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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

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

It’s not just houses among gum trees on ¼ acre blocks under threat from the supposed death of the Australian Dream; a report shows man’s best friend is also victim to a shift in where and how we live.

Dog and cat ownership is down across Australia, according to a report from the Australian Companion Animal Council that found high-density living, changing lifestyles and government legislation to blame.

The ACAC paper found that in the past decade Australia’s dog population has decreased by at least 14per cent and its cat population has dropped by about 10 per cent, as latest figures from the Australian Bureau of Statistics shows a decline in the rate of home ownership and rise human population.

Queensland figures from the Office of Economic and Statistical Research reflected the national downturn in pet ownership, with dog ownership in the state falling by 2.1 per cent from 2008 to 2010 as cats dropped by 1.4per cent.

The ACAC paper found slightly more than half of the state’s households accommodated cats and/or dogs in 2010.

And though pooches were more popular than pussies overall, Brisbane was among the survey regions with the lowest proportion of households with dogs.

Speaking from the inaugural Putting Pets Back Into Our Lives thinktank in Sydney, ACAC president Kersti Seksel said the steady decline in pet ownership had brought a $6.02billion pet-care industry to its knees.

But it wasn’t just commerce at risk as communities without pets were worse off as well, Ms Seksel said.

“There’s been lots of research showing pets are not just good for an individual’s physical health and mental health – if you own a dog for instance, you’re less likely to be lonely and more likely to get physical exercise – but you’re also more likely to interact with your community,” she said.

“All pets are down, but we’re focusing particularly on a decline in cat and dog ownership because there’s a lot of research that demonstrates the valuable relationships they share with owners.”

Ms Seksel said the costs associated with maintaining pets, difficulty in finding care during holidays, time constraints and moving to rented accommodation, particularly apartments, were the most common reasons why people no longer included animals in their households.

“There’s a perception that renting or apartment living don’t work with owning a dog but that’s just not true,” she said.

“If you look at America, you see that dog ownership in small space is fine as long as you’re caring properly for the pet.”

A change in Australia’s favourite breed of dog reflected a shift to inner-city living Ms Seksel said, with the diminutive Maltese ousting the German Shepherd from the top spot that the larger dog enjoyed 10 years ago.

Ms Seksel said the 150 participants in today’s Putting Pets Back Into Our Lives conference, including the RSPCA, hoped to find suitable solutions to the problem.

“Whether it’s changing the laws and regulations around pet ownership or educating the public about finding the right pet for them, we want people to realise just how good owning a pet can be,” Ms Seksel said.

Story source: www.domain.com.au

The decision by the State Government to remove the stamp duty home concession will flatten the struggling Queensland residential property market and cost homebuyers thousands of dollars, according to the Real Estate Institute of Queensland (REIQ).

The government announced today that from 1 August the concession which non-first home buyers receive when buying a new or established home as their principal place of residence will be removed. For a median-priced house in Brisbane, homebuyers will now be hit with more than $15,000 in stamp duty – an increase of more than $7,000.

First home buyer stamp duty concessions will remain for homes up to $500,000.

The government also announced a $10,000 grant for new-home builds. The Queensland Building Boost grant will be available for all people building, or buying, a new-build home or unit priced up to $600,000 between 1 August 2011 and 31 January 2012.

REIQ chairman Pamela Bennett said while any incentive to increase housing supply and create jobs in the construction sector is a positive for the economy, the removal of the stamp duty concession for non-first home buyers will wreak havoc on the Queensland property market.

About 60 per cent of all dwellings financed in Queensland in April were to non-first home buyers.
“The market is already the lowest it has been in many years and today’s announcement will just make it worse,” she said.

“The government is obviously trying to fill the financial void that has been left by the weak property market, and the subsequent lower stamp duty receipts given the marked reduction in property sales over the past 18 months.

“A better way to stimulate the economy would have been to provide financial incentives for all buyers of all types of properties which in turn would have increased activity and therefore helped the government’s bottom-line.”

According to the REIQ, the $10,000 grant for new-builds might provide a much-needed shot in the arm for the building sector but its value will be greatly diminished by the increased rates of stamp duty that non-first home buyers will have to pay. It is also unlikely to assist more first home buyers into the market.

“There has been a huge reduction in first home buyer activity over the past year and this grant is unlikely to change that state of affairs to any significant degree,” she said.

“While the grant means first-timers will be able to access $17,000, as well as stamp duty concessions, purchasing a new-build home or unit continues to be out of the financial reach of most prospective homeowners.”

When the First Home Owners Boost was available in late 2008 and throughout 2009, 74 per cent of first home buyers purchased an established home despite $21,000 being available for constructing a new home or the purchase of a new-build.

Quote from Mike Andrew, “It’s lucky we don’t pay our Qld politicians for their brains, the property market is already in a slump and the impost of new taxes is not going to help the industry nor those people who are trying to get into the market. Why didn’t Qld look at the Victorian governments stand on stamp duty and abolish this tax which by the way, was supposed to have been removed when GST was introduced.

Like the good ship Bounty, we have our own Captain Bligh, who by her and her governments greed are destroying industry and small business in this state, the sooner an election is held to get rid of this government the better.”

Ten thousand real estate agents have left the profession in the last year due to a drop in sales and smaller commissions, according to The Australian Financial Review.

The AFR has reported that more real estate agents are leaving the industry than entering as houses are harder to sell on the back of low consumer confidence and increasing interest rates.

Real Estate Institute of Australia president David Airey estimates that the number of agents in the industry has dropped from 60,000 to 50,000 in last year.

"There’s been a huge reduction over the past year," Mr Airey told the AFR.

"There’s been a more recent trend that resignations or business closures are actually exceeding the number of new [REIA] members. Hopefully that’s a short-term trend," he said.

Story source: www.exitfeesmeancompetition.com

First homebuyers across Victoria will save thousands of dollars in stamp duty as the state government makes good on its promise to slash the tax in its first budget.

The government will proceed with its commitment to slash stamp duty by 20 per cent for first home buyers on properties valued less than $600,000 from July 1.

This equates to almost $5,800 in stamp duty savings on the median house price of $565,000.

Real Estate Institute of Victoria chief executive Enzo Raimondo hailed the move as the most significant attempt to help people buy their first home in 10 years.

"Over the last decade there has been a bit of tinkering by the previous government but not much relief," he said.

"It’s a first genuine step to address the affordability issue for first homebuyers."

Before the last election, the coalition promised to halve stamp duty for first homebuyers by 2014.

Mr Raimondo said the government should also overhaul the stamp duty rates.

"Stamp duty needs to be reviewed again and significant changes made because it is double what it was 10 years ago," he said.

Cutting stamp duty will impact on a major source of revenue for the government, with Treasury predicting before the last election the government would collect $3.8 billion from the tax in 2011-12.

Treasurer Kim Wells delivers his first budget on Tuesday.

The Victorian Employers’ Chamber of Commerce and Industry (VECCI) is calling on the government to introduce performance pay incentives for teachers.

VECCI senior policy manager Andrew Rimington said with the flat-lining of Victorian students’ year nine national testing results, lifting the standard of teaching could help turn this trend around.

He said the business sector was concerned too many students were leaving school before finishing year 12.

Mr Rimington said poor numeracy and literacy was particularly an issue in areas of high social disadvantage.

"One of the things we can do is to reward teachers who are performing better and getting results with their students," he told AAP.

"Performance pay is something that’s accepted in the corporate world and the public service and it is worth a try to see how that sort of approach could in fact see changed behaviour."

He said a trial incentive pay program for teachers, along with 1000 retraining scholarships over four years for areas of teacher shortages like maths, would cost up to $16 million over four years.

Mr Rimington said bonuses could be paid to attract teachers to disadvantaged areas.

Low levels of literacy and numeracy among workers was slowing productivity, he said.

"We have got to put in a circuit breaker somewhere to start to address these crucial issues for the existing stock of students in schools now," he said.

© 2011 AAP

The Harcourts property franchise will team up with rural services business Landmark in a bid to challenge the dominance of the Elders real estate brand.

The deal, announced yesterday, will cover both companies’ regional and rural real estate operations by April in the joint venture, Landmark Harcourts.

The new business will include some of Harcourts’ 280 Australian offices and Landmark’s 125 rural real estate branches and is expected to turn over some $20 billion in property sales a year.

The existing Landmark real estate business will be rebranded as a part of an equal-party joint venture that will be ”integrated into the greater Harcourts family,” Harcourts Australasian head Bryan Thomson said.

Since its formation in New Zealand in 1888, Harcourts has established a network of 640 real estate franchises in Australia, Indonesia, South Africa and China.

Landmark’s rural services business operates from 400 locations in Australia.

The new business will incorporate the companies’ rural and regional operations and leave Harcourts’ metropolitan business unchanged.

Story by Simon Johanson www.smh.com.au

At Google one of our key philosophies is to take risks and to experiment. To that end, in July 2009 we announced the ability to find property for sale or rent directly on Google Maps. This is one of the “search options” next to the search box on Google Maps, and is currently available in the US, Australia, New Zealand, the UK and Japan.

In part due to low usage, the proliferation of excellent property-search tools on real estate websites, and the infrastructure challenge posed by the impending retirement of the Google Base API (used by listing providers to submit listings), we’ve decided to discontinue the real estate feature within Google Maps on February 10, 2011.

We’ve learned a lot and been excited to see real estate companies use Google Maps in innovative ways to help people find places to live, such as Coldwell Banker’s use of Google Maps and YouTube, or Realtor.com’s Android app that lets you draw a shape on a map to find all properties you’re interested in.

Yet we recognize that there might be better, more effective ways to help people find local real estate information than the current feature makes possible. We’ll continue to explore this area, but in the meantime, Google offers other options to home-seekers: you can still access other information in Maps such as local businesses, directions and transit times, as well as aerial and Street View imagery to explore where you might want to move, and also use Google search results to find helpful real estate information and websites.

Real estate companies can also continue to use tools from Google to help connect with buyers and renters who use the Internet to research properties. For example, companies can use the Google Maps API to embed customized maps that are useful to potential clients right on their own web pages. Our Google for real estate professionals site contains various methods for generating leads and improving real estate business operations.

Posted by Brian McClendon, VP, Google Earth and Maps

Australia experienced one of the strongest housing markets in the world during 2010, new research shows.

But likely interest rate hikes will slow the market in 2011, the Global Real Estate Trends report predicts.

The report, released by Canada’s Scotiabank, tracked the housing markets in 12 advanced economies throughout 2010.

Home prices increased in Australia, Canada, France, Sweden, Switzerland and the United Kingdom.

They remained flat in Germany and the United States, and fell in Ireland, Italy, Japan and Spain.

Australia led the pack, thanks to relatively-low unemployment and tight housing supply.

But interest rate hikes and a cut to the first homeowners grant slowed a "red-hot" property market in 2010 to some degree, the report said.

Economist Adrienne Warren anticipates the Reserve Bank of Australia will lift interest rates by an additional 75 basis points in 2011.

Australia’s close trade ties with Asia and resource wealth would continue to underpin a solid pace of domestic activity.

"Higher interest rates will worsen already strained affordability," Ms Warren said in a statement.

Canada’s market also fared well, but was "one of the most volatile" expected to be tempered by more moderate employment and income growth in 2011.

The UK property market staged a strong early-year recovery while Germany’s decade-long housing slump also came to an end.

But it was a different story in Spain, Ireland and Italy, where the market continues to fall.

Japan’s two-decade long property slump continued in 2010, and is expected to slump further in 2011 on the back of a weaker economy.

The surprise result came from the US where the housing market stabilised.

That trend is expected to continue, with the report predicting the US Federal Reserve to maintain its record-low 0.25 per cent rate through the end of 2011.

Source: www.ninemsn.com.au

ELDERS has scrapped its usual practice of publicising internal financial forecasts.

The move comes after the company unveiled a $217 million annual loss following a string of profit warnings.

While the rural services provider claims to have turned its operating performance around, delivering on its latest guidance provided in June, its underlying profit of $3m was far from the $55.7m profit promised late last year when it undertook a $550m equity raising.

Three of Elders’ four business divisions — rural, forestry and corporate — saw sales and earnings plummet during the year to September 30 due to lower demand in drought-affected areas, pricing pressures and a subdued real estate market.

Significant non-recurring items of $220m included plantation and property revaluations and a write-down from the collapse of Forest Enterprises Australia. The poor result saw most of the company’s management team forgo their short-term bonuses.

However, Elders boss Malcolm Jackman has insisted that recent trading showed the company was on track for an improvement next year.

He said the past three months had seen extensive efforts regarding the Cost to Serve project, which is aiming to re-align business expenses with changed market conditions, with a 9 per cent reduction in full-time staff achieved so far.

Elders has declined to provide specific guidance for the year ahead, citing the "inherent uncertainty" of seasonal and market conditions.

Shares, which have shed two-thirds of their value this year, closed up half a cent at 62.5c.

Story by Rebecca Urban www.theaustralian.com.au