RBA decision on rates

Today the Reserve Bank has decided to leave the cash rate unchanged at 2.5 per cent.

To view the RBA’s full statement visit http://www.rba.gov.au/media-releases/2013/mr-13-17.html

Client question of the month - When should I consider refinancing?

There are many reasons to consider refinancing such as a job change, buying more real estate, your current lender isn't keeping up with its competitors, and the most common reason we find is to consolidate debts. It's worth weighing up the viability of refinancing from time to time because loan products have improved over the years and there may well be a better deal out there.

Tip of the month

Sending applications to multiple lenders, in the hope that one will say yes, can affect your credit worthiness if the lenders see how many loans you have applied for in recent history.

Official cash rate now lowest in more than 50 years

The Reserve Bank of Australia has cut the official cash rate by 0.25 per cent citing slowing economic growth, declining commodity prices and the weakening Australian dollar.

The decision to reduce rates to a record low 2.5 per cent on the cusp of an election follows weakening business confidence, rising unemployment and fresh concerns over China’s economic outlook.

The Australian Bureau of Statistics revealed retail spending stalled in June after soft results in the previous two months. The latest ABS Retail Trade figures show Australian retail turnover was relatively unchanged (0.0 per cent) in June, seasonally adjusted, following a rise of 0.2 per cent in May.

In the ACT, house prices are retracting due to an oversupply of new units and many potential new homeowners are waiting to see which way the September 7 poll falls first.

The Housing Industry Association has urged both sides of politics to focus their election policies on housing to promote a housing-led recovery in the Australian economy.

“Residential building is one of the few sectors in a position to generate substantial economic activity in the wake of the mining boom,” said HIA Managing Director Shane Goodwin.

“Australia is currently building around 25,000 homes per year less than a decade ago, which is not only putting the brakes on job creation in the sector, but placing upward pressure on housing prices.”

A borrower with a $300,000 home loan will save $46 a month if the banks pass on the full amount.

To view the RBA’s full statement visit http://www.rba.gov.au/media-releases/2013/mr-13-15.html

Fixed loans on the rise as rates remain at historical lows

More ACT home owners are opting to fix their loans as borrowers continue to enjoy cheaper interest rates.

While the Reserve Bank of Australia today opted to keep the official cash rate on hold at 2.75 per cent at its monthly board meeting, there’s growing speculation among economists we haven’t seen the end of the cuts yet.

Michael Searle, a registered salesperson with Active Property and senior mortgage consultant with The Home Loan Centre, said most major banks were now offering fixed interest rates below five per cent and both new and existing home owners were responding.

“We’re seeing a significant shift in the percentage of homeowners who are now changing from a variable rate to a fixed rate,” said Mr Searle.

“Fixed interest rates are at historical lows - rates which haven’t been seen for over 50 years. So instead of trying to pick when interest rates will hit rock bottom before beginning an upward trend, why not contact us today to look at your options regarding fixing a portion of or your entire loan.”

Mr Searle noted the Canberra property market remained flat to a degree as the tumultuous election-year dragged on.

According to Annette Beacher, Head of Asia-Pacific Research at TD Securities, “If the AUD continues to trade closer to $US0.90 than parity, we believe the risk of additional RBA easing falls to well below 50 per cent. We remain of the view that a change of government with a strong majority is more likely to kick-start the economy and boost confidence, not another cash rate reduction.”

For the RBA’s rates decision visit http://www.rba.gov.au/media-releases/2013/mr-13-13.html

ACT Budget delivers blow to established properties

The ACT Government’s changes to the First Home Owner Grant have the potential to damage the established property market, according to Active Property’s Mick Searle.

From September, the grant will increase from $7000 to $12,500 but will only be available to buyers purchasing new homes or homes they plan to “substantially renovate”.

The previously revealed change was announced in today’s ACT Budget.

A registered salesperson with Active Property and senior mortgage consultant with The Home Loan Centre, Mr Searle believes the increase will help “clean up” an oversupply of new housing stock flooding the market, particularly in the city’s north, to the detriment of mum and dad homeowners.

“First home owners are being pushed towards new homes and there’s no incentive to purchase an established property unless they substantially renovate. Over the past 10 years of arranging finance for Canberra people I haven’t encountered any first home owners who can afford to renovate when trying to enter the property market,” said Mr Searle.

From tomorrow the income test for the Home Buyer Concession Scheme will be increased from $150,000 to $160,000 per household.

“From a first home buyer’s perspective if they spend $425,000 on a new property, normal stamp duty would be $14,487, but if they’re eligible for the stamp duty concession they will pay only $20. Add that to the increased First Home Owners Grant and that’s a substantial saving of almost $27,000… But if they want to purchase an existing home, they miss out on the concession and they’re only eligible for the $12,500 grant if they renovate.”

Today’s budget, which coincided with the Reserve Bank of Australia’s decision to keep interest rates on hold, also revealed an average 10 per cent rise in rates (or $139 per ACT household a year).

The government also announced new releases of ACT land sites for new dwellings will be made available to assist with planning and population growth.

Interest rates hit 53 year low

The Reserve Bank has cut the official cash rate by 25 basis points to 2.75 per cent amid signs of continuing softness in the economy.

The last time interest rates dipped this low was in 1959/1960 and the cut equates to a saving of around $60 a month in interest on the average $300,000 home loan.

The RBA judged a further decline in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target.

It believes the global economy is likely to record growth below trend this year, before picking up next year. The CPI rose by 2.5 per cent over the past year, and measures of underlying inflation gave a broadly similar outcome. These results have been pushed up a little by the impact of the carbon price. Growth of labour costs has moderated slightly over recent quarters while productivity growth appears to be improving.

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 and commodity prices have moderated a little in recent months.

The news has been welcome by the Housing Industry Association which reported house price growth in Australia’s capital cities stagnated in the first quarter of 2013.

Huge savings to celebrate Active Property team expansion

Canberra real estate agency Active Property is proud to welcome Adrian Murray and Anne Lynch to its successful sales team.

To celebrate their arrival Active Property is pleased to announce the introduction of a special $6990 fixed price commission to sell your property in the ACT, for a limited time.

This price includes all marketing, including professional photographs of your property and exposure on our website and allhomes.com.au, as well as GST.

Adrian Murray is Active Property’s registered salesperson for the North Canberra region. Fifteen years’ experience as a carpenter in the local building industry and  time spent managing properties for a prominent community housing organisation have provided the springboard into a career in real estate.

Anne Lynch is a registered salesperson with 30 years’ experience in the local finance and housing sector. Anne joins the team as Active Property’s open home specialist.

With the added benefit of having our sister companies, The Home Loan Centre and Conveyancing Canberra located in the same office, we have the ability to manage your entire real estate transaction, ensuring it’s as smooth as possible.

If you would like a realistic and honest appraisal of your property please contact us on

(02) 6214 8555.

Cash rate steady

It’s official – the Reserve Bank of Australia has kept the cash rate steady at three per cent at its monthly board meeting today.

The decision was widely expected by economists who now seem split over the possibility of a further cut this year. Some are even predicting the RBA could begin to lift interest rates as early as October.

The mixed signals follow signs monetary policy is gaining traction. Consumer sentiment and the housing market are improving in large part due to low interest rates, while locally real estate agents are reporting stronger levels of enquiry.

The TD Securities Melbourne Institute monthly inflation Gauge increased by just 0.2 per cent in March, following a flat monthly result in February.  In the 12 months to March the inflation gauge increased by 2.1 per cent, the lowest annual inflation outcome in eight months.

Contributing to the overall change in March were price rises for alcohol and tobacco (seasonal), and clothing and footwear. These were offset by falls in fruit and vegetables, household appliances, and audio, visual and computing equipment.

According to Annette Beacher, Head of Asia-Pacific Research at TD Securities, “We expect next month’s RBA Board meeting to be a benign event. We are of the view that the cash rate should remain at three per cent, with the Bank’s clear easing bias remaining on the table.”

The official RBA statement can be found at http://www.rba.gov.au/media-releases/2013/mr-13-06.html

Rates on hold as the banks make cuts to stimulate lending

The Reserve Bank of Australia surprised no one today by keeping the official cash rate on hold at three per cent.

It’s not all bad news for people trying to enter the housing market with increased competition amongst the banks driving lending rates down.

Over the past month, the Home Loan Centre has witnessed a reduction in variable lending rates while some institutions have cut their fixed rate to less than five per cent for between one to three years.

Home loan growth is the slowest in three decades with the December quarter showing just 0.3 per cent growth in the number of people taking out mortgages.

Insiders say it is this lack of growth that’s prompting banks to consider further chopping rates irrespective of the RBA’s latest decision.

Furthermore, the TD Securities – Melbourne Institute Monthly Inflation Gauge remained flat in February, following small rises in January and December.

In the 12 months to February, the Inflation Gauge increased by 2.4 per cent on the back of price rises for fruit and vegetables, automotive fuel and tobacco, though these were offset by falls in holiday travel and accommodation, clothing and footwear.

This tame level of inflation remains well within the RBA’s two to three per cent target range.

For the RBA’s official interest rates statement visit http://www.rba.gov.au/media-releases/2013/mr-13-04.html

Interest rates on hold despite signs of softening economy

The Reserve Bank has adopted a ‘wait and see approach‘, leaving interest rates on hold at its first board meeting of the year.

The decision to leave the official cash rate at three per cent takes into account weaker-than-expected building approvals for December, the continuing fall in job advertisements, while inflation remained subdued in January.

The TD Securities – Melbourne Institute Monthly Inflation Gauge rose by 0.3 per cent in January.

Contributing to the overall change were price rises for utilities, urban transport fares and education, mainly due to seasonal factors. These were offset by falls in holiday travel and accommodation, clothing and footwear, and furniture and furnishings.  While the price of fruit and vegetables only rose by 1.2 per cent last month.

Meantime, the strong Australian dollar has allowed numerous goods and services to be imported at discount prices, although this impact is likely to fade as the year unfolds and the Australian dollar stabilises.

The cash rate has been lowered by 125 basis points over the past 12 months. It’s thought more time is needed to measure the effect of this monetary easing, which will be more clear come the March meeting.

For the RBA’s full decision visit http://www.rba.gov.au/media-releases/2013/mr-13-01.html

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.”