ACP Home Loans

ASIC Credit Roadshow hits the ground running

2010-02-15T10:52:00.001+11:00

Brokers seeking to improve their understanding of the soon to be introduced National Credit Regime are encouraged to attend ASIC’s Credit Roadshow as it tours the country from today until April 2010.

The Roadshow, which was developed to assist brokers understand how the impending legislation will affect them and their business, will visit every state and territory capital as well as 24 regional centers.

Each session will give brokers the opportunity to hear how the legal requirements have changed and how to prepare for the changes. ASIC senior executives will also explain how to register for an Australian Credit License, and outline brokers’ general obligations under the new laws.

Attendance is free but registration is required to reserve a seat. Brokers can register at: www.asic.gov.au.

Share falls expected following Wall St drop

2010-02-15T10:50:00.000+11:00

The Australian share market is expected to open weaker today after losses on Wall Street last Friday.

Concerns about China's plans to curb bank lending dragged down the Dow Jones Industrial Average, which fell 45 points to 10,099.

In local futures trade, the Share Price Index 200 has shed 18 points to 4,516.

At 9:34am (AEDT) the Australian dollar was worth 88.72 US cents.

IMF questions inflation targeting for rates

2010-02-15T10:48:00.001+11:00

The International Monetary Fund has reignited debate about whether inflation targeting is the best way for central banks to set interest rates.

Currently, stable and low inflation is the primary target of central banks.

Australia's Reserve Bank, for example, aims to keep inflation within a 2 to 3 per cent target band, and it uses interest rates to boost or slow down the economy when it looks like inflation will get too far out of that range.

However, according to the IMF's chief economist, Olivier Blanchard, inflation targeting should not be the only tool, and he says stable inflation might not be sufficient, and that low inflation actually lulled many economies into a false sense of security in the lead up to the global crisis.

Notably, he refers to the dangers of falling into a liquidity trap - or easy access to money - which sparked the subprime mortgage crisis.

The IMF is arguing that, in some cases, a 4 per cent inflation limit should be allowed.

Another idea is that lowering interest rates to stimulate the economy in a scenario of rising unemployment may not be the best approach, and that cash handouts or stimulus payments might be a more direct solution.

There is also discussion of perhaps going more directly to banks which caused the crisis in many ways, with tighter regulation to prevent the problems of a few spreading to entire economies.

This discussion is particularly relevant in Australia, as there is already a big debate about the link between government spending and higher interest rates.

We will find out more this week when the Reserve Bank governor Glenn Stevens faces the House Economics Committee on Friday, when it is also likely that Mr Stevens will be asked for his views on the need to cut government debt and to reduce government spending.

(Source: acb.net.au, By business editor Peter Ryan for AM)

Non-bank lender bumps up LVR

2010-02-15T10:45:00.000+11:00

In a sign that competition is beginning to reemerge in the market, Australian First Mortgage (AFM) has expanded its loan portfolio to include a 95 per cent loan-to-value ratio (LVR) full doc product with a variable interest rate of 5.84 per cent (CPR 6.19 per cent).

Borrowers will be asked to pay an application fee of $675.00, which includes the cost of one standard valuation.

Suitable for investors, first home buyers and debt consolidation, borrowers have the option of choosing from a range of features including flexible repayment options, AFM said.

“While Westpac recently reduced its maximum LVR from 97 per cent (including LMI) to 87 per cent for new customers, AFM is looking at ways of assisting borrowers entering the property market by offering products with features, competitive rates, and most of all quick turnaround times of a conditional approval within 24 to 48 hours,” said AFM’s director sales and marketing Iain Forbes.

“The interest rates presently on offer from AFM are well below that of most other lenders.

"AFM represents good old fashioned customer service, strength, long term sustainability, and solid alliances,” he said.

Bank guarantee has 'built in' exit strategy

2010-02-08T10:10:00.002+11:00

The Federal Government says it has a strategy to reduce the dependence of Australian banks on government-backed guarantee schemes.

Reserve Bank governor Glenn Stevens says such schemes were necessary during the height of the global financial uncertainty last year.

But he says banks should soon be looking to reduce their reliance on the guarantees.

Finance Minister Lindsay Tanner told ABC1's 7.30 Report an "exit strategy" is built in to the Federal Government's schemes.

"The banks have to pay a fee to access that guarantee and already they are retreating from that," he said.

"Early on something like 98 per cent of their foreign borrowing was guaranteed, they were spending the money to get the borrowing because that was the only option open to them. In recent months that's been down to little above 50 per cent."

Mr Tanner says while the Government has no plans to rush banks out of using the scheme, there are options to for the Government to act to wind the scheme up.

"There are options open to us to accelerate that should we choose to do so, we have no plans to do that, we think the market will gradually withdraw the use of the guarantee by Australia's banks and that's exactly how it was meant to work," he said.

Challenges remain

Mr Tanner has also denied the Federal Government has spent too much money on stimulus packages, despite a more upbeat assessment of the Australian economy by the Reserve Bank.

Mr Stevens says the current economic downturn may not turn out to be one of the worst of the post-war era in Australia.

He has indicated economic conditions could improve at a faster rate than anticipated and the next move for interest rates may be up.

Mr Tanner says that does not mean the Government has over-reacted with its stimulus spending.

"I think time will tell as to exactly how severe the downturn is in Australia," he said.

"We've been very careful not to proclaim victory just because we've had a few months of quite positive data compared with where perhaps people were anticipating things would head."

Mr Tanner says despite Mr Stevens' assessment, there are still significant challenges for the Australian economy.

"I think the Reserve Bank Governor is entitled to draw these conclusions, but we've got some very big challenges facing us," he said.

"We're certainly not going to be deviating from our stimulus strategy, that's been critical to getting us thus far with less damage than most other economies, but it's also crucial for the immediate future."

Source: ABC.net.au

RBA flags further rate rises

2010-02-08T10:04:00.002+11:00

The Reserve Bank expects it will need to impose another three increases in the official interest rate by the end of this year to reduce inflation as the Australian economy strengthens.

The RBA has increased its forecast for economic growth in Australia, expecting a faster pace over the next two years.

Underlying inflation is forecast to moderate despite the growth, but only once the central bank lifts the cash rate - the interest rate lever used to set monetary policy - in line with current market expectations.

This implies that the Reserve Bank will impose at least another three interest rate rises of 25 basis points, pushing the cash rate up to 4.5 per cent by the end of the year.

In its latest quarterly statement on monetary policy, the RBA increased its forecast for Gross Domestic Product (GDP) over the year to June 2010 from 2.25 per cent to 2.5 per cent, and over the year to June 2011 from 3.25 to 3.5 per cent.

The RBA's inflation forecasts have also been tweaked. It has revised up its underlying inflation forecast over the year to December from 2.25 per cent to 2.5 per cent.

But this is well below the current underlying inflation rate of about 3.25 per cent and the forecast puts both headline and underlying inflation within the RBA's target range.

It says it is possible, however, that the stronger-than-expected performance of the economy over the past few quarters is largely accounted for by bringing forward spending, in which case economic growth will be softer this year as the effects of fiscal and monetary stimulus fade.

But the RBA appears to think it more likely that firmer labour markets, with rising household incomes and wealth, will encourage spending and consumption.

The central bank's monetary policy statement says an improved outlook for the resources sector with higher commodity prices is also likely to bolster economic growth and this is "clearly not due to temporary policy factors".

But the Reserve Bank is more cautious about the outlook for the international economy.

Although it says the outlook for the global economy is much better than feared in the early part of last year - with global growth forecasts revised up to 4 per cent in the next two years - it highlights a series of risks.

Among them is the the durability of the recent economic recovery in the major advanced economies.

"In many of these countries current growth rates are being boosted by the dynamics of the inventory cycle and temporary fiscal measures," the Reserve Bank noted.

"For a sustained recovery to take hold, a substantially stronger pick-up in private demand than has been evident to date will be required.

"Many of these countries also face very significant fiscal challenges that will need to be addressed over time and have bank systems that are still experiencing credit losses from the weak economic conditions."

Coupled with mounting concerns about government debt in southern European countries such as Greece, Spain and Portugal, these global risks may make the RBA board cautious about lifting rates too quickly.

Australia's unemployment has probably peaked at 5.75 per cent, according to the RBA.

But it says it is more likely that the recovery in the labour market in coming months will take the form of an increase in work hours rather than further big falls in the unemployment rate.

Source: abc.net.au
Author: By ABC Economics Correspondent Stephen Long

Government shocks industry, withdraws guarantee!

2010-02-08T09:59:00.002+11:00

The Federal Government says its guarantee of wholesale funding for banks and other lenders is no longer needed.

The guarantee was put in place in October 2008 at the height of the global financial crisis to help financial institutions access funding from overseas, ensuring credit was still available in Australia.

The Government says it will be closed at the end of March. The guarantee is expected to earn the Government $5.5 billion in fees by the time it is wound up.

Treasurer Wayne Swan says the guarantee was one of the most important factors in Australia's economic recovery. "Without the guarantee, our banks would have lent less and interest rates for borrowers would have been far higher," Mr Swan said. "This would have led directly to lower growth and more households losing a bread winner right across this country."

Mr Swan has warned banks against raising interest rates because of the guarantee's withdrawal. "If any major bank were to attribute some move above the Reserve Bank rate to a decision such as this, they would be wrong to do so," Mr Swan said. "I think they would incur the wrath of not just the Australian people, but of the Australian Government."

The guarantee of deposits under $1 million, however, will remain in place until it is reviewed in October next year. The Government has also announced it intends to withdraw its guarantee of state and territory government borrowings at the end of 2010.

The Greens leader Bob Brown wants to know how much money the banks made with the backing of the guarantee. "I would have thought the banks would be proud to tell us about that, and that the Government would want to tell us as well," Senator Brown said.

The Opposition says the decision shows the Government's stimulus spending should also be withdrawn.

(Source: abc.net.au)

Back from holidays!

2010-02-08T09:50:00.003+11:00

Hi readers!

Well, we are 2 weeks back after the long annual christmas holiday and getting into the swing of it all. It's a bit of a lazy feeling, especially after having so much time off.

We trust you are all well and I warmly wish you and your families a very happy and prosperous new year! (Yes, I know it's February).

I would like to hear/read about what's happening in the mortgage industry in your part of the world. Drop us a comment or email me. And the search continues for more funny/interesting pictures from our readers. You have until the end of the month to make us fall over laughing and I'll send the best pic something yummy!

Until then, take care!!

Light at the end of the tunnel for RHG

2010-02-08T09:49:00.000+11:00

RHG Mortgage Corporation Limited looks set to reenter mortgage lending having raised its full-year profit guidance by $10 million after settling two court disputes that could have otherwise threatened the former non-bank lender.

The court settlement was in relation to disputes regarding a claim by German bank UniCredit that RHG had been in default on $324 million in funding provided by it. The claim triggered cross-defaults with other warehouse facilities totalling $2.56 billion.

The claims, if successful, could have ultimately jeopardised a third of RHG’s lending facilities, according to The Australian Financial Review.

But RHG, previously RAMS, told investors yesterday that the various actions in the NSW Supreme Court had been ''commercially'' resolved in the best interest of shareholders in a move that will immediately benefit the company's bottom line.

RAMS was founded in 1991 and expanded from being solely a provider of funds to establish its own retail origination business.

In November 2007 RHG was created when the RAMS brand and franchise network was sold to Westpac. As part of the agreement RHG was prohibited from originating new loans for three years until November 2010.

It is widely expected that RHG will relaunch itself as a mortgage broker after November this year or otherwise look to buy a loan provider next year.

Homeloans expects profit surge

2010-02-08T09:48:00.000+11:00

Improving market conditions and robust business activity in the second half of 2009 have raised Homeloans expectations of achieving a significant increase in its net profit after tax (NPAT) result for the half year ended 31 December 2009.

The originator expects to achieve normalised NPAT of between $4.2 million and $4.6 million, a dramatic improvement on the $2.6 million recorded in the previous corresponding period.

According to an ASX announcement, the company said the strong result was due to a continuation of the momentum achieved during the second half of the 2009 financial year.

Full results for the half year ended 31 December 2009 are expected to be announced on Friday, 19 February 2010.

Share it with us...

2009-11-20T13:47:00.003+11:00

Do you have useful tips and tricks (or just something funny - we love funny stuff, see below)that you would like to share?

We'd love to know! Just email Sophia, info@acphomeloans.com.au, and we'll get them online for you. Easy as that!

Tips for moving with kids

2009-11-20T13:46:00.000+11:00

Moving home is a huge stress on the entire family especially if you have kids as part of the process. It can also be an extremely stressful time for your kids. Here are some things to help you out when moving into your new home.

Plan your move
It is important to include the kids in the moving process. Let them know when moving day is and what they should expect. They are also moving out of their home, and it is important to manage their feelings and fears for the move. If possible, take them to the new house so they can see where they will be living and get excited about the change.

Keep the idea of moving positive, talk about the positive aspects of moving and try to exclude them from the stress of it all. If they are moving into a new area, let them say goodbye to their friends in the area so they have closure. This will also decrease the amount of anxiety they feel about the change.

Moving day
If it is possible, organise for family or friends to look after your kids on moving day. This will mean you have one less thing to worry about on the day. When packing make sure you have access to all the items your children will need e.g. nappies, medication, blankets, pyjamas etc. It is a good idea to pack an overnight bag for each of the children so that they have all the essentials handy.

Get older children involved in the process; this is a great way to keep them feeling positive about the move and also for them to give you a helping hand. Let them be in charge of packing their items, so they can understand the process and learn from it.

Keep snacks and drinks handy so you don’t need to worry about finding food and drinks on the day for the kids.

The new house
As this is a new environment your kids may not know the safe areas to play. Make sure you take them around the home and outline the best places to play and also point out any potential hazards.

To reduce the anxiety of the new home, set up a routine from day one, show them around the new neighborhood and talk to them about the new house and the changes.

6 tips for successful property investment

2009-11-20T13:34:00.002+11:00

Low vacancy rates, rising rents and the stabilising of property prices in most states are a great opportunity for Australians to consider buying an investment property. Great gains can be made from purchasing property if you buy in the right place at the right time

We suggests the following 6 tips for those looking to invest their hard earned money in a piece of Australia.

1. Create a long-term property portfolio plan
Realise that investing in property is usually a long-term strategy. Always ensure you are comfortable with the advantages and disadvantages associated with a particular investment asset. Consider your goals and all possible outcomes.

2. Consider all costs & positive vs. negative gearing
Keep in mind that the interest and related expenses you incur (such as repairs and maintenance) are tax deductible. If your loan repayments, fees and other costs exceed your rental income, the net loss can be offset against other income you derive, meaning you will be able to reduce the amount of tax payable on your other income. This is called negative gearing. Or, you may consider positive gearing, where the annual rental income received from the property covers or is higher than the annual loan repayments and costs.

3. Think about buying with friends, family or work colleagues
More and more Australians are taking advantage of pooling their resources with people they know in order to get into the property market or increase their property market ‘wealth’. With myriad lender and home loan options now in the marketplace, all it takes for applicants to have their application approved is the ability to meet home loan repayment requirements

4. Choose a loan tailored to your current needsDepending on your monetary situation and current investment portfolio, there are a range of property loan products for you to consider. Apply for a loan that suits your current needs and lifestyle because you can always refinance later.

5. Use a buyers agent/property finderSeek advice about the type of investment property that will maximise your investment. Buyers’ agents know the market better than most and are a valuable resource to use for advice or for negotiating with property sellers and/or their agents.

6. Visit a financial advisor and/or accountantYou need to discuss your full monetary situation with someone who is very experienced with clients who have a range of investment assets because you need to make sure that your financial situation is improved by an investment property and that you can afford repayments without stretching the budget uncomfortably.

To find out more about what loan suits your needs, arrange an appointment with us and we will help you choose the right loan for your lifestyle. Secure your future today!

Non-bank lender sees surge in activity

2009-11-20T13:33:00.000+11:00

Improved funding and renewed confidence in the non-bank sector has seen an upswing in volumes for the mortgage management sector according to Australian First Mortgage.

After suffering a torrid two years the non-bank sector is beginning to see some growth retuning to volumes according to Australian First Mortgage (AFM) director of sales and marketing Iain Forbes.

AFM reported record settlements in August, September and October.

“We had a record month in August and then beat that month by $5 million in settlements in September,” Mr Forbes told Mortgage Business.

“However, we then beat September by $10 million in settlements and the forecasts for November already look positive.”

To cope with the record settlements, AFM decided to ramp up its staff numbers to include another five employees in NSW, Victoria and SA.

Mr Forbes credits the businesses rapid growth to improvements in the economy and a return in borrower confidence.

“At the beginning of the global financial crisis, borrowers were reluctant to trust the non-bank sector. However, since the acquisition of Challenger by NAB, I have seen a renewed sense of confidence in borrowers,” Mr Forbes said.

Support from brokers for the non-bank sector also remains strong.

The September Mortgage Business quarterly sentiment survey revealed that of the 377 respondents, 75.3 per cent expected that they would recommend a non-bank product over the coming quarter – up from 72.1 per cent the previous quarter.

Planners get slapped with educational requirements

2009-11-20T13:32:00.000+11:00

It is not just brokers who are being pushed towards tougher licensing requirements; financial planners will soon also be required to have tertiary qualifications in order to give advice to clients, under changes proposed by the Financial Planning Association (FPA).

According to FPA’s chief executive Jo-Anne Bloch, the minimum legal training standard for planners is unacceptable and fails to protect consumers.

Ms Bloch is expected to announce tough new rules for financial planners in a speech to FPA’s annual conference in Melbourne later today.

Some of the new rules include a national examination and accreditation process and compulsory ethics training.

“Consumers should have confidence the advisor they are trusting with their financial future has a solid educational background, sufficient technical and practical knowledge and an ethical, professional orientation that ensures reliable, quality advice,” Ms Bloch said.

Rate hike likely in December :(

2009-11-20T13:31:00.000+11:00

Brokers are factoring further rate rises in to their calculations as the Reserve Bank looks set to lift the official cash rate again in December.

The Reserve Bank has already lifted the official cash rate by 25 basis points twice over the past two months, after it became evident that the Australian economy was improving.

In the minutes of its November meeting, released earlier this week, the Reserve Bank talked of the need for the gradual adjustment of its cash rate, heightening speculation surrounding another rate hike next month.

“Looking ahead, members expect that if economic conditions evolve as expected, further gradual adjustment in the cash rate would most likely be appropriate over time, though the pace of the adjustment remains an open question,” the minutes read.

NAB’s chief economist Alan Oster said he expected the Reserve Bank to raise the official cash rate by 25 basis points each month until March 2010.

“I expect the Reserve Bank to lift the official cash rate to 4.25 per cent by March 2010,” Mr Oster said.

“After this, I expect the Reserve Bank to pause for around six months before delivering progressive 50 basis point rises until rates are back to neutral.”

Climbing rents good news for investors

2009-11-20T13:29:00.000+11:00

Property investors looking for an immediate return on their investment are flocking to the eastern suburbs of Sydney where house rents are soaring.

According to figures from RP Data, Rose Bay in Sydney recorded the greatest annual growth in house rents, with a 58.3 per cent increase.

Over the 12 months, median weekly advertised rents in the suburb increased from $600 per week to $850 per week.

A list of the top five areas with best rental growth compiled by rpdata.com research analyst Cameron Kusher showed a fairly even split between high and low priced suburbs, with many New South Wales, Victorian and Western Australian suburbs having higher price tags while other states recorded a mixture of higher and lower priced stock.

Mr Kusher said it was not surprising to see the best performing suburbs tended to be in the capital city cities.

For the unit market, West End in Brisbane achieved the greatest jump in median weekly advertised rents, increasing by 39.4 per cent from $330 per week to $460 per week.

Renters struggle to find property in Sydney

2009-11-20T13:28:00.000+11:00

Rental property vacancies remain very tight in Sydney, according to the NSW Real Estate Institute (REINSW).

The REINSW president Steve Martin said Sydney had not experienced an increase in the rental vacancy rate since July 2009.

"In Sydney last month the available rental vacancy rate remained at 1.3 per cent, which means the market remains very tight," Mr Martin said.

“Sydney’s middle suburbs fared better with a 0.1 per cent increase to 1.5 per cent for the month of October, whilst inner suburbs recorded a 0.1 per cent decrease to 1.3 per cent. There was no change in the rental vacancy rate for outer suburbs, which remained at 1.0 per cent.

“The news was slightly better in Wollongong with the city recording a good increase in available properties for the month. Wollongong recorded a 0.2 per cent increase to 1.8 per cent, which is the highest result recorded since April 2009.

“Newcastle remained unchanged at 1.6 per cent."

Mr Martin said investment in rental properties had improved over the later part of this year with lower interest rates and good rental income enticing investors into the market.

Unfortunately, this combined with the move of first home buyers out of rental accommodation has not enabled rental supply to match demand.

“As these stimulus factors weaken, and with no sign of demand abating, things will only continue to be difficult for renters over the foreseeable future,” he said.

“The government needs to urgently encourage and incentivize better use of land particularly in the 5 – 10 kilometre radius from Sydney.

“We need a strategic approach in NSW to solve this problem in order to avoid a worse situation in 2010.”

Australia’s cheapest suburbs revealed!

2009-11-20T13:26:00.001+11:00

With the official cash rate expected to steadily increase over the coming months, more homebuyers will seek properties in affordable suburbs, according to Australian Property Monitors (APM).

According to a list compiled by APM, the nation’s most affordable suburbs are Coonamble in NSW, which has an average home value of $77,500, Coober Pedy and Fisherman Bay in South Australia, which average $81,500 and $92,000 respectively, St Arnaud, Morwell and Red Cliffs in Victoria and Hughenden in Queensland, which has an average property price of $99,000.

Research manager for APM, Yvonne Chan said investors and first home buyers obviously need to stick with affordable properties to enter the market - but the key to long term price growth is purchasing within 5km of the capital city's CBD where rental demand will always be strong.

"First home buyers can turn their first home into an investment property later on if they buy well in the first place," Ms Chan said.

"If you can't afford close to the city, then stay close to universities or train stations where rental demand will always be strong and help values grow."

When it comes to choosing the best states to live in, Tasmania is the cheapest for homeowners.

In Tasmania the average mortgage of $191,700 is 3.2 times the average male income of $59,872.

Cheapest suburbs:

Coonamble NSW $77,500
Coober Pedy SA $81,500
Fisherman Bay SA $92,000
Rosebery TAS $92,000
Hughenden QLD $99,000
Fern Bay NSW $110,000
Kandos NSW $110,000
St Arnaud VIC $115,000
Morwell VIC $118,500
Red Cliffs VIC $119,000

Most expensive suburbs:

Toorak VIC $6,250,000
Bellevue Hill NSW $5,000,000
Bayview NSW $4,425,000
Vaucluse NSW $4,350,000
Dalkeith WA $3,846,500
Mosman NSW $3,750,000
Clontarf NSW $3,725,000
Brighton VIC $3,250,000
Paradise Point QLD $3,200,000
Killara NSW $2,850,000

2009-11-09T10:59:00.001+11:00

Things People Said - Top 32 Car Accidents... ( & Insurance Claims)

2009-11-09T10:06:00.003+11:00

1. "A pedestrian hit me and went under my car."
2. "The other car collided with mine without giving warning of its intention."
3. "I had been learning to drive with power steering. I turned the wheel to what I thought was enough and found myself in a different direction going the opposite way."
4. "Coming home, I drove into the wrong house and collided with a tree I don't have."
5. "I thought my window was down; but found it was up when I put my hand through it."

6. "No one was to blame for the accident, but it never would have happened if the other driver had been alert."
7. "The pedestrian had no idea which direction to go, so I ran over him."
8. "I saw the slow-moving, sad-faced old gentleman as he bounced off the hood of my car."
9. "I had been driving for 40 years when I fell asleep at the wheel and had an accident."

10. "I was taking my canary to the hospital. It got loose in the car and flew out the window. The next thing I saw was his rear end, and there was a crash."
11. "I was backing my car out of the driveway in the usual manner when it was struck by the other car in the same place where it had been struck several times before."
12. "The indirect cause of this accident was a little guy in a small car with a big mouth."
13. "The accident happened when the right door of a car came around the corner without giving a signal."
14. "I was thrown from my car as it left the road. I was later found in a ditch by some stray cows."
15. "I had been shopping for plants all day and was on my way home. As I reached an intersection, a hedge sprung up, obscuring my vision."

16. "I was on the way to the doctor with rear end trouble when my universal joint gave way causing me to have an accident."
17. "I was sure the old fellow would never make it to the other side of the road when I struck him."
18. "I told the police that I was not injured, but on removing my hat, I found that I had a fractured skull."
19."My wench slipped, losing my balance, and I hurt my back."
20. "I was unable to stop in time, and my car crashed into the other vehicle. The driver and passengers then left immediately for a vacation with injuries."

21. "To avoid hitting the bumper of the car in front, I struck the pedestrian."
22. "The accident occurred when I was attempting to bring my car out of a skid by steering it into the other vehicle."
23. "When I could not avoid a collision, I stepped on the gas and crashed into the other car."
24. "I collided with a stationary truck coming the other way."
25. "In my attempt to kill a fly, I drove into a telephone pole."

26. "My car was legally parked as it backed into the other vehicle."
27. "As I approached the intersection, a stop sign suddenly appeared in a place where no stop sign had ever appeared before. I was unable to stop in time to avoid the accident."
28. "The telephone pole was approaching fast. I was attempting to swerve out of its path when it struck my front end."
29. "A truck backed though my windshield and into my wife's face."
30. "I pulled away from the side of the road, glanced at my mother-in-law, and headed over the embankment."

31. "The guy was all over the road. I had to swerve a number of times before I hit him."
32. "An invisible car came out of nowhere, struck my vehicle, and vanished."

New liquidity rules could cost borrowers

2009-11-09T10:05:00.000+11:00

The Australian Prudential and Regulation Authority’s (APRA) new liquidity rules could add 0.05 of a percentage point to borrowing rates.

According to a report in The Australian Financial Review, the proposed rules have been modelled off a similar British reform, which caused the small cost to be imposed on UK banks.

APRA has said it wants to avoid a repeat of the liquidity crisis that occurred in late 2008 when banks could not fund their balance sheet commitments.

Under the new rules, banks would be forced to hold larger quantities of liquid assets and a higher quality of liquid assets.

“The world needs strict and precise timetables for imposing tougher regulations because the forces of amnesia and resistance to change that will inevitably accompany the return to calmer global conditions may soon begin to chip away at fundamental reforms,” APRA chairman John Laker said in a speech last week.

Offshore investors take double hit

2009-11-09T10:04:00.002+11:00

The recent rate hike by the Reserve Bank will have an adverse impact on overseas property investors, CB Richard Ellis regional director of institutional investment properties Rob Sewell has claimed.

This will be the second blow for offshore investors who are currently struggling under the improved Aussie dollar.

“Overseas funds that need to borrow to offset their currency hedging will be impacted,” Mr Sewell said.

“While this will not affect the closed end funds, it will have an impact on the open ended funds that have been increasingly active in the Australian market.”

However, Mr Sewell said the premiums that banks were charging were beginning to ease for preferred customers and this would “take some of the sting out of the interest rate rise”.

CBRE executive, global research and consulting, Kevin Stanley, said an ongoing issue for the commercial market was the level of lending for commercial property investment and development, which was still well below long term averages.

“Banks are generally already overweight in lending to commercial property, so the cost of debt is not so much the issue at the moment; lowering LVR’s is,” Mr Stanley said.

Agents enjoy strong spring activity

2009-11-09T10:04:00.001+11:00

The spring selling season is still well and truly active, according to RP Data’s latest market activity index.

Although RP Data’s head of property research Tim Lawless said he expects the index to dip in the weeks leading up to Christmas, current figures show properties are selling faster and vendors are having to move less on their asking price.

The average level of discounting, which measures how much negotiation is taking place in the market, fell from 7.0 percent last year to just 5.4 percent, suggesting that vendors are regaining some leverage as buyer demand increases.

The average number of days on market has also fallen considerably compared with last year. The average Australian house is now taking just 41 days to sell compared to 53 days last year.

New listings to the market have slipped below 48,000 for the first time in more than six weeks. This may be the first indication of the imminent Christmas / New Year slowdown in property transaction activity.

Total stock listings have also continued to fall indicating that the properties available on the market are continuing to sell. At the same time last year, there was 40,000 more properties listed for sale than there has been over the last month.

Green shoots of recovery in wholesale markets: FirstMac

2009-11-09T10:03:00.000+11:00

Brokers will welcome the news that competition may soon start to filter back into the market with early indications that wholesale market investors are returning.

FirstMac’s chief executive officer Kim Cannon has confirmed that wholesale markets are beginning to experience renewed interest from foreign investors.

The increased interest follows months of hesitation from investors, with the global financial crisis effectively freezing securitisation markets.

“Investors are reentering the market thick and fast now, however I believe it will be another six to 12 months before we see any marked improvement in the wholesale arena,” Mr Cannon told Mortgage Business.

While there is increased investor interest, Mr Cannon said the hardest task for non-bank lenders will be rebuilding consumer confidence.

“A lot of people were burned by GE because it didn’t stay in line with the majors. But we are trying to rebuild confidence in the non-bank sector and hopefully in time, we will rebuild the trust people once had in second tier lenders.”

FirstMac is currently in talks with the Australian Prudential Regulation Authority about obtaining a license that will allow also it to tap into the retail deposit market and diversify its funding base to maintain funding for borrowers.

“What the financial crisis has taught us is that we need to have access to funding other than securitised, because when that funding source freezes, we are left in a very vulnerable position,” Mr Cannon said.

Property prices surge

2009-11-09T10:00:00.000+11:00

Residential property prices in Australia increased 3.7 per cent in September to a six year high.

The latest figures from Australian Property Monitors (APM) showed that Melbourne is the fastest growing real estate sector with prices rising 6.1 per cent in the third quarter of the year, the fastest quarterly increase since 2003.

The average house price in Melbourne was $487,249, compared with $437,560 in September last year; the city's average house price has now risen 11.4 per cent during the last 12 months.

Hobart is not far behind Melbourne, with prices up 5.4 per cent for the quarter.

APM economist Matthew Bell has warned that the recent jump in property prices may not be sustainable over the longer term because they are currently being underpinned by first home buyers.

According to Mr Bell, the rise in house prices across the nation is being led by the explosive growth in the more expensive suburbs which have seen house prices steadily climb since June.

“House price growth in Australia has come despite massive falls in many developed economies due to the global economic crisis. Low interest rates, generous government grants for new home buyers, relatively low unemployment, and strong population growth have all helped to lift demand for houses,” he said.

Things People Said - 20 Top Resume Quotations...

2009-11-06T10:27:00.005+11:00

The following quotations were taken from resumes and cover letters from all over the country. With all the work and care that goes into writing these documents, it's funny, if unfortunate, when errors slip through to the final draft. Alas, such mistakes make exactly the wrong impression on exactly the wrong people.

1. "I am very detail-oreinted."
2. "I have a bachelorette degree in computers."
3. "Graduated in the top 66% of my class."
4. "I worked as a Corporate Lesion."
5. "Served as assistant sore manager."

6. "Married, eight children. Prefer frequent travel."
7. "Objective: To have my skills and ethics challenged on a daily basis."
8. "Special skills: Thyping."
9. "Special skills: Experienced with numerous office machines and can make great lattes."
10. "I can play well with others."

11. "I have exhaustive experience in manufacturing."
12. "Special skills: I've got a Ph.D. in human feelings."
13. "My contributions on product launches were based on dreams that I had."
14. "I eat computers for lunch."
15. "I have used lots of software appilcations."

16. "Objection: To utilize my skills in sales."
17. "Experience: Watered, groomed, and fed the family dog for years."
18. "Reason for leaving last job: Pushed aside so the vice president's girlfriend could steal my job."
19. "Previous experience: Self-employed -- a fiasco."
20. "I am a pit bull when it comes to analysis."

Signs of life in industrial market

2009-11-06T10:26:00.002+11:00

The industrial property market looks to be steadily emerging from the economic doldrums, with sales totaling almost $250 million in Melbourne alone.

According to the latest report by CB Richard Ellis, sales totalled $249.1 million in the Victorian capital, most of which occurred in the late second and third quarter.

Research analyst Craig Olde said the late sales proved momentum was building in the market, with owner occupiers and private investors the main buyers.

Defying predictions earlier in the year, few grade A yields had been above 9 per cent.

“More recently, industry opinion was that yields might once again be sharpening back towards 8 per cent, however our survey results are yet to reflect this,'' Mr Olde said.

Three consecutive quarterly surveys had shown an average grade A warehouse yield of about 8.88 per cent, in line with industry opinion.

The sales volumes, although a far cry from the peaks of $1.6 billion recorded in 2006, are still better than expected given the current state of the financial markets.

Rate rise won’t hurt housing demand

2009-11-06T10:26:00.001+11:00

The Reserve Bank’s decision to raise rates for the second consecutive month should not make a large material difference to housing demand, the Housing Industry Association (HIA) has claimed.

According to HIA’s chief economist Harley Dale, figures show that sentiment towards buying new homes begins to falter when mortgage rates hit their 10 year average of 7.25 per cent.

Even with the latest rate rise, the variable rate on the average mortgage is still significantly below that mark, he said.

Similarly, the strength of the underlying demand stemming from the shortage of housing plus the population growth means the sector should be able to absorb another rate rise.

“It is widely regarded that rates will rise moderately over the next six to nine months and that’s at a time when we don’t have a lot of evidence of new home building recovery and nothing of the magnitude needed to bridge the housing gap,” Mr Dale said.

According to Mr Dale, the rising rates could further dampen supply and put pressure on affordability.

Liberty optimistic despite profit drop

2009-11-04T15:12:00.001+11:00

Liberty financial has posted a 4 per cent fall in net profit to $35 million, but the non-bank lender has said it is still cautiously optimistic about the outlook as it diversifies its operating income.

The non-bank lender has recently moved into new areas of business to offset the effects of the global financial crisis.

According to the company’s managing director Sherman Ma, Liberty has branched into invoice finance, car loans and auto dealer floor plan financing.

Traditionally, the non-bank lender draws approximately 50 per cent of its revenue from residential mortgages.

But since the onset of the global financial crisis, Liberty’s loan book fell from $3.2 billion to $2.5 billion, a drop Mr Ma attributes to less demand and higher provisions.

Mr Ma said the company’s ability to diversify had acted as a buffer to the downturn.

“We will continue our operational discipline and retain our profits, and expect that as the economy improves we will be particularly well positioned to increase our activities,” he said.

Westpac profit down

2009-11-04T15:11:00.000+11:00

Westpac has reported an 11 per cent drop in its net profit for the year ended 30 September 2009.

According to the bank’s full year results, released this morning, pro forma cash earnings were also down 8 per cent to $4,627 million.

But despite the drop in profits, Westpac’s chief executive officer Gail Kelly said the group had managed to achieve a sound financial performance in what had been a very challenging year.

“We have remained strong in uncertain times by being well capitalised, well funded and well

provisioned,” Ms Kelly said.

The bank did manage to grow its mortgage book by 17 per cent, highlighting the continuing strength of its retail franchise.

Ms Kelly said the bank’s average funding costs were expected to increase further as the competition for retail deposits remain, and as wholesale funding is sourced at a cost well above pre-crisis levels.

“In addition, as government fiscal support begins to be scaled back and interest rates move upwards from their very low emergency settings, ongoing caution is likely to be applied to consumer and business budgets,” Ms Kelly said.

“Against this backdrop, however, The Westpac Group enters the 2010 financial year with solid business momentum, with a strengthened balance sheet and excellent provisioning cover.”

Big four act on rate rise

2009-11-04T15:09:00.000+11:00

The nation’s big four banks have wasted no time in passing on the Reserve Bank’s 25 basis point increase.

ANZ was the first of the majors to move, raising its variable mortgage rate within 10 minutes of Reserve Bank’s announcement.

ANZ’s acting chief executive in Australia, Graham Hodges, also warned that the bank might yet have to lift the price of lending outside the official rate cycle.

He said there is currently “considerable pressure on mortgage margins”.

“If sustained over time, there will be commercial pressure to pass the additional costs on,” Mr Hodges said.

“The right thing to do at this point in the economic cycle is for us to absorb the additional funding costs and pass on only the amount of today’s official increase.”

ANZ and Westpac will now offer a 6.31 per cent standard variable rate, while CBA and NAB offer a slightly more competitive 6.24 per cent.

St George matched the rate increases of the big four, lifting its variable rate by 25 basis points.

Overall borrowers can expect to pay an extra $40 per month on an average $250,000 household mortgage as a result of yesterday’s rate hikes.

Funny Mortgage Video...

2009-11-04T14:24:00.003+11:00

"Don't Be Too Quick To Judge"

From the US's "Ameriquest" mortgage firm's ad campaign series.

MFAA CEO slams rate rise scaremongering

2009-11-04T14:23:00.000+11:00

MFAA chief executive Phil Naylor has dismissed industry reports that warn another rate rise will double the number of people who default on their loans.

According to Mr Naylor, the MFAA’s mid-year survey of 974 homebuyers found that only 26.5 per cent of respondents expected rates to fall further over the next three years, suggesting that borrowers had realistic expectations about future rate rises.

“The survey found 83.6 per cent of respondents were easily making their loan repayments - up from 76 per cent six months earlier,” Mr Naylor said.

“Some industry figures are warning a rate rise will almost double the number of people who default on their loans, but the evidence suggests this is exaggerated. And in any case the percentage of defaulters is less than half a percent of all mortgage holders.”

While Mr Naylor confirmed that some borrowers may have difficulty adjusting to their higher repayments, any increase in interest rates by the Reserve Bank suggests the economy is strengthening and should be seen as good news.

“Mortgage rates cannot stay at historic lows forever. There is good news in a rate rise as well as bad,” he said.

House prices continue to climb

2009-11-04T14:19:00.000+11:00

The Australian Bureau of Statistics Index of established house prices has risen for the second consecutive quarter, suggesting the property market is continuing to thrive.

The housing Industry Association’s (HIA) chief economist Dr Harley Dale said the price increase was a positive sign for the industry.

“Increasing signs of life in the real estate market this year has helped boost consumer confidence and spending and has been a component of Australia’s economic out-performance,” he said.

“As we head towards 2010 we need a keen focus on lifting new home construction to an extent that removes unnecessary upward pressure on home prices.

“A recovery in new residential construction is underway, but there is a very real risk that costly delays in planning approvals and land shortages will combine to blunt the magnitude of that recovery.”

The weighted average capital city established house price index increased by 4.2 per cent in the September 2009 quarter to be 6.2 higher when compared to the same period last year.

The established house price index increased by 4.3 per cent in Sydney, 4.7 per cent in Melbourne, 4.4 per cent in Brisbane, 1.7 per cent in Adelaide, 4.5 per cent in Perth, 1.8 per cent in Hobart, 3.4 per cent in Darwin, and 4.3 per cent in Canberra.

The weighted average index for project homes across Australia’s eight capital cities increased by 1.3 per cent in September.

Agents slam hokey journalism

2009-11-03T11:22:00.003+11:00

Real estate agents have slammed an article in the Daily Telegraph that says those in the real estate profession are the most likely to cheat on their partners.

According to the daily, a survey conducted by online dating agency Redhotpie found 68 per cent of real estate workers had admitted to cheating on their spouse or loved one.

The survey of nearly 5,000 Australians also revealed that more men admitted cheating then women, but more men say they would forgive their partners.

A number of estate agents branded the survey as being ‘unwarranted’, ‘lacking credibility’ and ‘disappointing’.

“We cop enough flak in this industry without having to deal with reports such as these,” one agent said.

Real Estate Institute of Australia president David Airey said he thought the article was a joke.

“This is a case of a journalist with too much time on their hands,” he said.

Speaking tongue in cheek, Mr Airey mused: “but perhaps this is one way agents can build their listings".

FHB activity to continue: RAMS

2009-11-03T11:22:00.001+11:00

Friday, 30 October 2009
Regardless of the scaling back of the FHOG, first home buyers are still active in the market, research from RAMS has found.

According to the mortgage provider’s First Home Buyers’ Pulse Check, less than 40 per cent of potential first home buyers will actively try and purchase a property before the FHOG boost ends on 31 December 2009.

RAMS head of brand and marketing Lynne Wyatt said the boost to the grant was inevitably a catalyst and an enabler for many Australians to get a foot on the ladder but healthy demand from first home buyers is expected to continue for the rest of the year and well in to the next.

“We believe that in 2010 between fifteen and twenty per cent of our customers will continue to be first home buyers,” Ms Wyatt said.

According to the Pulse Check, there is real resilience amongst first home buyers and the majority will still look to buy even if interest rates continue to increase.

“In the first Pulse Check report, released in April 2009, seven out of 10 first home seekers said they had been influenced to look for their first home by the FHOG boost. The findings of the second survey indicate that the FHOG is not as influential as it was earlier this year,” Ms Wyatt said.

Top 10 boom towns revealed

2009-11-03T11:20:00.000+11:00

Western Australia’s resource towns of Port Hedland and Karratha are set for a property boom, according to a real estate researcher.

Real estate forecaster Terry Ryder identified 10 key regional areas that are expected to enjoy a boom in prices.

In his "National top 10 Boom Town Hotspots" report Mr Ryder recommends investing in the cities of Bunbury in WA and Newcastle in New South Wales.

Also on the list was Ceduna in South Australia, Gladtsone in Queensland, Geraldton in WA, Portland in Victoria and Orange in New South Wales.

While most of the towns are located in some of Australia’s resource hotspots, Mr Ryder warned investors to be wary of spending their money in ‘pure mining towns’.

"While investors who get in early can make big capital gains, most mining towns exist in a bubble, which can burst if demand for resources drops, the local mine closes or housing demand falls away after construction of a major project is completed," Mr Ryder said in a statement.

According to Mr Ryder, investors would be more likely to benefit from investing in areas that are strategically located near regional centres that are set to benefit from major projects in the short term.

Cross-selling gathers pace: survey

2009-11-03T11:19:00.000+11:00

More than 70 per cent of all brokers cross-sell other products when offering residential mortgages, a new broker poll has revealed.

According to Mortgage Business’ latest straw poll, of the 300 brokers surveyed 210 cross-sell whereas 90 do not.

Joel De Shannon from Australian Independent Investment Solutions (AIIS) advocates the strong business case for cross-selling, saying he offers his clients insurance with every mortgage written.

“At AIIS we are trying to provide holistic advice and become a bit of a one-stop-shop to our customers,” Mr De Shannon told Mortgage Business.

“I find clients get more value out of your services if you can offer them more than a residential mortgage.”

According to Mr De Shannon, cross-selling has added value to his clients and his hip pocket.

“While you will see a return on your investment, I think brokers need to branch into cross-selling as a way to add value to their clients rather than their own income,” he said.

Phillip Edwards from Australian Mortgage Brokers is another broker who sees benefit in cross-selling.

“If you can offer more than transactional, residential mortgage broking, you will make your clients stickier and help keep them loyal to your business,” he told Mortgage Business.

And these people are managing our money... right.

2009-11-03T11:15:00.000+11:00

RAMS awarded 5 star accolade

2009-11-03T11:14:00.000+11:00

RAMS Home Loans’ Basic and Easy Start three year introductory variable rate home loans have been awarded a five star rating from Canstar Cannex for outstanding value.

The mortgage provider’s head of product Joanne Reid said obtaining a five star rating for the two variable home loan products was a significant achievement.

Canstar Cannex researches and rates over 1,500 home loans from 115 lenders, and awards the top 5 per cent five star status.

Only the top five per cent of all home loans researched received the prestigious five star status.

REIV to crack down on misleading advertising

2009-11-03T11:13:00.000+11:00

The Real Estate Institute of Victoria (REIV) plans to introduce a new code of conduct for agents that will prohibit them from using misleading advertising methods including the phrases ‘price plus’ and ‘in excess of'.

Under the new code agents would be required to advertise a property with a single price, a price range of up to 15per cent or publish no price at all.

While the rules will only apply to REIV members, those who go against the code of conduct could face hefty fines and/or expulsion from the Institute.

A spokesperson from the REIV told Real Estate Business that the vast majority of agents do the right thing when it comes to pricing.

“While there are always one or two exceptions to the rule, we developed this code not to weed out the dodgy agents but to benefit consumers and help them make the right choice when it comes to buying their property,” the spokesperson said.

According to a spot audit conducted by Consumer Affairs Victoria, only 5 per cent of all problems associated with real estate agents involve pricing issues.

The proposed code is expected to be submitted to the Australian Competition and Consumer Commission for review and authorisation this week, a process that could take upwards of six months.

Affected parties will be given the chance to speak out for or against the proposed changes.

CPI increases in September quarter

2009-11-03T11:12:00.000+11:00

The consumer price index (CPI) has increased by 1 per cent over the September 2009 quarter, fueling speculation that the Reserve Bank will raise rates by 50 basis points at the November Board meeting.

But Housing Industry Association (HIA) senior economist Ben Phillips said the moderately higher than expected CPI does not provide the Reserve Bank with a reason to hike interest rates.

“Such a result is hardly a sign of inflation running out of control. Large interest rate hikes should be viewed as both unnecessary and dangerous and will likely dampen the much needed housing recovery, especially rental investment, across the country,” Mr Phillips said.

“Supply side constraints are continuing to place undue pressure on housing rents and home values, especially but not solely in Australia’s capital cities. Reducing the obstacles to boosting Australia’s housing supply is a fundamental policy challenge.”

Hmmm....

2009-10-28T10:58:00.000+11:00

Funding costs to push rates higher: CBA

2009-10-28T10:56:00.000+11:00

Brokers can play a critical role in informing their clients of the impact of the higher funding costs that are likely to push mortgage rates up further, according to CBA.

At a media briefing yesterday, Kathy Cummings, executive general manager of third-party banking, told journalists that the bank was working with its Diamond brokers to help them prepare clients for a rising rate environment.

CBA’s current initiatives to support borrowers will include a video presentation produced for CBA’s Diamond brokers in which Lyn Cobley, group treasurer, highlights the impact of today’s higher funding costs on both variable and fixed rate loans.

In the video, shown to journalists, Ms Cobley explains why the bank’s funding costs bear little relationship with the cash rate. She also reveals that while 58 per cent of the banks funds originated from deposits, a cut-throat market had also pushed up costs in this sector.

According to Ms Cobley, the remaining 48 per cent of funds were secured from institutional investors where costs had risen from less than 20 basis points in June 2007 to 112 basis points in June 09. She said that this is forecast to reach 136 basis points by June 2010.

Kathy Cummings explained to journalists that while the threat of recession in Australia has now receded, borrowers should be aware that the global financial crisis still grips the capital markets.

She believes that with a better understanding of the wholesale markets brokers will be well positioned to help their clients navigate the next phase in the rate cycle.

“Brokers have a major role to play in helping their clients borrow responsibly and that means keeping them informed about the realities of the current wholesale funding environment and how that could impact on their mortgage.”

Melbourne property prices jump $30,000

2009-10-28T10:55:00.000+11:00

The median price for a property in Melbourne has climbed $30,000 in the three months to September, to sit at $480,000.

According to the Real Estate Institute of Victoria’s (REIV) September Quarter Property Update, the median price of a house in Melbourne soared 6.7 per cent during the last quarter.

REIV chief executive officer Enzo Raimondo said that improved confidence in the Victorian economy combined with ongoing population increases had resulted in the new record quarterly median price.

“The recovery in the property market is widespread with record demand in the cities most prestigious suburbs as well as its most affordable ones,” Mr Raimondo said.

“Individual monthly results also show ongoing and sustained increases over the quarter which indicates demand will continue to push prices up through October, November and December.

“The improved confidence in the economy has revealed the underlying issue; a lack of supply, both for purchasers and renters. Unless there is a sustained increase in supply the REIV expects further pressure on prices.”

According to the property update, the Sydney suburb Surrey Hills recorded the largest increase, surging 24.6 per cent from $905,000 to $1,127,500.

Pascoe Vale also recorded very strong increase in demand, its median rose by 23.7 per cent from $485,000 to $600,000 over the quarter.

Strong demand for traditional detached homes in similar middle ring suburbs such as Thornbury, Highett, Doncaster East, Nunawading and Bentleigh East was also recorded.

Fewer FHBs seek finance

2009-10-28T10:49:00.003+11:00

First home buyers have officially started to pare back, with mortgage brokers noticing a dramatic drop in the level of enquiries.

Mortgage Broker Loan Market Group has seen a 26 per cent drop in the number of enquiries from first home buyers since the grant was reduced.

Mr Rushton believes tougher lending criteria by the major banks has made it more difficult for some first time buyers to get into the market.

He also said the expanded grant scheme had been crucial in cushioning the Australian economy from the worst of the world’s economic woes.

“Overall, the expanded grant scheme provided a core foundation for the property market,” he said.

“It helped cushion it from the dramatic downturn some overseas property markets experienced.

“One of its greatest legacies was that it generated a lot of confidence in the market which should remain stable despite the inevitable upward movement in interest rates from near record lows.”

ANZ rated number one for customer satisfaction

2009-10-28T10:49:00.001+11:00

ANZ has topped the majors in terms of customer banking satisfaction, a new poll from Roy Morgan has revealed.

According to the poll, ANZ ranked as the market leader at 74.3 per cent, slightly ahead of Westpac in second position at 72.3 per cent.

CBA posted the biggest improvement in customer satisfaction, gaining 2.7 percentage points for a score of 71.4 per cent.

Overall bank customer satisfaction has improved by half a percentage point to 73.2 percent in the last 12 months.

Building societies achieved the highest satisfaction rating with 87.9 per cent, followed by credit unions at 86 per cent.

Senate passes broker legislation

2009-10-28T10:48:00.000+11:00

The National Consumer Credit Protection Act was finally passed through the senate yesterday following the six month reprieve won by banks and business groups earlier in the year to postpone its implementation.

The laws, which will cover mortgage brokers, margin loans and debentures, faced some staunch opposition with many industry members arguing they needed more time to prepare for the new regime.

Financial services minister Chris Bowden said the laws had been a long time coming, but was pleased a national set of rules was finally being implemented.

“As the fallout from economic and financial market chaos has reverberated around the world, it is clearer now than ever that Australia needed to adopt a national approach to consumer regulation, a system where consumer and credit providers alike can look to the one, national set of rules,” Mr Bowden said in a statement.

The laws will take effect from 1 July 2010, with state credit and broker laws staying in place until then.

Brokers can register with Australian Securities and Investment Commission (ASIC) from 1 April 2010, with responsible lending obligations for authorised deposit taking institutions (ADI) commencing on 1 January 2011.

Business confidence heightens threat of rate rise

2009-10-28T10:47:00.000+11:00

Business confidence for the quarter has climbed again, soaring 20 points to the highs last seen in early 2002.

According to NAB’s September 2009 Quarterly Business Survey & Forecasts, business conditions have also improved for the quarter, rising 14 points.

On the back of this growing confidence, NAB believes the RBA will continue to raise rates by 25 basis points until the official cash rate hits 4.25 per cent in March 2010.

While the bank’s chief economist Alan Oster refuses to rule out a 50 basis point increase at the RBA’s November Board meeting in just under one weeks time, he said rates should only reach 4.75 per cent by late 2010 and 5.50 per cent in 2011.

And everyone is wondering why the GFC happened?

2009-10-27T17:36:00.002+11:00

ANZ vows to toe interest rate line

2009-10-27T17:31:00.000+11:00

ANZ Bank has promised to keep step with the Reserve Bank’s adjustment to the cash rate when the Board meets in November.

According to a report in Herald Sun, ANZ chief executive Mike Smith said the bank would not deviate from the RBA rate cycle until it becomes clear that Australia has come out the other end of the GFC.

"I'm concerned we're in a quite fragile stage of recovery (and) I'm reluctant to move above the Reserve Bank, right now, because I can't see how it would be in the best economic interests of Australia,” Mr Smith told the Herald Sun.

ANZ’s announcement will put pressure on the other majors to follow suit and shelve home loan rate increases.

Branch closures a failure: Westpac

2009-10-27T17:30:00.000+11:00

Westpac’s group executive Peter Hanlon has admitted the bank’s policy of shutting down branches was a big mistake.

According to Mr Hanlon, the bank’s decision to morph into automated services had increasingly frustrated its customers.

"Closing branches has been a complete failure. We have closed branches in places we simply should not have closed them. This is an admission we made a mistake," he said.

"Over the last 20 years we've taken away the capabilities of bank managers to get involved in any lending decisions, we've taken away their ability to hire their own people, we've even taken away their ability to sponsor the local bowls club.”

The bank is now attempting to correct the situation and as such, has hired 400 new bank managers this year and given them more autonomy.

"The bank managers now decide who they hire, when they open and close, they decide where their sponsorship dollars go, they decide on what to do with specific customer inquiries,” he said.

"I want us to be respected again. I want bank managers to be respected members of the local community and I think the work people like me have done over the last 20 years, while not on purpose, has engineered the drop in respect of the local branch manager.

"Australia is not a country of cookie-cutter towns and cookie-cutter suburbs, so why continue to have a cookie-cutter approach to banking?"

Mr Hanlon said the bank was committed to opening 200 branches in the coming years.

Abandoning major banks could save borrowers $5.3b

2009-10-27T17:29:00.002+11:00

Big four customers could save $5.3 billion on their home loans each year by switching to the cheapest provider.

According to Infochoice’s first quarterly cost-of-banking report, mortgage customers could save $3,186 a year in interest repayments by switching from the 5.78 per cent average variable rate for the four majors to the 4.92 per cent average rate for the lowest four mortgage facilities.

“The real anomaly is that, while the four major banks offer increasingly less competitive products, they continue to increase their market share,” Infochoice chief executive Shaun Cornelius said.

According to Mr Cornelius, there is no logical reason for customers to stay with one of the big four banks.

“The majors have trusted brands and there’s been a flight to perceived quality in the financial crisis, but Australia has always had a strong banking system, and the guarantee is in place,” he said.

Big four move fixed rates

2009-10-27T17:29:00.001+11:00

The big four have started to move their fixed rate home loans once again on the back of increased funding costs.

Yesterday, NAB lifted its one- to five-year fixed rate home loan rates by 20-50 basis points. Westpac, CBA and ANZ have also raised rates on their suite of fixed rate loans in recent weeks.

Last month, CBA blamed rising funding costs for its 25 to 45 basis point rate increases.

According to the banks the impact of the GFC and a sustained lack of liquidity is likely to place increasing pressure on the cost of funds for the foreseeable future.

Yellow Brick Road chairman Mark Bouris has been lobbying for a wholesale funding rate tracker that would allow borrowers to track the cost of funds thus alerting them to any potential home loan rate increases ahead of time.

MFAA reinstates 900 brokers

2009-10-27T17:28:00.001+11:00

Nearly two thirds of the 1,500 brokers terminated by the MFAA have had their membership reinstated after obtaining their Certificate IV in Financial Services.

Early last month, the MFAA took a hard line with brokers that had failed to obtain the Certificate IV, terminating their membership.

However, the association said it would reinstate a membership if Certificate IV was attained within three months.

“The majority of members already had their certificate IV, but for one reason or another, they had failed to make this known to us. This was easily corrected and as such, their membership was reinstated without delay,” he said.

With just over a month remaining, Mr Naylor said he is doubtful that many of the remaining 600 brokers will strive to meet the MFAA’s requirements and obtain their Certificate IV.

“If they are serious about broking and their profession, they will complete what is the basic foundational qualification for mortgage and finance broking,” he said.

Congratulations On Your New Home!

2009-10-27T16:49:00.002+11:00

A client bought a new home and the broker wanted to send flowers for the occasion. They arrived at the home and the owner read the card; it said "Rest in Peace".

The owner was angry and called the florist to complain. After he had told the florist of the obvious mistake and how angry he was, the florist said. "Sir, I'm really sorry for the mistake, but rather than getting angry you should imagine this: somewhere there is a funeral taking place today, and they have flowers with a note saying, "Congratulations on your new home".

Real estate advertising explained - Part 1

2009-10-27T16:30:00.004+11:00

1. 1 1/2 BATHROOM - One bathroom, the toilet has own entrance.
2. 3 RECEPTION AREAS - Entrance hall, dining room and living room (sometimes with cabinet bar. - bar not included)
3. ARCHITECT DESIGNED - As a homework project in House Design 101.
4. ARTISTICALLY DECORATED - Full of stuff you can't use.
5. BRAND NEW DEVELOPMENT - Live with construction dust for a couple more years.

6. BREATHTAKING VIEW - Can see, and smell, rubbish dump from living room.
7. CLOSE TO BEACH - Impossible to park from November to January.
8. CLOSE TO HEALTH CENTRES - Wake up every now and then from the ambulance sirens.
9. CLOSE TO NATURE - Property has no services.
10. CLOSE TO SCHOOL - The lunch break din is deafening.

11. COMPACT - Tiny house.
12. CONTEMPORARY FEELING - House has no woodwork, needs cleaning. (Also see OLD WORLD CHARM)
13. CONVENIENT - Property located next to highway on-ramp.
14. COZY - No room larger than 3m x 2m.
15. DECEPTIVE APPEARANCE - House looks terrible.

16. DELIGHTFUL RURAL LOCATION - Property in flight path of major air force base.
17. DUET - Half a house.
18. DUET - Sing along with neighbour in the shower.
19. EASILY MAINTAINED - Requires at least two gardeners and live-in maid.
20. ENTERTAINMENT AREA - 1/2 conca-braai on cement paving in corner of backyard.

Broker uses franchise to drum up good will

2009-10-27T16:30:00.001+11:00

Mortgage Choice franchise owner and broker, Greg Campbell, has won the Franchise Council of Australia’s 2009 Franchisee Community Service Award.

Mr Campbell was awarded the top prize for his dedication to helping the local community and ongoing contribution to the children’s charity Camp Quality.

A Camp Quality volunteer for over 11 years, Mr Campbell has used his Mortgage Choice franchise to increase public awareness and raise funds for the charity.

“With the support of my customers and passionate team I’m able to make a small difference to a very worthwhile cause. It’s fantastic to have our contribution acknowledged at a national level by the franchising industry and my peers; I can only imagine what we could achieve if more small business operators got involved in a similar manner,” Mr Campbell said.

Hermes MD fights ‘unjust’ mortgages

2009-10-27T16:27:00.001+11:00

Luxury goods brand Hermes’ managing director Karin Upton Baker will face court this week after failing to repay more than $18 million in loan repayments.

In December 2006 Ms Upton Baker borrowed $5.8 million secured against her Elizabeth bay apartment and in June 2007, she borrowed $11.3 million against four apartments overlooking Bondi Beach.

According to the SMH, Ms Upton Baker, who is reported to earn $360,000 a year, will argue in court that the mortgages should be set aside because they are unjust.

Ms Upton Baker says that she was at a ''special disadvantage'' because she was pressured by her husband into signing the loans and did not earn enough to repay them. She also admitted she did not read the terms and conditions of her mortgages and that she falsely declared she had received financial and legal advice before she took out the loans.

Her lawyers will ask the court to order that she does not have to repay the loans or, if this is not possible, order that the lenders can recoup only their loan from the sale of the Bondi properties and cannot claw back more than this if the sales do not reach $11.3 million.

Ms Upton Baker has failed to make any repayments on her loans since July last year.

Melbourne achieves best auction results of the year

2009-10-27T16:15:00.002+11:00

While auction clearance rates remained relatively stable across the weekend, Melbourne managed to achieve its biggest weekend for the year as more than 950 properties went under the hammer.

Figures from Australian Property Monitors revealed that Melbourne recorded a 74.9 per cent auction clearance rate, in line with last week’s result of 76.4 per cent.

However it was the volume of stock that captured the market’s attention.

To date, 675 properties of the 950 listed for auction have not been accounted for. From the total listed, only 155 were confirmed as having sold under the hammer, with another 51 sold before auction.

In Sydney, the auction clearance rate remained relatively stagnate, achieving a 61.1 per cent rate, down from 64.7 per cent recorded the week before.

A five bedroom house in Burwood was the most expensive property sold over the weekend for $2.49 million; a three bedroom house in Mount Druitt was the cheapest property sold for $241,000.

More than 150 properties were sold in Sydney for a total value of $123.9 million.

Both Brisbane and Adelaide recorded less than impressive results, failing to achieve clearance rates above 60 per cent.

In Brisbane 10 properties were sold for a clearance rate of 33.3 per cent, while Adelaide faired a little better, selling 16 properties for a clearance rate of 67.1 per cent.

NAB supports acknowledgement of funding costs

2009-10-27T16:15:00.001+11:00

NAB’s chief executive Cameron Clyne has put his weight behind a proposal that would see banks publishing the benchmark cost-of-funds rate.

According to a report in The Australian, Mr Clyne said publishing the benchmark rate would help soothe the heated debate surrounding variable mortgage rate movements disconnected from the official cash rate.

"Bank funding is becoming more expensive -- the marginal cost is easing but the average cost is rising -- and it will also increase due to stronger regulatory standards on things like capital and liquidity," Mr Clyne told the paper.

According to Mr Clyne, the benchmark would be calculated from several key inputs such as the 90-day bank bill rate and other measures, and would help customers and brokers predict future interest rate movements now that banks were adjusting rates independently of Reserve Bank monetary policy.

Economic recovery near as home sales surge in US

2009-10-27T16:14:00.000+11:00

The United States has enjoyed a surprising surge in the sale of existing homes, climbing 9.4 per cent in September to an annualised rate of 5.57 million.

According to data from the National Association of Realtors, the surge represented the fifth straight month of gains, with sales now up 9.2 per cent from the levels recorded in September 2008.

The supply of unsold homes declined from 9.3 months’ supply in August to 7.8 in September, although median prices fell to $US174,900 ($190,000).

The Bureau of Economic Analysis is expected to use the data to confirm that the US economy is officially starting to emerge from the recession that began in December 2007.

The Bureau will this week report the economy’s pace of growth.

Big four to ramp up business lending

2009-10-27T16:13:00.000+11:00

The big four banks are gearing up to lend more aggressively to medium and large businesses as the economy shows signs of recovery according to The Australian Financial Review.

The major lenders are seeking to take advantage of surplus capital and improving corporate growth prospects.

NAB’s group executive of business banking Joseph Healy said he expects corporate demand for credit to remain fairly stable next year, prompting a tightening in pricing and more competitive rates as the banks fight it out for the small pool of corporate borrowers.

Mr Healy also said the banks would compensate for tepid demand next year by growing their loan books through stealing additional market share from investment banks, regional’s and non-bank financial institutions.

Loans to non-financial companies rose in August for the first time in four months, according to the Australian Bureau of Statistics.

Total loans rose to $486 billion in August from $481 billion.

FSBO Funny Real Estate Sign

2009-10-27T16:11:00.002+11:00

In the US, the law says you must give full disclosure of any problems with a house when you sell it. Here's someone who followed that law to the letter.

Top 11 Signs You've Got a Mortgage Application from a Geek

2009-10-27T15:59:00.000+11:00

11. Star Wars action figures are listed in the asset table.
10. Mortgage amount requested is a prime number.
9. Application returned with post-it notes showing where the UI could be improved.
8. Contact information consists of a Twitter user name and a Facebook page.
7. All the corners have been cut off the pages of the application.
6. Dollar amount written in hex.
5. At the bottom it's noted that all information enclosed is protected under the creative commons license.
4. Applicant suggests rolling 1d20 against AC instead of checking his credit score.
3. Home address listed as 127.0.0.1
2. It's printed on caffeinated paper.
1. There's already illegal copies of it on all the torrent sites.

Strong Aussie dollar bane for agents

2009-10-27T15:57:00.001+11:00

The rising Aussie dollar, though perceived by many as a sign the economy is improving, leaves many real estate agents bashing their heads against the wall.

A rising dollar means overseas investors are less likely to spend their money on Australian property.

Colliers International director of residential Murray Wood said the rising dollar had blunted interest in the residential market from foreign investors.

“If overseas buyers are converting their currency into Australian dollars now, then their budgets for buying a house will have certainly changed,” Mr Wood said.

Jellis Craig agent Robert Ding agrees that overseas investors are more reluctant to purchase properties with the Aussie dollar sitting so high.

“I think the Asian buyers are more cautious. They are slowing down at the moment and they have stopped being aggressive and silly with their money,” he said.

“When the Australian dollar was sitting at 65 cents, things were different. The Australian dollar does affect their decision but they will still buy because of the security of the land in Australia; they love the freehold land,”

Banks may face higher costs

2009-10-27T15:52:00.001+11:00

Banks may soon face higher costs thanks to the implementation of new liquidity rules, according to the Australian Prudential Regulation Authority (APRA).

Earlier this month APRA proposed some changes to the liquidity rules currently governing the industry after saying the existing rules were insufficient.

APRA executive general manager of policy, Charles Littrell, told a Senate estimates hearing yesterday the banks would have to develop new systems and reorganise their balance sheets to comply with the liquidity proposals.

Under the new proposals, banks could be forced to increase the number of liquid assets they hold as protection against short term loss of access to global capital markets.

They would have to have enough liquid assets to survive on their own for a month, rather than one week as it is currently stipulated.

Moreover, bank bills and mortgage backed securities would no longer qualify as liquid assets, only high quality assets such as government bonds would qualify.

Housing affordability slides

2009-10-27T15:51:00.000+11:00

Housing affordability has deteriorated for the second consecutive quarter, according to the latest Housing Industry Association-CBA First Home Buyer Affordability Report.

According to the report, affordability slipped 3.3 per cent in the September quarter, but was still 35.7 per cent ahead of the same time last year.

HIA senior economist Ben Phillips said that the demand for homes had picked up during the quarter in a climate of record low interest rates, the first home buyers boost, and improving news on domestic and global economic prospects.

“Housing remains more affordable in 2009 than it was through most of the rest of the decade. However, the outlook for affordability is not a good one. Interest rates are on the way up, the first home buyers boost is being wound back, and progress in reducing the structural barriers to increasing new housing supply is slow,” Mr Phillips said.

“If we don’t succeed in significantly lifting the level of new home building over the next few years then there is a very real risk that we will return to the woeful affordability levels of 2007 and 2008.

“The necessary boost to the economy provided by a strengthening housing construction sector is under threat from increased regulation, a slow and increasingly restricted building approvals process, and the same debilitating problems related to land supply, new home taxation, and skilled labour shortages that afflicted the industry last cycle.”

Mortgage Choice unveils groundbreaking Google partnership

2009-10-27T15:49:00.002+11:00

In a bid to enhance productivity, Mortgage Choice is transitioning its staff across to Google Apps – a suite of enterprise and collaboration tools.

According to the company’s chief information officer Neil Rose-Innes, the Google applications will offer Mortgage Choice franchisees a scalable IT platform that centralises a number of tools, including email, so that they can be used from any computer at any time.

“There are three main benefits associated with this transition,” Mr Rose-Innes told Mortgage Business.

“The Google apps will simplify the technology for our end users, which will ultimately improve productivity and efficiency.

“It also helps us reduce our costs by scaling back our reliance on IT support, and finally it can be used anywhere at anytime, which also enhances a franchisees productivity.”

Mortgage Choice has already transitioned more than 470 of its 1,000 staff across to Google Apps including Gmail, and Mr Rose-Innes said the aim is to have everyone operating off the same platform by the end of November.

According to Mr Rose-Innes, Mortgage Choice is the first big brand company in Australia to make the transition.

“We like to think we are sitting ahead of the bell curve,” he said.

Bumper selling weekend ahead: RP Data

2009-10-27T15:49:00.001+11:00

Real estate agents are gearing up for a bumper selling weekend, with more than 1,670 auctions scheduled.

According to RP Data’s national research director Tim Lawless, the number of auctions is one of the highest on record, and if auction clearance rates are anything to go by, more than 70 per cent of the listed properties could be sold under the hammer.

Mr Lawless said the national weighted auction clearance average has been sitting above 70 per cent for the past 15 weeks.

“When clearance rates are high we can assume that there is a healthy level of optimism among buyers and that vendor expectations about the value of their property is aligned with buyer expectations,” he said.

Around Australia, clearance rates have more relativity to some markets than others. Melbourne and Sydney markets collectively represent 85 per cent of the nation’s auctions each week.

At the capital city level, auctions as a method of sale are most popular in Melbourne, where 29 per cent of homes advertised for sale are auction listings. This represents more than double the national average of 14 per cent.

At the other end of the spectrum, auctions in Perth and Hobart are the exception with less than 3 per cent of homes being sold under this method.

Seems like everyone is feeling the GFC lately...

2009-10-27T15:14:00.002+11:00

‘Lying’ agent’s appeal thrown out of court

2009-10-27T15:13:00.000+11:00

A Perth real estate agent’s appeal to have his life-long ban from the real estate industry lifted has failed.

Michael Mavadaat, the principal of Aplecross-based Key Realty, was last year disqualified from practicing for lying, creating false documents and earning an ‘unjust’ commission.

According to a report on WAToday.com.au, Mr Mavadaat was found by the State Administrative Tribunal to have acted without valid authority, demanded and received an unjust $133,000 commission for a Subiaco property sale, created various fake documents, lied in an affadavit in a civil proceeding, made unauthorised use of funds in the firm's trust account and falsely claimed to hold a Bachelor of Science degree from the US.

Mr Mavadaat’s attempt to appeal the decision was thrown out of court this week after the court said it found it “difficult to see” how the tribunal could come to any other decision.

Refund Home Loans to defend ACCC claim

2009-10-27T15:12:00.000+11:00

Refund Home Loans managing director Wayne Ormond has found himself in hot water after the Australian Competition and Consumer Commission (ACCC) accused him of breaching the Trade Practices Act (1974).

According to the ACCC, Mr Ormond and his company made false and misleading representations about having a special relationship with the ACCC.

It is alleged Mr Ormond made statements over a number of years to current and former franchisees to the effect that the ACCC advised Refund Home Loans about their conduct towards franchisees and approved action taken by Refund Home Loans in respect of franchisees and former franchisees with whom it was in dispute.

Mr Ormond told Mortgage Business that he strenuously denied the claims made by the ACCC and would vigorously defend the accusations in court.

“This complaint, by two of my ex-franchisees, was made two or three years ago. I certainly have no issues with my current franchisees and no complaints have been made recently,” he said.

The ACCC has commenced court proceedings against Mr Ormond and Refund Home Loans and a scheduling conference has been listed for 4 December 2009.

Access to wholesale funds challenging: KPMG

2009-10-27T15:11:00.000+11:00

In a sign that access to affordable wholesale funds remains challenging for Australia’s smaller banks, the country’s regional banks recorded a slim combined net profit of just $494 million for the 2009 reporting year.

According to accounting firm KPMG, the profit was modest in comparison to recent years when double digit growth was common place.

“The regional banks came into 2009 expecting it to be a challenging year and they were right.

“The two largest regional banks were acquired by two major banks; the government guarantee helped in terms of deposits but disadvantaged the ‘regionals’ in relation to accessing wholesale markets; bad debt expense has increased markedly; interest margins have been squeezed, and securitisation markets – which prior to the GFC provided the ‘regionals’ with much of their funding – are effectively closed,” KPMG banking partner Martin McGrath said.

According to Mr McGrath, the regional banks have come through a tough year to achieve a better-than-expected result.

The outlook for the next year will now depend on access to funds at an attractive price.

“Access to the wholesale markets at a price that offers profitable growth remains a challenge,” Mr McGrath said.

“In this context, the differentiated pricing of the government guarantee remains a hurdle for the smaller regional banks.

“There may be an opportunity for the regional banks to increase scale through targeted acquisition. This could facilitate cost efficiencies and potentially assist in accessing funding markets.”

RESIMAC sells $230 million RMBS

2009-10-27T15:10:00.001+11:00

In a sign that the wholesale funding market is thawing, RESIMAC has sold more than $230 million of residential mortgage backed securities (RMBS) to private investors.

The main class of bonds, which fetched $185.1 million, priced at 140 basis points more than the one month bank bill swap rate.

Fund managers said the deal attracted strong demand from private investors.

The Australian Office of Financial Management bought $56.4 million of the notes, while the remainder was sold between 11 other investors.

Liberty cuts rates on all residential products

2009-10-27T15:08:00.000+11:00

In contrast to market conditions that point to upward rate movements, Liberty Financial will today drop rates on all of its residential loan products.

The non-bank lender believes that the move will help inject competition into a broker market that is currently dominated by the big four banks.

“We are committed to offering real alternatives to business partners and customers,” Liberty Financial general manager of personal business Kendall Mahnken said.

“We are sharpening the pricing across the board for our residential loan products reflecting the recent run of positive economic data.

“With changes in all products and at all risk grades, our loans will continue to have the broadest solution set with some of the most competitive prices available.”

And according to Ms Mahnken, brokers can expect today’s announcement to be just the first of a number of initiatives from the non-bank lender.

“Liberty will announce further product enhancements over the next few weeks, covering all aspects of our residential loans,” Ms Mahnken said.

Please try and send us something funnier than this...

2009-10-27T14:53:00.003+11:00

Fixed or floating interest rate?

The Search Is On!

2009-10-27T14:36:00.005+11:00

We are starting our search for funny, amusing or just odd pictures and articles involving the mortage industry. Send us your funny stuff att: Justine, info@acphomeloans.com.au

Anyway here is our first pic... "Chase Mortgage Ad From 2005 Is Funny And Scary", from where else but the US - in hind sight, a mighty fine example of just one person's contribution to the recent GFC. "Thanks"

Rate rises to create balance: Ray White

2009-10-27T14:30:00.000+11:00

Wednesday, 21 October 2009
With another rate rise in November now all but certain, some real estate agents are worried that potential property buyers could be deterred from investing in the market.

However Ray White real estate chairman Brian White believes rising interest rates are positive as they help to restore balance in Australia’s residential real estate market and prevent a price explosion.

“There’s nothing worse than a market getting out of control and the residential market has been remarkably strong over the last four or five months,” Mr White said.

“A booming housing market produces very few long term benefits. Sure it’s great for sales over the short term but then comes the hangover and the pain.

“Lifting interest rates from near record lows now will help reduce the need for any draconian steps later and it will help create a well balanced market.”

According to Mr White, the gradual movement to more traditional interest rate levels will also help ensure house prices keep pace with inflation.

“We’ve lived for decades with interest rates much higher than they are now and I have little doubt we’ll be absorbing the latest interest rate rise and the other expected increases quite comfortably,” he said.

US commercial prices slide

2009-10-27T14:29:00.000+11:00

Commercial property values in the United States dropped in August as job losses cut demand for office space.

According to figures from Moody’s / REAL Commercial Property Price Indices, prices fell 3 per cent from July to August, bringing the market’s decline to 41 per cent since its peak in October 2007.

Moreover, property price values are forecast to fall an additional 17 per cent though the fourth quarter of next year due to rising vacancy rates and the risk of forced sales, according to a report by Goldman Sachs Group.

Office vacancies are currently sitting at a five year high of 16.5 per cent.

NAB Broker launches new division

2009-10-27T14:28:00.000+11:00

Wednesday, 21 October 2009
National Australia Bank (NAB) has created a new NAB Partnerships division that will be responsible for NAB Broker, the new aggregation arm of the business as well as mortgage management.

Speaking at the NAB Broker roundtable yesterday, newly appointed general manager of distribution for NAB Broker, John Flavell, said the new division, currently referred to as ‘New Co’, would create further lending opportunities for brokers.

“We want to ensure competition in the market and NAB Partnerships will help us achieve just that,” Mr Flavell said.

The ‘New Co’ arm of the business includes PLAN Australia, Choice and FAST and will be renamed at the end of the month once the acquisition of Challenger’s mortgage management business is formally completed.

According to Mr Flavell, NAB Broker is gearing up for a myriad of changes, many of which spell good news for their broker channel.

“It is a time of cautious optimism. Interest rates will rise and as they do, borrowers are more likely to look for advice,” he said.

NAB Broker is encouraging its broker channel to diversify their offering to include advice, with Mr Flavell telling Mortgage Business that advice-based broking was the way of the future.

“There are many benefits associated with advice-based broking, including improvements to a broker’s bottom line. Brokers will be able to make more revenue from each client while helping to meet their insurance and home loan needs.”

Interest rates to rise in November

2009-10-27T14:27:00.000+11:00

The Reserve Bank of Australia (RBA) looks set to lift rates again in November.

According to the minutes of the monetary policy board meeting, released yesterday, the RBA agreed that the risks in leaving the official cash rate at its emergency low had increased.

“Keeping interest rates at very low levels for an extended period could threaten the achievement of the inflation target over the medium term,” the minutes read.

“More generally, very expansionary policy could result in the build-up of other imbalances in the economy, which would ultimately be detrimental to economic growth.”

The RBA minutes noted that there was a possibility that the strength in the domestic economy had been largely due to the greater than expected impact of the fiscal stimulus, which left open the attendant risk that activity might slow as that stimulus faded.

It was also likely that the appreciation of the exchange rate would act as a contractionary influence on activity and help contain inflation.

While these considerations weighed in favour of keeping the current cash rate on hold, the RBA said it was “possibly imprudent” to keep rates at their low for another month, fueling speculation that interest rates are set to increase again next month.

NAB chief economist Alan Oster said he expects rates to rise 25 basis points in November and another 25 basis points in December, taking the official cash rate to 3.75 per cent before the end of 2009.

APRA approves NAB / Challenger deal

2009-10-27T14:26:00.002+11:00

Wednesday, 21 October 2009
NAB's acquisition of Challenger’s mortgage management business has been given the final go-ahead by the Australian Prudential Regulation Authority (APRA).

The bank regulator confirmed this week that it would not intervene in the acquisition, less than two weeks after the Australian Competition and Consumer Commission (ACCC) gave the deal its seal of approval.

NAB Broker’s head of strategy, marketing and operations Elyse Sainty welcomed APRA’s decision.

“This [was] the last hurdle we have to overcome. We are very happy that the deal has been given the green light by APRA because it means we can push ahead with our plans for the mortgage management business,” Ms Sainty told journalists at the NAB Broker roundtable yesterday.

Those plans involve re-branding the mortgage management business.

According to Ms Sainty, a name for the company has been decided upon and will be announced at the end of the month once the acquisition is formally complete.

The new company, which is currently referred to as the "New Co", includes aggregation groups PLAN Australia, Choice and FAST.

No change to guarantee: Swan

2009-10-27T14:26:00.001+11:00

The federal government has quashed rumours that it is set to overhaul its $110 billion bank funding guarantee.

The guarantee has come under attack in recent months as its existing price structure is believed to punish the smaller banks.

Federal treasurer Wayne Swan said the government would continue to monitor the program but ruled out making any substantial changes after announcing an extra $8 billion investment in mortgage securities.

Under the guarantee, smaller lenders with lower credit ratings are forced to pay higher costs than the big four banks.

Banks with a AA credit rating pay an annual fee of 0.7 per cent for the government guarantee, while those with an A rating pay 1 per cent and those with a BBB rating pay 1.5 per cent.

Bank of Queensland chief executive David Liddy said yesterday that the guarantee had cost the regional bank upwards of $10 million.

“It has been a competitive disadvantage to us in terms of access to the tune of about $10 million impact on our bottom line this year as a result of paying 80 basis points more than a major pays,” Mr Liddy told an investment conference in Sydney.

Legislation delay gets broker approval

2009-10-27T14:24:00.000+11:00

The majority of brokers agree that the decision to delay broker legislation was the right one, according to a recent straw poll.

Earlier this month, the Australian Securities and Investments Commission (ASIC) decided to push back the start date for the registration and licensing of brokers by six months.

Originally scheduled for 1 November, brokers will not be able to apply for an Australian Credit Licence until 1 April next year.

While the decision was disappointing for those brokers that were eagerly awaiting the implementation of the new regime, the majority believe it is the right thing to do, according to the results of a recent Mortgage Business straw poll.

Of the 460 respondents, 65.9 per cent believed delaying the licensing regime was the right decision by the ACCC while 28.9 per cent thought it was the wrong thing to do; 5.2 per cent were unsure.

Bernie Sutton of the Mortgage Guys told Mortgage Business that delaying the legislation was the right decision because none of the legal requirements had been identified.

“The industry does not even know what these laws will bring, so I believe it was premature for the government to put a timeframe on registration when the ramifications of the legislation is not clear,” he said.

“The legislation needs to be implemented in stages; it needs to be progressive so that the industry can be abreast of the changes ahead of time. This legislation has the potential to bring the industry to a halt, forcing brokers that are not up to speed with all the requirements out of mortgage broking.”

Early last month, the MFAA took a hard line with brokers that had failed to complete their Certificate IV in Financial Services, terminating 1,500 memberships.

At the same time, Mortgage Business found that one third of brokers were not ready for the new legislation.

Obama breathes new life into US FHB market

2009-10-20T10:09:00.001+11:00

The Obama administration has launched a new program that will help the depressed US housing market, including state and local housing finance agencies to borrow from the US Treasury.

According to Reuters, the program aims to restart a source of mortgage financing for first time and low income buyers that have been shut out of the market by lending constraints.

"Through this initiative, the administration aims to help... jump start new lending to borrowers who might not otherwise be served and to better support the financing costs of their current programs," US treasury secretary Timothy Geithner said in a statement.

According to the Virginia Housing Development Authority, state and local housing finance agencies have only been able to issue approximately $4 billion in tax exempt bonds, compared to $16 billion annually about two years ago.

FHBs retreat from market but sector still robust

2009-10-20T10:07:00.000+11:00

The record level of purchases by first home buyers have started to taper down and will continue to do so in the months ahead, according the Real Estate Institute of Australia (REIA).

REIA president David Airey said he expects to see the number of first home buyers drop back down to normal levels after seeing a 50 per cent increase on the usual market number over the last financial year.

"The reduction in first time buyers will certainly have an effect in the $250,000 to $450,000 price range, which is typically where these buyers aim for.

“Properties in this range could see sales decline but it will be a limited affect and probably not noticeable until the first quarter of next year," Mr Airey said.

According to Mr Airey the boost, not interest rates, will have the biggest effect on first home buyers.

"While interest rates are a worry, responsible lenders have been pricing in interest rate rises for quite some time when they calculate the borrowing capacity of first home buyers,” he said.

"Given that we have been expecting up to about a two percentage point increase for some time, it should be in the capacity of most people."

Resi consumer advocate Lisa Montgomery agreed with Mr Airey and said the 25 basis point increase was not enough of a rise to truly affect first home buyers.

"It might make some people more cautious but it shouldn't knock too many out of the market altogether,” she said.

"Buyers really need about a 2 per cent buffer to keep them prepared for further rises over the next one to two years.

"I think those first home buyers in play at the moment will stay in play until they lock in a purchase. Winding back the boost payments for these buyers really isn't going to make much of a difference either.

"With low-end prices at $300,000-plus, the cut-back of a few thousand dollars in a bonus grant should not stop anyone from making their purchase.”

Swan hits out at stimulus jibes

2009-10-20T10:06:00.000+11:00

Federal treasurer Wayne Swan has hit back at claims by the opposition that the fiscal policy was instrumental in the official cash rate rise.

Former treasurer Peter Costello suggested the stimulus policy was a ‘low quality’ outlay and said the government should have relied on higher welfare payments rather than discretionary spending.

However, Mr Swan has backed his decisions, citing the Access Economics report released yesterday which showed the stimulus policy had helped shield Australia from the worst of the recession.

Mr Swan said the coalition wanted to see interest rates stay at their 50 year lows forever, but “they cannot and those opposite know it,” he said.

The treasurer pointed to recent comments by Reserve Bank of Australia governor Glenn Stevens which suggested that interest rates had risen on the back of a recovering economy.

Small businesses suffer as lending tightens

2009-10-19T13:19:00.000+11:00

Small business owners are struggling under tighter credit conditions and higher interest rates, despite the improving economic outlook.

According to a report in today’s The Australian Financial Review banks are charging small businesses almost double the margin that large businesses pay over the official cash rate and well over double the margin charged to home borrowers.

Figures from the Australian Bureau of Statistics (ABS) show that the average cost of bank finance to small businesses in August was 7.2 per cent – 4.2 percentage points over the official cash rate.

With bank margins on mortgages rising back to pre-crisis levels, the federal government has warned the banks against moving their rates by more than the Reserve Bank of Australia’s (RBA) shifts to the official cash rate.

"I've made it very clear [that] the government expects the banks to behave in the way in which they should behave and the way in which they've traditionally behaved – that is, that they will pass on the official cash rate increase and no more," treasurer Wayne Swan said last week.

However, smaller business may receive no such luxury with the Commonwealth Bank of Australia’s (CBA) executive general manager of small business Symon Brewis-Weston saying business lending is kept entirely separate from mortgages.

“Unless you see some abatement in that wholesale funding marketing, whether it’s two or three months, you will see some place move beyond any move in the official cash rate,” Mr Brewis-Weston told the daily.

According to Mr Brewis-Weston, large businesses have lower lending rates because the companies can access money through equity markets by issuing commercial paper.

Coastal markets to enjoy future growth

2009-10-19T13:18:00.000+11:00

Now is the best time for potential property buyers to grab a coastal bargain, according to RP Data’s national research director Tim Lawless.

Mr Lawless is encouraging prospective buyers to take a good look at the coastal regions while house prices are relatively low and competition subdued.

“Based on our findings, the indications are clear that this market is now turning. I believe that many of these lifestyle markets have seen the worst of times,” he said.

According to figures from RP Data, the number of home sales has increased by 37 per cent since bottoming twelve months ago and the time it takes to sell a property is becoming shorter.

Mr Lawless said this turnaround in market conditions is coming from a low base and most coastal lifestyle markets still represent opportunistic buying.

Generally he believes that prices are still lower that what they were last year and the level of negotiation to be had by the buyer is still typically higher than what they would experience in the metro areas.

“The popular coastal markets are still much more affordable than they once were and market conditions are still in favour of the buyer. For these reasons now may be a good time to be positioning in the market for future growth,” he said.

Clearance rates dip in major cities

2009-10-19T13:17:00.000+11:00

Weekend auction clearances dropped slightly in Sydney and Melbourne over the weekend, with both cities achieving less than 80 per cent, according to Australian Property Monitors.

In Melbourne, 183 of the 239 properties up for auction were sold for a clearance rate of 75.3 per cent – down from the 79.3 per cent recorded last weekend.

In Sydney, $98.6 million in property was sold for a clearance rate of 62.2 per cent. Of the 206 properties listed for auction 145 were sold.

A four bedroom house in Castlecrag registered the highest sales price of $1.84 million; while a two bedroom unit in Warwick Farm was cheapest at $151,000.

While Sydney’s 62.2 per cent clearance rate was significantly higher than the 49.2 per cent recorded this time last year, it was still a fall from the 65.0 per cent recorded last weekend.

Adelaide and Brisbane achieved similar clearance rates over the weekend, achieving 53.1 per cent and 50.0 per cent respectively.

In Adelaide, 17 of the 30 properties listed for auction were sold for a combined total of $9.6 million, while 15 of the 29 properties listed in Brisbane were sold for $9.0 million.

NAB changes Homeside price structure

2009-10-19T13:16:00.000+11:00

National Australia Bank Broker (NAB Broker) has changed the structure of its Homeside brand, revising the way it calculates Homeside HomePlus variable rate loans.

Effective immediately, the new HomePlus variable rate loan will be based on a customer’s total Homeside lending and the Loan to Value Ratio (LVR) on the new application.

For new loan applications with total Homeside lending of $250,000 or more, and where the LVR is up to 75 per cent, the new rate will be 5.22 per cent p.a.

NAB Broker’s head of broker sales John Flavell said the new rate reflected NAB’s ability to create specific solutions for brokers via its broker-only brand Homeside.

“Brokers are in a good position to identify customers that fit the lower LVR profile and offer them this low rate solution,” Mr Flavell said.

“Typically loans with lower LVRs do not require a valuation (with a contract of sale) or mortgage insurance, and are on average more straightforward to underwrite.

“This means we can process these loans very quickly where all supporting documentation is provided upfront, and so deliver a great service experience to brokers and their clients.

“It also means that the cost of application processing for these loans is lower than for higher LVR applications,” he said

Unemployment to peak at 6.8pc: Access Economics

2009-10-19T13:15:00.000+11:00

Australia’s unemployment rate is expected to reach 6.8 per cent in mid-2010, a far cry from the 9 per cent predicted by some analysts earlier this year.

According to Access Economics’ September business outlook, Australia’s job market is more flexible than it has been in past recessions, with people losing hours rather than jobs.

The report also said the Reserve Bank of Australia (RBA) would lift interest rates by 2 percentage points over the next 18 to 24 months, with cash rates reaching 5 per cent by early 2011.

“The economy is slowly returning to normal, and that return to ‘normal’ in the economy means a return to ‘normal’ for interest rates,” the report said.

“Recovery will see underlying inflation back at or above 3 per cent by early 2011. And the economy can expect to see growth in the economy back at 3 per cent – trend – at about the same time.”

RateCity marks strong application growth

2009-10-16T14:41:00.000+11:00

Online mortgage provider RateCity has registered a 68 per cent jump in loan applications in August 2009.

According to RateCity chief executive officer Damian Smith the result highlighted a growing shift to how borrowers shopped for financial products.

“Never before have we seen such a significant rise in applications for home loans at RateCity, which shows how quickly the market is changing for how we shop for financial products.”he said.

September applications were also strong, Mr Smith said.

Compared to September 2008, the number of home loan applications in New South Wales grew 32 percent in September 2009.

There were 28 per cent more home loan applications in Victoria, 15 per cent more in Queensland, 26 per cent more in Western Australia and South Australia saw a 22 per cent rise.

The Northern Territory saw the biggest growth of 66 per cent, while the Australian Capital Territory experienced a 30 per cent rise.

“As the housing market races into recovery and interest rates are likely to rise further in 2010, we expect to see continued growth of home loan applications at RateCity as Australians seek better value deals,” Mr Smith said.

Reverse mortgages market grows

2009-10-16T14:39:00.001+11:00

Reverse mortgages have increased in popularity with older Australians, a new study has found.

According to the report by Deloitte Actuaries and Consultants, the local reverse mortgage market grew by 13 per cent over the last financial year, measured by outstanding balances after 4,950 new borrowers entered the market.

The average age of the reverse mortgage borrower is 74, the report said.

The report also found that the main reason for taking out a reverse mortgage was to receive a regular income stream in retirement, followed by debt repayment and home improvement.

Senior Australians Equity Release Association chief executive, Kevin Conlon, said the report showed borrowers were using their reverse mortgages appropriately – with many choosing to repay their debt in full each year rather than let the debt build up until death.

"Senior Australians are continuing to show restraint when releasing equity through reverse mortgages, shown by borrowers, on average, only choosing to access about 70 per cent of the actual funding available to them," Mr Conlon said.

Mortgage broker faces $6.1m fraud charges

2009-10-16T14:38:00.001+11:00

A broker, who already stands accused of defrauding up to $5 million from his clients, has been charged with new offences involving a further $1.1 million.

Samer Hraiki yesterday faced a further five charges of obtaining money by deception.

In July, his lawyer told the court Mr Hraiki had encountered financial difficulties while developing a property in Kings Cross that would have realised tens of millions of dollars in profit.

At the time, Magistrate Allan Moore commented that at one point there had been $5 million worth of dishonest activities.

The new charges cover dates between September 2006 and April this year.

In July, it was reported that Mr Hraiki had allegedly taken more than $490,000 from one victim.

He was once again refused bail and will re-appear in Court on 8 December.

House prices tipped to climb 20pc

2009-10-16T14:37:00.001+11:00

Research from BIS Shrapnel suggests house prices will rise by nearly 20 per cent in the next three years.

The rise would add more than $100,000 to the average house price.

According to an article in The Herald Sun, BIS Shrapnel found that house prices will rise by 3 per cent this financial year and 8 per cent in each of the following years.

The research, conducted on behalf of QBE Lenders' Mortgage Insurance, said the shortage of dwellings and soaring population were combining to create the perfect environment for property investors.

"Upgrader and investor demand is expected to gather momentum and take over as the main drivers of the housing cycle," QBE chief executive Ian Graham said.

According to Mr Graham, recent job security fears had held many potential buyers back from entering the property market.

Economic and employment growth is forecast to continue to slow until the middle of next year, when stronger growth is tipped to unleash a new batch of confident buyers.

Low Sydney vacancy rates good for investors

2009-10-16T14:35:00.000+11:00

Sydney’s rental property market is in a stalemate, figures from the Real Estate Institute of NSW (REINSW) have found.

According to the REINSW, the number of vacant rental properties across the city and in Newcastle remained stable at 1.3 per cent in September despite incentives designed to encourage people to buy homes.

The number of vacant rental properties in Sydney's outer suburbs rose by 0. 1 per cent to 1 per cent, while vacancies in the inner suburbs fell slightly to 1.4 per cent.

In the Hunter Valley rental vacancies fell 0.1 per cent to 1.5 per cent.

In the Illawarra, overall vacancies rose 0.4 per cent to 1.7 per cent while in Wollongong, the percentage of available properties increased 0.3 per cent to 1.6 per cent.

"These results are a double-edged sword; great news for landlords but grim news for tenants," REINSW president Steve Martin said.

"The results for Sydney and Newcastle are concerning and show that despite a low interest rate environment and additional first home buyer and other buyer incentives, the rental market remains extremely fragile."

According to Mr Martin, the current vacancy rates are unlikely to change in the immediate future.

CBA, NAB deliver lowest comparison rate of the majors

2009-10-16T14:33:00.001+11:00

While all of the big banks passed on this month’s 25 basis point rate increase by the Reserve Bank of Australia (RBA) in full, a narrow spread of 0.07 per cent remains between the comparison rates on the major’s standard variable rates.

At 6.12 per cent, the Commonwealth Bank of Australia (CBA) and the National Australia Bank (NAB) have the lowest comparison rate, fractionally ahead of the Australian and New Zealand Banking Group’s (ANZ) 6.16 per cent and Westpac’s 6.19 per cent.

The RBA is widely expected to push the official cash rate higher in the coming months, which would see comparison rates climb further. There is also the very real chance of banks moving on rates independent of the RBA as funding costs continue to pressure bank margins.

Despite the recent hike to the cash rate, Vincent Turner, business manager of Pisces Communication, told Mortgage Business it was pleasing to see comparison rates were still relatively low.

“It is a great market to buy a property at the moment – especially for investors. Investors are currently getting a 4 to 5 per cent rental yield on their property, which is fantastic seeing as their interest rate would be in the low 6 percentile range,” he said.

However brokers were not just relying on the comparison rate when assessing products for their clients.

Mr Turner also said while the comparison rate allowed brokers to give their customers a better understanding of their home loan, he said more brokers were using annualised percentage rates to show their customers the ‘true cost’ of their loan.

Mortgage Business last contrasted each of the major’s comparison rates in February this year, two months before the RBA reduced the official cash rate to the 49 year low of 3 per cent.

At that time CBA delivered the lowest home loan comparison rate at 5.86 per cent, which reflected a spread between the majors’ comparison rate’s on variable rate products of 0.19 per cent.

St George recorded the highest comparison rate of 6.05 per cent, while ANZ and Westpac offered comparison rates of 6.01 and 6.04 per cent respectively.