The Reserve Bank of Australia has cut its growth and inflation forecasts as non-mining sectors struggle under the weight of a high Australian dollar.

In forecasting marginally lower growth rate of 3 per cent for 2012 and 2013, the RBA has signalled that earlier predictions were overly optimistic.

The central bank’s latest quarterly statement on monetary policy comes three days after it cut the official cash rate by 50 basis points because of lower inflation and the need to stimulate parts of the economy.

“Although three months ago a range of indicators were suggesting that economic growth was close to trend, the outcome for 2011 as now reported was, in fact, somewhat weaker than that,” the statement said.

In the previous statement, issued in February, the economy had been forecast to grow at 3 to 3.5 per cent.

Federal Treasurer Wayne Swan says the statement indicates Australia’s economy is strong, and he remains committed to delivering a budget surplus next week.

“We’ve got contained inflation, we’ve got solid growth, we’ve got growth around trend, and we’ve got record levels of mining investment,” Mr Swan said.

“Now this is in stark contrast, as the Reserve Bank points out, to conditions in most other developed economies.” The Reserve Bank expects employment growth to “remain subdued” in the near term and has cited the high Australian dollar as a key pressure.

“There is the possibility that in the near term, labour shedding across a range of industries outside of the mining sector accelerates as firms continue to adjust to the high exchange rate, weaknesses in the property market and the effects of weaker public demand.” And as the dollar bites, Prime Minister Julia Gillard has announced plans to hold an economic forum in June to discuss the economic impact of the strong currency.

Ms Gillard says the forum will include representatives from business, unions, community organisations and state governments.

The Reserve Bank also pointed to a subdued housing market and says “a recovery in housing construction is unlikely in the near term”.

“What remains is for buyers to reach a point where they have sufficient confidence to commit to contracts for construction of new dwellings and for the supply side of the housing market to be responsive to demand,” the RBA said.

The RBA says those conditions are needed to underpin a sound recovery in construction.

The central bank has also revised its inflation outlook to 2.5 to 3.5 per cent in the next year, with underlying inflation down to just 2 per cent from its previous forecast of 2.5 per cent, while noting the sharp fall in CPI inflation to 1.6 per cent.

The RBA expects the introduction of the carbon price in July to boost headline inflation by 0.7 percentage points in the year to July 2013.

“A key assumption made here is that there are no second-round effects owing to higher margins or wage claims,” the statement says.

Backing the banks The RBA has also confirmed claims by commercial banks that funding costs remain high.

“They remain higher than in mid-2011.

At the same time, elevated competitive pressures have kept deposit rates in Australia high relative to the cash rate.” The RBA says a significant external risk to its outlook is the chance that the sovereign debt crisis in Europe could intensify and derail the global economic recovery.

“A substantial deterioration of conditions in Europe would be likely to have flow-on effects to the rest of the world,” the statement said.

“A major flight from risk in global capital markets would see a marked deterioration in credit conditions and confidence.” The Reserve Bank holds its next board meeting on June 5, and some economists are tipping a further reduction in the cash rate to 3.50 per cent.

There are three reasons why properties don’t sell – price, presentation and marketing.

If the price is wrong, you can have a booming market and superb presentation but the property can sit unsold for 12 months.

If it’s poorly presented but well-priced, it will still sell, but there’s definitely a positive emotional impact of having a well-presented home that looks and feels right.

And marketing? Well, if you don’t get the right buyer to the doorstep of the property then you’re not going to sell it. If your home is well-presented and well-priced but you haven’t stimulated enough buyer interest, again, it’s going to sit around.

Therefore, you should put your efforts into pricing the home well, making an excellent presentation and ensuring you have a good marketing program.

If your property isn’t selling, you need to take stock of what’s gone wrong. Sit down with your agent and have a look at the variables. Was the presentation up to scratch? Did you achieve sufficient coverage with your marketing? Was your asking price realistic?

From my experience, price is the culprit in 80% of failed sales. By the time most vendors get their property on the market, it’s presented as well as it’s ever going to be. And they usually have an adequate marketing program, especially if it was an auction sale.

So you’ll need to ask yourself whether the asking price was too optimistic. What were the offers that came in? Often a vendor will be a bit reluctant when an offer comes in. Perhaps they’re expecting $600,000 and someone offers $540,000. They’re disappointed and perhaps a little anxious. But if no one else has made an offer they might want to start considering whether $540,000 is really what the home is worth.

You should also look at your agent’s performance. Has your agent done everything possible? Did they fulfil all their promises? Do you feel they represented your property with enthusiasm, energy and integrity? Don’t be too hasty to blame the agent though, because they’re paid by commission, so every single day they’re focused on getting a result that works for you. But if you’ve lost faith in your agent or they didn’t deliver on their promises, it’s probably time to move on.

Once you and the agent have debriefed, you can consider the options for going forward. But before you commit to doing anything, it’s a good idea to pause for a breather because you’re probably a bit flat and have lost momentum. You need to recover your positive energy – or your lack of enthusiasm can negatively impact the sale. I’ve found taking the home off the market for a few weeks is sometimes quite effective.

If your pricing has been out of whack, you can continue the sale via private treaty with your new asking price, or you can go to auction. Vendors who have already had their home passed in at auction may be reluctant to go through the experience again. But I’ve actually had huge success re-auctioning properties.

If you’ve got the price, presentation and marketing right, offers will start to come in but they don’t last forever. By the time a buyer puts in an offer for a home, they’re really excited about owning it. But in the face of rejection or procrastination by the vendor, their enthusiasm can quickly fade. They’ll often start talking themselves out of it. So it’s a good idea to respond to any offers promptly.

Seasonal factors can also influence the successful sale of your property. Traditionally, the hottest times to sell are in Autumn and Spring, so today’s market is ideal from a seasonal point of view.

RP Data – Rismark Home Value Index Release
Australia’s housing market is showing signs of stabilising after home values rose 0.2 per cent in March. Not only has the market remained unchanged for the quarter ending 31 March 2012, it is also level with the 31 November 2011 home values across the combined capital cities. The flat result over the quarter is the strongest result since March 2011 when values increased by 0.7 per cent. RP Data’s research director, Tim Lawless points out that while the quarterly result was an improvement on recent quarters, the Sydney housing market has been the primary growth driver.
“Looking at the quarterly results on a more granular basis, the improved conditions over the March quarter can largely be attributed to the performance of Australia’s largest housing market, Sydney, where values rose 1.1 per cent over the quarter. Values were down across many of the other capital cities over the quarter with the most significant drop recorded in Adelaide where dwelling values were down 1.5 per cent,” Mr Lawless said.
According to the managing director of Rismark International, Ben Skilbeck, “While the housing market remains soft, the zero per cent change over the first quarter of 2012 demonstrates that it is consolidating its position following the decline seen in calendar year 2011. This month it was the resource rich states which delivered the strongest gains with Perth, Darwin and Brisbane up 1.4 per cent, 1.1 per cent and 0.8 per cent respectively”.
Over the twelve months ending March 31, capital city home values are down 4.4 per cent with the largest falls being recorded in Hobart (-7.3 per cent), Brisbane (-6.1 per cent), Adelaide (-5.7 per cent) and Melbourne (-5.4 per cent). Despite the fall in Melbourne home values they are still up 45.5 per cent since the start of 2007. At the other end of the spectrum, Canberra continues to show the most resilience with values down just -0.3 per cent over the year.
According to Mr Skilbeck there are a number of factors pointing towards an improvement in housing market conditions over recent months.

Is it too late to invest if you haven’t started before hitting the big four-zero?
Not by a long stretch. Here is a step-by-step guide for anyone over 40 looking to get started in property investment to have a nest egg before retirement.

In 2012, the concepts outlined in the guide generally follow from the assumption that the would-be property investor owns their own home, and therefore has some level of equity available to help them get started in investment.

Step 1: Get the right mindset

It is most likely that you need at least 10 years to get a good outcome, and 15 is fantastic, then after 40 it becomes all about how much time you have and what your goal is. Most people won’t be able to rely on their superannuation as the only source of income to retire on.

Step 2: Establish your attitude to risk

Different investors have different appetites for risk and those risk profiles should be a major factor in deciding on an investment strategy. Your risk profile will determine:

• the loan-to-value ratio (LVR)
you’re prepared to use to invest

• the amount of debt you’re

comfortable with and

• the type of property you’re
prepared to buy.

Investors over 40 should be more inclined towards a lower-risk strategy, as they can’t really “start again” if they’re financially crippled. This means lower LVRs, lower borrowing and buying standard residential rather than riskier niche market properties.

Step 3: Set your goals

When do you want to retire? How much money do you think you’ll need to live off? These might be questions you’ve put off or ignored up until now, but before buying investment property it’s time to confront them. It’s all about goals –you need to determine how much money you’ll need in retirement and when retirement actually is. Many people will want to reduce working hours rather than ceasing working altogether which has a positive impact on your retirement funding. Investors need to think non-financially first. That is, what lifestyle they want, holidays, how much they want to work and so on. Then they can translate that into dollars.

Step 4: Select your property strategy

Once you know where you want to be in 10 or 15 years’ time, you need to map out a course to get you there. The first step is to get educated and the next step is to surround yourself with a good team – Get a good accountant, a good property solicitor, a good finance broker, as well as a good property agent and property manager. Investors may look to research and consider

different approaches to the property market, such as capital growth, negative gearing, positive cash flow, renovation, subdivision and small development. Other steps to take include checking your borrowing capacity and establishing how much equity you have available to use. According to the experts, as far as choosing an investment strategy goes, it’s best to keep things simple. The combination of leverage and high-growth property can’t be beaten in terms of supercharging a retirement strategy.

Step 5: Develop a retirement strategy

It’s important for later starters in property to consider how you might make the transition to retirement and fund your living expenses before they even start investing. This is because the ultimate plan may have an impact on the structures used to acquire
and hold property.

Step 6: Start implementing & tracking your plan

This is perhaps the most vital step of all, especially for those who haven’t taken action at an earlier age. Goals are vital but they’re worthless without the commitment to take action. As you invest, you’ll need to keep track of how you’re travelling along the path you mapped out at the beginning, and adjust your actions accordingly.

Step 7: Consider your risk management

Risk is one of the first factors to consider, but it’s also worth revisiting once you’ve started investing. Risk is simply the chance of your investments or strategy under-performing in terms of capital growth and/or income not meeting expectations and therefore not being able to meet retirement. When you don’t have much time, you can’t afford to

make mistakes. As such, investors need to sit down and identify all the things that can go wrong with their strategy and think about ways that they can reduce their risk. In planning for retirement, investors also need to factor in the possibility of ill health.

Step 8: Keep going

Some might find it hard to maintain motivation and keep rolling on with their investment plans, especially if they suffer some early setbacks. It’s a good idea to associate with other people who are doing similar things, as this can be “incredibly motivating and keeps you going during the rough times.

Want to know more on investing from 40+? Sign up and check out myljhooker for more tips.

1. Get the marketing right

So talked about that it seems like old news. Which is why it’s hard to believe there’s still plenty of properties out there that just don’t get it right.

Think the three Ps – presentation, pictures and prose.

P1: Unless you want to market the home as a renovators’ delight, it all starts with fixing up little niggles that could catch buyers’ eyes and stop them from falling in love with your home.

P2: When it comes to the pictures, always get a professional photographer to take them. There is a world of difference.

P3: Lastly the wording – you want to highlight the best points of the property but not offer so much information as to overwhelm. Save that for the brochures, or the property’s own website, which increasingly, we are seeing these days.

Videos are also being used but make sure they look professional. Badly done they’ll have the wrong effect.

2. If there’s a problem address it

Does your home have a tree close to the property, a steep driveway or a problem with strong westerly sun? Think about ways of addressing this before it becomes a problem for potential buyers.

You might not be able to change the driveway, but you can make sure the agent is well versed at parking on it, so they can confidently show potential buyers how it is done.

Or that gum tree close to the home, find out the process for removing it, and get some quotes on doing so. You don’t actually have to rip it out, but have the information on hand for home hunters who would prefer you did.

3. Pick the right agent

Don’t just go with someone you know, or who sold the neighbour’s house. Meet the agent, talk with them, attend some of their open homes and assess the way they do business.

Make sure you see at least three different agents to give you a good feel.

You want someone who will work hard at following up contacts and has a good manner with people while at the same time being a good negotiator who will also give you practical advice on what to do with your property in terms of its presentation.

4. Be sensible on price

It goes without saying you need to meet the market. Find out where the market is by looking at recent sales. And be honest about the state and attributes of your own property when trying to compare apples with apples.

Because many properties don’t sell for their advertised price, you’ll need to find out what they actually traded for. Your agent should be able to help you out with this.

5. Prepare for viewings at any time

Thanks to the variety of hours people work these days, you might get requests for viewing in the evening or outside of normal times. Within reason, you should try to have your home ready to show at a moment’s notice. That person who turns up at 7pm might just be the one who falls in love with your place.

6. Get all your documentation in place

The last thing you want is for a sale to fall through because you don’t have all the paperwork in place. Spend the time before you put the home on the market making sure you’ve got any required certification from the local council and any other relevant bodies.

7. Be flexible with your settlement times

This is not always possible but if you don’t have to move in a hurry – or indeed can get out a bit faster than usual – it is worth being flexible on settlement times. Buyers might want time to sell their house before moving into yours, or might be in desperate need of moving NOW.

What are your tips for sellers? Is there anything you did in selling your property that you felt really made a big difference?

Monday, 06 February 2012
Stacey Moseley

Sydney has outperformed the other major cities in this weekend’s auctions.

Auction figures released by Australian Property Monitors (APM) found, 71.6 per cent of the properties listed for auction in Sydney cleared over the weekend. This equates to a 22.6 per cent increase from the same time last year.

Whilst Melbourne and Brisbane both recorded increases from last year, with clearance rates of 65.5 per cent and 25 per cent respectively, Adelaide experienced a decrease with just 11 of the 20 properties up for auction selling, giving the city a 45.8 per cent clearance rate.

The most expensive property sold over the weekend was a three bedroom house in Burwood NSW, which went under the hammer for $1.17 million.
A three bedroom townhouse located in Campbelltown, NSW took the title of the weekend’s most affordable property, selling for $186,500.

In Victoria, auction figures released by the Real Estate Institiute of Victoria (REIV) showed there was a total of 112 auctions on the weekend, of which 65 sold and 47 were passed in, 28 of those on a vendor’s bid. This equated to an auction clearance rate of 58 per cent, just under the result recorded by APM.

“As volumes remain low these results are unlikely to be an accurate indication of the current state of the market. On this weekend last year there were 189 auctions and a clearance rate of 56 per cent,”REIV chief executive Enzo Raimondo said.

“Next weekend around 305 auctions are expected followed by 620 on the weekend of 18 and 19 February.”

Whilst Brisbane recorded a slight increase in clearance rates from last year the underperforming auction results continue with just 25 per cent of homes clearing. However, APM’s figures were at odds with the general outlook of independent auctioneering firm JA Auctioneers, which expects strong auction results for 2012 in South East Queensland.

Director Jason Andrew said vendors’ strong motivation to sell due to financial and personal pressures was a major pushing point.

“There’s no doubt at this point vendors need to remain realistic with their price expectations to entice buyers to act.”

How would you like to wipe $15,000 off your mortgage?

Just as we expected and aren’t we lucky???!!! It’s not often we receive the good news of rate cuts and, it could not of come at better time. At a time of giving I think it is fair to say “Thank You RBA”…

Although we cannot get too excited – we are still waiting for this FULL cut to be passed through all major banks.

Now, let me put things in perspective for you; since the rate cut on Melbourne Cup day at 0.25% and another December 6th rate cut of 0.25% the average mortgage holder – with a $300,000, 25-year mortgage – will save about $50-55 a month per rate cut. Therefore, you have just made an extra $100-$110 a month.

Retailers had been calling for a rate reduction to help bolster tepid sales heading in the final few weeks of 2011 – But don’t fall into the retail trap and think you are $100.00 richer per month to start splurging.

Helpful tip: the more you can put on your loan the better – So keep putting the same amount onto your loan as you were previously – Consider the $100.00 just a nice bonus!

Still don’t believe me? – Look at the interest calculators below:

On an interest rate cut of 0.25% over 25 years you will save $14,424.90 assuming the interest rate will stay the same. UNBELIEVABLE!

See, it really is a great Christmas present, and maybe a great time to buy!
Economists had been split almost evenly between those forecasting a rate cut or a rate pause. Financial markets, though, had tipped the central bank would again cut rates as the global economic outlook dims.
The dollar sank after the rate cut as the Australian currency lost some of its appeal. It sank more than half a US cent to fall below $US1.02.

The Reserve Bank board is not due to meet again to set interest rates until February 7 next year. Could we get lucky again?

If you are looking for properties within Dee Why to Mona Vale or would like any real estate advice, do not hesitate to contact LJ Hooker Narrabeen now. Always happy to help!

(Lets find out who will have the best rate and with what bank? Comment on the post and help out your fellow Australians!)
Posted by LJ Hooker Narrabeen at 22:09
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Labels: Author: Hayley Johnston

Mark Armstrong
December 4, 2011

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.
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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.

Our homes are more than a just a roof over our heads, they are warm safe havens for ourselves, our family and our friends.

Nobody wants their home to become a statistic when it comes to counting injuries to children.
Studies have shown that over 67 per cent of children’s injuries occur and around the home, and many of the injuries are preventable.
Making your home is as safe as possible will go a long way to ensuring any child will be protected from avoidable harm.
If you have children living in or visiting your home this summer, consider Kidsafe’s Top Five Tips:
1. Driveway safety
Before entering your home, take note of the property’s surroundings. Is the property in close proximity to a busy road? Is the driveway gated or does it have restricted access to the road? Children, particularly those four years of age and under, are naturally inquisitive and like to explore. Consider where your car will be parked also – small children can often not be seen when reversing a car. Restricted access to roads and driveways can help prevent major injuries from occurring.
2. Fittings
Take note of the fittings within your property. Slippery floor surfaces, electric safety switches, curtain and blind cords, types of window settings and smoke alarms are all important elements. Are door handles positioned out of reach of young children? By actively inspecting fittings, you can ensure you are fully aware of what

needs to be fixed or attended to before an accident occurs.
3. Home Layout
There are different hazards to look out for depending on the layout of your property. Is the property single or double storey? Are there any split levels or stairs, inside or outside the property? If a property has stairs, ensure there are adequate balustrades that meet Australian Standards and check to see if gates can be installed. Is the laundry located away or restricted from living and play areas? Taking note of the layout of your home will help you plan out and eliminate future problems.
4. Outdoors
Inspecting the outside area of your current or prospective home is just as crucial as inspecting the inside. Is there a pool? If so, ensure it meets Australian regulations with a fully enclosed fence and self closing, self latching gate. Check that access from the front to the backyard is restricted. Are there are any other exits i.e. side lanes or gates? Is there a garage or shed to store tools, chemicals etc away from children? Many injuries occur outdoors while children play, so spotting hazards early on is crucial.
5. Take the Kidsafe Home Safety Checklist
You can download it at www.kidsafe.com.au. The Kidsafe’s Home Safety Checklist and Online Safety Demonstration Property are great tools to ensure your current and future homes are child safe.
Information courtesy of Kidsafe