RBA delivers Christmas cheer with rate cut

‘Tis the season to be jolly and today the Reserve Bank of Australia delivered an early Christmas present to mortgage holders – cutting interest rates by 0.25 per cent.

The decision to drop the official cash rate to 3 per cent – the lowest level since September 2009 – follows a deluge of data showing manufacturing activity and job advertisements continued their decline while October’s retail sales fell flat.

The latest Australian Bureau of Statistics Retail Trade figures show Australian retail turnover was relatively unchanged in October 2012, following a rise of 0.5 per cent in September 2012.

Meantime, ABS business indicators show company profits are down 13 per cent for the September quarter when compared to a year ago.

Assuming lenders follow the RBA’s lead, the cut equates to a monthly $47 reduction in repayments based on a $300,000 loan amount over a 25-year loan term at the standard variable rate of 6.6 per cent.

For the official RBA statement, please visit http://www.rba.gov.au/media-releases/2012/mr-12-36.html

Three-year fixed rate at 5.39% with no rate lock

We're told we live in uncertain times, in the mortgage broking and finance industry, and people are reluctant to spend. Remember the saying “Cash is King”…

Well, why not consider holding on to more of your cash and getting the certainty back in your life? The Home Loan Centre can currently offer a three-year fixed rate at 5.39% with a free rate lock on application.

This rate is with one of The Home Loan Centre's major lenders and, according to senior mortgage broker Michael Searle, is one of the lowest fixed rates on offer.

"Instead of trying to predict where interest rates are headed, why not lock in peace of mind for the next three years and put some valuable cash back in your pocket," said Mr Searle.

"An increasing number of our clients are taking steps to refinance their existing home loan and have been surprised at just how much they can save."

Call The Home Loan Centre for a free health check on your mortgage.

For more details visit HomeACT.com.

No move on interest rates as staples rise

The Reserve Bank of Australia has again maintained the official cash rate at 3.5%, despite the largest decline in retail spending in seven years.

The Australian Bureau of Statistics figures are further proof Australians are reining in their spending. It’s not surprising considering the shrinking manufacturing sector and a mid-year drop in job advertisements.

However, unofficial inflation figures released by TD Securities – Melbourne Institute have noted a rise of 0.6% in August on top of the 0.2% June increase. The marginal increases have been attributed to the rising cost of essentials such as fruit, vegetables and petrol.

For the RBA’s full rates decision visit www.rba.gov.au/media-releases/2012/mr-12-25.html

New-look property website activated

An exciting step for Active Property today with the official launch of the ACT real estate sales and property management business’ new website.

Locally owned and operated, Active Property has been a force in Canberra's real estate market for the past seven years.

As a member of the HomeACT group, clients have the option of fulfilling all of their finance and real estate needs in the one place, including conveyancing and removalist services.

Boldly displaying the company’s red, white and black theme, the new site features everything people need to know about buying and selling a home, Active’s property management service, as well as a news and media hub and this blog.

Keep an eye on it for regular updates regarding the local housing market and property news.

Rates on hold as inflation remains steady

The Reserve Bank of Australia has maintained the official cash rate at 3.5 per cent as the rate reductions of May and June continue to offset the increasing costs of living.

The official Inflation rate is currently sitting at 1.2 per cent, well below the RBA’s target range of two to three per cent.

The cost of living has remained fairly steady with reductions in interest rates covering increases in goods and services on the back of the introduction of the carbon tax on July 1.

The situation will give the RBA scope for further cuts in the future, although by how much and when will depend largely on the economic positions of China, Europe and the US.

For the RBA’s full rates decision visit http://www.rba.gov.au/media-releases/2012/mr-12-18.html

Turnover rises as ACT property prices fall…

There’s been a small rise in the number of ACT residential properties changing hands during the past financial year amid a drop in the average house price.


The ACT Planning and Land Authority (ACTPLA) data shows a 3.4 per cent rise in property turnover between June 2011 and June 2012. Meanwhile, the average price for all residential properties sold in Canberra decreased by 2.2 per cent during the same period to $490,042.


The figures, published in the June ACT Residential Property Market Report, indicate a more volatile story for the latest month-on-month data. It showed a decrease of seven per cent in the turnover for all residential properties between May and June 2012.


Standard residential property turnover decreased from 386 in May to 314 in June, while turnover of ‘other’ residential properties, including apartments, townhouses and duplexes, increased by 5.7 per cent during the month and a massive 11.7 per cent over the year.

Housing industry calls for urgent tax reform

The residential building industry is being weighed down by excessive and inefficient taxation, according to independent research released by the Housing Industry Association (HIA).

In some states the total tax bill amounts to over 40 per cent of the final price of a new home, with taxes on new housing putting the brake on economic activity, while representing a constraint on housing affordability and labour productivity.

The report by the Centre for International Economics (CIE) finds new housing is the second most heavily taxed of Australia’s largest sectors, being those valued over $10 billion. It also finds a majority of the taxes are inefficient, with stamp duty clearly demonstrated to be one of the biggest offenders. The HIA says stamp duty is particularly inefficient, but it’s not alone as an excessive and inefficient tax, which acts as a disincentive to one of the fundamental tenets of Australian life – the provision of shelter.

The HIA is calling on the Commonwealth to lead the process of reforming the myriad of state, local, and federal government taxes on new housing, adding reforming inefficient taxation on housing is an investment guaranteed to pay a dividend.

Fast facts

- The taxation of housing contributes almost $40 billion dollars to revenue, which equates to 11.3% of total local, state and Commonwealth government revenue.

- This makes housing, in absolute terms, the second largest contributor of tax to Australian governments.

Home buyers more cautious

Canberra property sales have slowed significantly over the past two months as buyers tread more cautiously, according to Active Property Sales Executive Michael Searle.

Economic uncertainty and the impending introduction of a carbon tax are believed to be among the contributing factors.

There has also been a surge in the number of new properties hitting the market, which in turn has placed pressure on the sale of established homes.

There are hopes of another interest rate cut to stimulate the property market over the coming months, but in the meantime homeowners are reminded property is a long-term investment.

“There’s local uncertainly and global uncertainty and it’s been a year of people sitting back on the fence,” said Mr Searle.

“Once the supply evens back out we’ll return to a normal property cycle.”

More positively, property priced according to the market is still moving “fairly quickly”, with entry level housing ($350,000 - $400,000) in popular demand among home buyers.

“Even though things have stabilised in the market, rest assured the fundamentals in property and what it has to offer can be demonstrated on a national scale whereby Canberra is still deemed a safe haven for property investment and high rental returns.”