appealing this year especially when the numbers are crunched. For example, if the average discounted variable rate remained unchanged (and many experts believe they will not fall any lower), a household which had a $300,000 loan would pay nearly $8000 more in interest over three years than a family that fixed at 4.99%. That’s not just loose change!
Variable interest loans tend to be more popular in Australia, they normally offer greater flexibility than a fixed loan and this makes them appealing. But for those who are currently shopping for a new mortgage it is well worth considering all the options, and that includes fixed rate loans. Discussing such an important decision with a mortgage expert is also a More >
Getting What You Pay For
May 17th
Sue and Peter loved their spacious family home of 15 years, but it was time to downsize and find something with a smaller more manageable garden. After meeting with several real estate agents they decided to use the one who offered them a discount on his commission. They were pleased with their choice and looked set to save several thousand dollars once the property sold.
Despite the concession, Sue and Peter were still expecting their agent to work conscientiously in sourcing potential buyers as well as negotiating the best possible price when an offer was presented.
Unfortunately, it did not take Sue and Peter long to realise they had employed a poor negotiator who also lacked motivation in finding a suitable buyer. The agent was unable to successfully negotiate with the interested parties and ultimately the few thousand dollars they saved on commission quickly disappeared when their home eventually sold well below their expectations. It was a frustrating and disappointing process for a couple who were selling their biggest asset.
Sue and Peter’s experience is not uncommon. We all like the thought of saving some money and some real estate agents will go to any lengths to win over vendors. A great More >
Bumper March Quarter
May 14th
Melbourne’s property market recently completed the strongest March quarter in over a decade. Latest Real Estate Institute of Victoria (REIV) data reveals a robust 5% increase in the median house price from $534,000 in December 2012, to $561,500 in March. The regional median house price also increased, by a more moderate 2.1% from $305,000 to $311,500 – but a positive result never-the-less.
Importantly, there was an upward turn in buyer numbers during the December quarter which has continued throughout the latest March quarter. This has led to higher sales volumes, higher prices and better clearance rates.
According to the REIV, analysis of the latest figures indicates that there are a number of factors increasing demand: healthy population growth, improved consumer confidence, better affordability and low interest rates.
A steady rise in the number of newly completed homes and apartments, particularly in the outer suburbs and inner city areas, has allowed adequate supply and may act to constrain substantial price growth, in those parts of Melbourne at least, over the remaining months of 2013. Further growth will be reliant on ongoing improvements in consumer sentiment.
A quick glance at recent clearance rates also highlights the markets overall improvement. This March the rate was More >
First Home Owners Grant on its Way Out
May 10th
With only two months to go until the $7,000 First Home Owners Grant is abolished, most Victorians see it as a blow for buyers still planning to purchase their first home.
Real Estate Institute of Victoria (REIV) CEO Enzo Raimondo said that whilst first home buyers would benefit from the newly introduced 40% stamp duty cut, those buying an existing home would still be worse off after 1 July.
“The majority of first home buyers – around 70% in the March quarter – prefer to choose established homes. Right now, first home buyers benefit from $12,691 in combined government assistance on a $450,000 home, but after 1 July that will drop by $5,103,” he said.
Industry experts largely agree that assisting first home buyers by cutting their stamp duty bills is by far the most efficient and effective form of assistance. However, the state government should have used its existing policy to ensure no first home buyer will be worse off under the coming changes.
A great number of first home buyers take several years to save a deposit for their dream house, only to spend a large chunk of it on stamp duty. Rather than continually adjusting assistance and grants, More >
RBA Lowers Cash Rate .25 Basis Points
May 7th
At its meeting today, the Board decided to lower the cash rate by 25 basis points to 2.75 per cent, effective 8 May 2013.
The global economy is likely to record growth a little below trend this year, before picking up next year. Among the major regions, the United States continues on a path of moderate expansion and China’s growth is running at a more sustainable, but still robust, pace. Japan has announced significant new policy initiatives aimed at strengthening demand and ending deflation. The euro area remains in recession. Commodity prices have moderated a little in recent months though they remain high by historical standards.
Financial conditions internationally continue to be very accommodative, with risk spreads reduced, funding conditions for most financial institutions improved and borrowing costs for well-rated corporates and sovereigns exceptionally low.
Growth in Australia was close to trend in 2012 overall, but was a bit below trend in the second half of the year, and this appears to have continued into 2013. Employment has continued to grow but more slowly than the labour force, so that the rate of unemployment has increased a little, though it remains relatively low.
With the peak in the level of resources More >
RBA’s Cash Rate Likely to Stay On Hold
May 7th
The Reserve Bank of Australia is expected to keep the cash rate unchanged at three per cent on Tuesday.
None of the 13 economists surveyed by AAP last week expect the RBA to cut its interest rate at its board meeting, though most say rate cuts are on the cards this year.
Expectations of further rate cuts have grown in the past month following a rise in the unemployment rate and disappointing home building approvals figures, as well as news inflation remains under control.
National Australia Bank senior economist David de Garis believes the RBA will do more to stimulate the economy this year and is expecting two rate cuts by December.
But he thinks the central bank is likely to wait until June to cut again.
That would allow them to see another round of employment and retail sales figures as well as key capital expenditure figures for the March quarter – a key indicator on when investment in the mining industry will peak.
"There’s quite a lot of water to flow under the bridge before June, it doesn’t sound like they are in a super hurry right now so they might be inclined to hold off for another month," he said.
Story by AAP; Story More >
Autumn Gardening
May 2nd
Autumn can be a productive time in the garden. It is an opportunity for planting all kinds of trees and shrubs. The air is cooler but the soil still holds warmth – ideal conditions for plants to establish themselves.
Plant shade trees now, and pick out your favourite sasanqua camellias and roses while they’re in flower. It’s also the best time to transplant evergreen shrubs and trees you’d like to move, and to divide agapanthus, kangaroo paws, bearded and wild iris. The secateurs and shears should also get a real workout during autumn, tidying perennials, getting rid of dead wood and cutting back vines to promote healthy new growth.
Spring bulbs are now in the shops and are a fantastic way to add a huge splash of colour and scent to your spring garden. Choose large, firm specimens and plant them in generous clumps for visual impact. Some of the best bulbs include freesia, gladiolus, jonquil, corn lily (Ixia), snowflake (Leucojum) and harlequin flower (Sparaxis). Bulbs suitable for growing in pots include miniature daffodils, soldier boys (Lachenalia) and hyacinths.
For those gardeners with a veggie parch autumn is a great time to sow seeds of carrots, peas, rocket, beetroot, English spinach and More >
Getting the right home and contents insurance
Apr 30th
Home and contents insurance for home owners, and landlord insurance for investors, can be expensive. But the insurance market is more competitive than ever with many companies willing to negotiate to win your business.
Independent websites that compare policies and rates are a great place to start. Once you have a firm quote, you can then ring around to obtain further figures. But as with any policy, “the devil is in the detail”, so be sure to read the fine print.
When reviewing or taking out a policy, assessing your risk is the first step to ensuring the correct cover. For example, if you live next to a forest or river, home and contents insurance should include protection from bushfire and flood.
Another important step in the insurance process is being realistic about the value of the items you are covering. As many as 80% of Australians are underinsured according to experts. Be realistic, even if it means a slightly higher premium, and review your assets every 12 months.
Other insurance tips include: pay monthly to spread the cost over 12 months, keep a logbook of valuables in your home that are covered under your contents policy and finally, if you do More >
Top 10 tips for buying solar power
Apr 30th
The Clean Energy Council recommends the follow these top 10 tips when buying a solar power system:
Be an informed consumer.Research your options, be clear on your needs and compare quotes.
Know your daily electricity consumption.By understanding what you use, you can assess how much you would like your solar system to generate, depending on your budget.
Get an estimate of how much energy your system will generate.Your contract should include an estimate of the average daily output of your system in kilowatt-hours (based on where you live and the size and position of your system).
Check with your electricity retailer.Never purchase a solar system without knowing what rate you will be paid for the electricity you generate and whether this will affect any hourly rates in your electricity bill.
Always use a Clean Energy Council Accredited Installer.You can check your installer is accredited.
