Homebuyers have shrugged off concerns about global financial markets to push weekend clearance rates close to levels not seen since the housing boom of 2003.
And this month's interest rate rise appears to have had little impact on the auction market, according to Michael McNamara, general manager of researcher Australian Property Monitors.
Nationwide
On Saturday, 69 per cent of Sydney homes offered at auction were sold, while in Adelaide the clearance rate was 80.4 per cent.
In Melbourne, agents reported a clearance rate of 84 per cent. One inner city Melbourne agency, Kay & Burton, notched up the best one-day result in its history, achieving almost $29 million from seven properties. The top sale was one of Toorak's oldest homes at 14 Maple Grove that went under the hammer for $9.11 million.
In Brisbane, agents said the market was hot, with one property in riverside Woolloongabba selling for more than $1 million.
But Mr McNamara sounded a note of caution, saying there may be a delayed reaction to the interest rate rise with some pain felt down the track in lower to middle income families.
"Some decision making may be delayed on speculation of another rate rise", he said.
Property market 'safe'
Frank Gelber, chief economist for BIS Shrapnel, predicted property would ride out the current stock market turmoil.
He said investors, and even home owners, had little to worry about because property wouldn't suffer.
"Don't panic is my advice," Mr Gelber told The Australian. "It's going to mean very little for property."
In fact, Mr Gelber said property might benefit from the stock market chaos because money that would otherwise go into shares would be invested in property. At a residential level, that would help to boost sluggish housing markets in parts of Australia.Source: The Australian
Sunday, August 26, 2007
Sunday, August 12, 2007
Wespac mortgage rates increase
Wespac bank, one of Australia's major banks has announced changes to its mortgage home loan interest rates in response to this week's rise in official rates.
Westpac says it will raise variable home loan rates and business lending rates by 0.25 of a percentage point.
Its standard variable home loan rate is being set at 8.32 per cent.
The bank is also putting up some of its deposit rates by 0.3 per cent.
The changes are effective from Friday, August 10th 2007.
Source: ABC
Westpac says it will raise variable home loan rates and business lending rates by 0.25 of a percentage point.
Its standard variable home loan rate is being set at 8.32 per cent.
The bank is also putting up some of its deposit rates by 0.3 per cent.
The changes are effective from Friday, August 10th 2007.
Source: ABC
Monday, August 06, 2007
Howard Federal Government credibility crisis on mortgage interest rates
South Australia's Premier says the Federal Government is not believed by voters when it blames the states for mortgage interest rate rises.
South Australia's Premier Mike Rann says the electorate will not accept the Federal Government's claim that the states are to blame for interest rate rises.
The Commonwealth is running an advertising campaign claiming that debt taken on by the states is putting upward pressure on rates.
Mr Rann says the public has stopped believing the Federal Government a long time ago.
"Apparently the new formula is that when interest rates go down that's John Howard's responsibility and when they go up it's the states," he said.
"The fact is is that states' borrowings are the lowest they've been for 50 years so this one won't wear. I mean it's a sign of desperation."
South Australia's Premier Mike Rann says the electorate will not accept the Federal Government's claim that the states are to blame for interest rate rises.
The Commonwealth is running an advertising campaign claiming that debt taken on by the states is putting upward pressure on rates.
Mr Rann says the public has stopped believing the Federal Government a long time ago.
"Apparently the new formula is that when interest rates go down that's John Howard's responsibility and when they go up it's the states," he said.
"The fact is is that states' borrowings are the lowest they've been for 50 years so this one won't wear. I mean it's a sign of desperation."
Friday, August 03, 2007
Mortgage shopper beware as ASIC to crackdown on advertised property investment schemes
Television advertisements promoting property schemes may need to come with a warning and the schemes' prospectuses assessed by ratings agencies.
University of Melbourne professor Ian Ramsay, a corporate law and securities regulation specialist, says an independent agency could be brought in to conduct a risk evaluation of property scheme prospectuses.
These agencies would also track related-party transactions and assess how secure the investment would be.
Risk assessments could then be incorporated into the television advertisements.
"People are investing on the basis of a 30-second advertisement," Professor Ramsay says. "The risk evaluation might be part of the advertisement."
The Australian Securities and Investments Commission will this month release an update on its plans to investigate companies deemed to be offering high-risk financial products.
ASIC has identified 83 unlisted and unrated debenture issuers, with about $8 billion of investors' funds, that it considers to be high risk. But it has refused to name them, claiming this would be "prejudicial".
An ASIC spokeswoman said ASIC chairman Tony D'Aloisio would probably be releasing his update around the middle of the month.
But the update will be just that — it will not contain a water-tight model to stop more business failures. Instead, a special team has been set up to develop the plan, which will take 12 months to finalise.
About 20,000 investors around Australia have fallen victim to property-related companies Westpoint, Bridgecorp, ACR and Fincorp, which imploded owing more than $800 million. Yesterday, South Australian mortgage business John West was placed in liquidation.
While the products were a lot riskier than some investors realised, some of the other big problems might include lack of development expertise and the dearth of disclosure on related-party transactions, a critical gap because many of the companies were part of a web of related companies. Often investors' funds were lent at higher rates to related companies.
Stuart Wilson, chief executive of the Australian Shareholders Association, said ASIC needed to focus more on the advertisements.
"We have a strong suspicion retail investors are investing because of the advertisements being pitched, rather than the details of the prospectuses," Mr Wilson said.
He said the evidence of that lay in the way investors were shocked when they discovered their funds were not guaranteed and that the investments were riskier than they had believed. "There was also a lack of understanding of the business models behind the schemes."
He said ASIC could have been more proactive but there were limits to how far it could protect investors. "While ASIC could have done more around the monitoring of the advertisements, they shouldn't be held responsible when investors lose money."
Source: The Age
University of Melbourne professor Ian Ramsay, a corporate law and securities regulation specialist, says an independent agency could be brought in to conduct a risk evaluation of property scheme prospectuses.
These agencies would also track related-party transactions and assess how secure the investment would be.
Risk assessments could then be incorporated into the television advertisements.
"People are investing on the basis of a 30-second advertisement," Professor Ramsay says. "The risk evaluation might be part of the advertisement."
The Australian Securities and Investments Commission will this month release an update on its plans to investigate companies deemed to be offering high-risk financial products.
ASIC has identified 83 unlisted and unrated debenture issuers, with about $8 billion of investors' funds, that it considers to be high risk. But it has refused to name them, claiming this would be "prejudicial".
An ASIC spokeswoman said ASIC chairman Tony D'Aloisio would probably be releasing his update around the middle of the month.
But the update will be just that — it will not contain a water-tight model to stop more business failures. Instead, a special team has been set up to develop the plan, which will take 12 months to finalise.
About 20,000 investors around Australia have fallen victim to property-related companies Westpoint, Bridgecorp, ACR and Fincorp, which imploded owing more than $800 million. Yesterday, South Australian mortgage business John West was placed in liquidation.
While the products were a lot riskier than some investors realised, some of the other big problems might include lack of development expertise and the dearth of disclosure on related-party transactions, a critical gap because many of the companies were part of a web of related companies. Often investors' funds were lent at higher rates to related companies.
Stuart Wilson, chief executive of the Australian Shareholders Association, said ASIC needed to focus more on the advertisements.
"We have a strong suspicion retail investors are investing because of the advertisements being pitched, rather than the details of the prospectuses," Mr Wilson said.
He said the evidence of that lay in the way investors were shocked when they discovered their funds were not guaranteed and that the investments were riskier than they had believed. "There was also a lack of understanding of the business models behind the schemes."
He said ASIC could have been more proactive but there were limits to how far it could protect investors. "While ASIC could have done more around the monitoring of the advertisements, they shouldn't be held responsible when investors lose money."
Source: The Age
Wednesday, August 01, 2007
Growth targest needed as suburbs sprawl causing infrasrtucture strain
Suburban sprawl and urban regeneration are changing the face of our cities as we strive to meet the demands of population increases and lifestyle.
But is all growth necessarily good growth? And who's looking after the interests of future generations as we meet the challenge of change? This week, The Courier-Mail revisits its Our Future, Your Say series, aimed at targeting issues such as growth, transport, city living and climate change.
It will be run with Channel Nine, Griffith University's Urban Research Program and The Brisbane Institute.
Our panels of high-profile speakers include Treasurer and Minister for Infrastructure Anna Bligh, Lord Mayor Campbell Newman and Deputy Mayor David Hinchliffe.
The series kicks off on August 8 with a forum entitled What Price Growth? which questions growth targets in the south-east.
Other forums include The Great Climate Change Debate, about climate change and sustainability, and The Sardine City, where we will discuss density in the inner suburbs.
The Future of the Car will be discussed at the fourth forum on September 26, followed by Generation Y - a look at the next generation of leaders in the city - and What's So Special About Brisbane - preserving the essence of the city, despite the growth.
Have your say in the special Courier Mail series by emailing ourfuture@thecouriermail.com.au
Forum 1: What Price Growth?
August 8, 6.30pm, Customs House
Speakers include:
Treasurer and Minister for Infrastructure Anna Bligh Guy Gibson, general manager - affordable housing and sustainability - Lend Lease Communities writer-actor William McInnes Griffith University associate lecturer Cheryl Paten Forum 2: The Sardine City - Living Closer Together
August 29, 5.30pm, Irish Club, City
Speakers include:
Deputy Mayor David Hinchliffe Conics chairman Jim McKnoulty Forum 3: The Future of the Car - Transport, Tolls and Tired Commuters
September 26, 5.30pm, Customs House
Speakers include:
Lord Mayor Campbell Newman RACQ CEO Ian Gillespie Griffith University Urban Policy Program research fellow Jago Dodson.
Source: Courier Mail
But is all growth necessarily good growth? And who's looking after the interests of future generations as we meet the challenge of change? This week, The Courier-Mail revisits its Our Future, Your Say series, aimed at targeting issues such as growth, transport, city living and climate change.
It will be run with Channel Nine, Griffith University's Urban Research Program and The Brisbane Institute.
Our panels of high-profile speakers include Treasurer and Minister for Infrastructure Anna Bligh, Lord Mayor Campbell Newman and Deputy Mayor David Hinchliffe.
The series kicks off on August 8 with a forum entitled What Price Growth? which questions growth targets in the south-east.
Other forums include The Great Climate Change Debate, about climate change and sustainability, and The Sardine City, where we will discuss density in the inner suburbs.
The Future of the Car will be discussed at the fourth forum on September 26, followed by Generation Y - a look at the next generation of leaders in the city - and What's So Special About Brisbane - preserving the essence of the city, despite the growth.
Have your say in the special Courier Mail series by emailing ourfuture@thecouriermail.com.au
Forum 1: What Price Growth?
August 8, 6.30pm, Customs House
Speakers include:
Treasurer and Minister for Infrastructure Anna Bligh Guy Gibson, general manager - affordable housing and sustainability - Lend Lease Communities writer-actor William McInnes Griffith University associate lecturer Cheryl Paten Forum 2: The Sardine City - Living Closer Together
August 29, 5.30pm, Irish Club, City
Speakers include:
Deputy Mayor David Hinchliffe Conics chairman Jim McKnoulty Forum 3: The Future of the Car - Transport, Tolls and Tired Commuters
September 26, 5.30pm, Customs House
Speakers include:
Lord Mayor Campbell Newman RACQ CEO Ian Gillespie Griffith University Urban Policy Program research fellow Jago Dodson.
Source: Courier Mail
Mortgage interest rate rise more likely as private debt spirals
Private debt is growing faster than at any time since the last days of the 1980s property boom, increasing the likelihood of another rate rise next week.
The $27.4 billion lift in debt in June was shared among businesses, homebuyers and high earners pumping the maximum $1 million into superannuation ahead of the June 30 deadline.
The increase in debt last month, reported yesterday by the Reserve Bank, was the fastest since November 1989, when home loan interest rates hit 17 per cent under the Hawke Labor government.
The Reserve Bank board is meeting next Tuesday and is expected by financial markets to raise its benchmark cash rate by a quarter of a point to 6.5 per cent.
"If there was not much doubt about a tightening next week, there is less after these numbers," HSBC chief economist John Edwards said yesterday.
The expected rise would push a standard mortgage rate to 8.3 per cent, the highest level since November 1996.
The Reserve Bank has used the rapid growth in borrowing as part of its justification for each of the past three interest rate increases.
Raising interest rates only lowers inflation by reducing the appetite of both business and households for debt-funded spending.
Some of the leap in borrowing in June will be reversed next month. Personal debt soared $5.5 billion in June, the biggest increase on record, as high-income earners borrowed to buy shares and managed fund units to put into their superannuation.
Personal borrowing normally rises by about $2 billion a month, and probably returned to this level in July.
However, the Reserve Bank will be concerned that home buyers are also taking on new debt at a rapid rate, borrowing $12.1 billion in June. This was the biggest monthly increase in mortgage debt since March 2004.
Business took on another $9.9 billion in debt, with the 18.7 per cent growth in borrowing over the past year the fastest since June 1989. "It's the business lending increase which will attract RBA governor Glenn Stevens's eye," Mr Edwards said.
Deutsche Bank chief economist Tony Meer said that although tax planning for the end of the financial year by high-income individuals had added to the surge of borrowing in June, there has been a steady increase in the growth of borrowing since the end of last year.
"Interest rates are not seriously dampening the appetite for borrowing," he said.
Mr Meer said the Reserve Bank was likely to raise rates at least twice over the next 12 months.
The Australian Bureau of Statistics released new home approvals figures yesterday, showing a slow recovery in building levels from the dip caused by the rate rises last year.
"The new housing sector is still struggling to gain traction under the weight of record low housing affordability," Housing Industry Association chief economist Harley Dale said.
The total number of new dwellings approved jumped by 7.5per cent in June, but this was influenced by the level of approvals for new apartments, which vary widely every month.
Trend figures calculated by the ABS show that the number of approvals for private houses has been creeping higher at a rate of just 0.2 per cent a month, while the number of approvals for apartment blocks rose by 0.8 per cent last month.
Source: The Australian
The $27.4 billion lift in debt in June was shared among businesses, homebuyers and high earners pumping the maximum $1 million into superannuation ahead of the June 30 deadline.
The increase in debt last month, reported yesterday by the Reserve Bank, was the fastest since November 1989, when home loan interest rates hit 17 per cent under the Hawke Labor government.
The Reserve Bank board is meeting next Tuesday and is expected by financial markets to raise its benchmark cash rate by a quarter of a point to 6.5 per cent.
"If there was not much doubt about a tightening next week, there is less after these numbers," HSBC chief economist John Edwards said yesterday.
The expected rise would push a standard mortgage rate to 8.3 per cent, the highest level since November 1996.
The Reserve Bank has used the rapid growth in borrowing as part of its justification for each of the past three interest rate increases.
Raising interest rates only lowers inflation by reducing the appetite of both business and households for debt-funded spending.
Some of the leap in borrowing in June will be reversed next month. Personal debt soared $5.5 billion in June, the biggest increase on record, as high-income earners borrowed to buy shares and managed fund units to put into their superannuation.
Personal borrowing normally rises by about $2 billion a month, and probably returned to this level in July.
However, the Reserve Bank will be concerned that home buyers are also taking on new debt at a rapid rate, borrowing $12.1 billion in June. This was the biggest monthly increase in mortgage debt since March 2004.
Business took on another $9.9 billion in debt, with the 18.7 per cent growth in borrowing over the past year the fastest since June 1989. "It's the business lending increase which will attract RBA governor Glenn Stevens's eye," Mr Edwards said.
Deutsche Bank chief economist Tony Meer said that although tax planning for the end of the financial year by high-income individuals had added to the surge of borrowing in June, there has been a steady increase in the growth of borrowing since the end of last year.
"Interest rates are not seriously dampening the appetite for borrowing," he said.
Mr Meer said the Reserve Bank was likely to raise rates at least twice over the next 12 months.
The Australian Bureau of Statistics released new home approvals figures yesterday, showing a slow recovery in building levels from the dip caused by the rate rises last year.
"The new housing sector is still struggling to gain traction under the weight of record low housing affordability," Housing Industry Association chief economist Harley Dale said.
The total number of new dwellings approved jumped by 7.5per cent in June, but this was influenced by the level of approvals for new apartments, which vary widely every month.
Trend figures calculated by the ABS show that the number of approvals for private houses has been creeping higher at a rate of just 0.2 per cent a month, while the number of approvals for apartment blocks rose by 0.8 per cent last month.
Source: The Australian
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