Saturday, July 21, 2018

Melbourne Housing Market Update [video] | July 2018

Over the financial year, Melbourne dwelling values increased by 1%, which was the slowest rate of growth in six years and well down on the 13.0% Increase over the previous financial year.

Core Logic has released their newest housing market update for July 2018.

 

Digging below the surface, it`s clear that more affordable housing markets are showing much stronger conditions; likely the result of more first home buyer activity and more broadly, affordabillity constraints.

The most affordable quarter of the Melbourne market has seen dwelling values rise by 9.3% over the past twelve months while the most expensive quarter of the market has recorded a fall of 2.5%.

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YOU MAY ALSO BE INTERESTED IN WATCHING:

NATIONAL HOUSING MARKET UPDATE [VIDEO] | JULY 2018

PERTH HOUSING MARKET UPDATE [VIDEO] | JULY 2018

ADELAIDE HOUSING MARKET UPDATE [VIDEO] | JULY 2018

SYDNEY HOUSING MARKET UPDATE [VIDEO] | JULY 2018

Metropole Property Home Buyers Enquiry

Fewer Transactions Are Occurring Across The Housing Market

Dwelling values are falling and fewer transactions are occurring across the housing market which should create alarms for market participants such as agent, lenders, state governments and brokers that are reliant on housing turnover. Market

Despite dwelling values having only recently started to fall, the number of settled transactions in the housing market has been trending lower since peaking in 2015.

It is important to note that off-the-plan sales are not counted until completion and they are counted at their contract date.

What this means is that there will be some upwards revision to recent sales volumes given the high volume of units currently under construction.

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Nationally, there were 465,788 settled house and unit sales over the 12 months to May 2018.

The annual number of settled sales was -7.7% lower over the year.

The monthly data shown in the chart points to a declining trend in transactions with settled sales now sitting lower than the decade average.

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Over the 12 months to May 2018 there were 84,699 settled house and unit sales in Sydney.

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Although the monthly data points to a slight rebound in transactions recently, likely the result of a surge in first home buyers since July last year.

Annual sales were -13.5% lower over the past 12 months.

House sales were -11.4% lower over the year and unit sales were -16.0% lower.

Monthly sales volumes have consistently been lower than the 10 year average since May 2017.

While there is likely to be some revision as unsettled sales flow through, it remains likely that ultimately sales volumes are lower over the year.

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Settled sales transactions have been trending lower for a number of years in Melbourne which is partly to do with high volumes of units under construction but also strong demand and relatively low supply of housing for sale.

With values now falling, the 83,444 settled sales over the past year was -12.9% lower than the previous year.

House sales are 13.2% lower and unit sales are down -12.4%.

Like Sydney, it seems unlikely that once all off-the-plan properties are completed and settled that transaction volumes will be higher than a year ago.

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Over the past 12 months there were 27,705 settled sales in Adelaide which was 2.5% more sales than over the same period in 2017.

Annual house sales were 0.5% higher over the year while unit sales recorded a much greater 85% increase.

Adelaide is one of only two capital cities in which annual sales were higher over the year and it is also one of the few cities in which monthly transaction volumes are currently above the decade average.

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Perth’s housing market has been in a downturn since 2014 however, there are some early signs that transaction are lifting, albeit for a very low base.

Over the past 12 months there were 30,393 settled sales which was 1.4% higher than the previous year with house sales 1.0% higher and unit sales 3.4% higher.

As the housing market slowly shows signs of improvement sales volumes may continue to climb.

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Although dwelling values in Hobart are increasing at a much faster pace in Hobart than any other capital city, transaction volumes are falling.

This is largely due to strong demand and little supply of stock available for sale (advertised listings are currently around record lows across Hobart).

Over the past 12 months there was 4,915 dwelling transactions in Hobart which was -7.4% fewer than the previous year with house sales down -7.3% and unit sales -7.9% lower.

Monthly sales are currently only marginally higher than the decade average.

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Darwin has recorded 2,018 dwelling sales over the past 12 months which was -5.8% fewer than the previous year with house sales -7.7% lower and unit sales down -2.1%.

Like Perth, Darwin has been in a downturn for a number of years but has seen an increase in transactions over recent months with last month’s sales close to the decade average.

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Monthly transaction in Canberra are sitting right on their decade average however, the chart shows that sales have been trending lower for over a year.

Over the past 12 months, there were 8,310 settled sales which was -10.0% lower than the previous year with house sales down -3.0% and unit sales -16.5% lower. Housing Market Change

With value growth slowing it is reasonable to expect fewer sales over the short-term.

With dwelling values now falling and tighter credit conditions it is reasonable to anticipate that transaction volumes will continue to trend lower.

For sellers this means they will need to be realistic about their price expectations as buyers become more empowered.

As a result sellers will need to ensure their marketing strategy is finely tuned and set appropriate prices in order to achieve a sale.

Fewer sales means less turnover, which in-turn means less commission and less stamp duty revenue for state governments.

Metropole Property Home Buyers Enquiry

Friday, July 20, 2018

A first homebuyer’s guide to loans

Buying your first home is a rite of passage for most young Australians.

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Having a place to call our own is a key part of our psyche so it’s little surprise that first homebuyers are prepared to put in the hard financial yards to turn that dream into a reality.

Buying your first home can seem a little scary because you’re entering new territory as well as taking on the biggest financial commitment of your life.

But it doesn’t have to be that way because they are plenty of professionals out there who can help you manage the process, including applying for a first home buyer loan.

What costs are involved in buying a first home?

 In today’s real estate environment, saving a deposit is the hardest part of the process – and it’s been that way for most generations, too.

Not only have property prices increased significantly in our two largest capital cities over recent years, but lenders are not being as generous as they used to be. 

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That means that first home buyers will generally need at least 10 per cent of the purchase price to buy a home – although there are a few lenders that are still offering 95 per cent home loans.

These will generally require principal & interest repayments from day 1 and may carry a dearer interest rate but they are available.

So, if you’re buying a property worth $600,000, you’ll potentially need $60,000 to qualify for a first home buyer loan.

But – and there’s always a but isn’t there – there are also other costs that you’ll need to pay when your buy your first home.

The prices of each of these vary from state to state, especially stamp duty where some states have concessions for first home buyers, so we won’t give you estimated prices of each here.

Instead, here is a list of the various additional costs you may be faced with when you buy your first home.

These additional costs, excluding stamp duty, can add thousands to the costs of buying your first home – in addition to your deposit.

Don’t panic, though, as some costs can be negotiated down or removed altogether, such as loan application fees, while Lenders Mortgage Insurance can be capitalised on top of your loan as well.

Here’s a list of potential fees and costs – some often forgotten or not accounted for – that you may be required to pay:

  • Legal fees
  • Stamp duty 000
  • Pest and building inspection
  • Loan application or establishment fee
  • Lenders mortgage insurance
  • Document preparation fee/legal charges
  • Bank valuation fee
  • Title insurance
  • Registration of title
  • Council and water rates
  • Body corporate or owners corporation fees
  • Legal searches and enquiries

Whoa, starting to sound daunting? Don’t let it, just make sure you are speaking to the right people to assist you navigate through the maze.

How much can you borrow?

Saving 20 per cent of $600,000, for example, would be quite difficult for many prospective homebuyers so it’s more likely they will have a deposit lower than that amount.

Now it’s important to realise that banks are still lending money, even if they’ve tightened the screws somewhat of late.

So, even if you have five or 10 per cent as a deposit, as well as a good credit history, lenders will still be interested in you becoming one of their home loan customers.

It’s also important to understand which banks are best suited to you, by using a mortgage broker for example, as well as getting a handle on any Lenders Mortgage Insurance implications if your deposit is less than 20 per cent.

Can I get the first home owners grant?

B9998ack then, the grant was available on all types of property and was worth $7,000, which was a substantial proportion of a property’s price in those days.

Since then, the grant has been changed to reflect different economic circumstances.

For example, during the GFC, the grant was doubled to $14,000 for first home buyers of established properties and tripled to $21,000 for new homes to stimulate the construction sector as well as the wider economy.

These days the size of the grant depends on which state you’re buying in as well as which type of property you’re buying.

Most states and territories today restrict first home owner grants to buying or building new properties – again as a way of pepping up the building sector.

Some states, such as Victoria, also provide higher grants for buying or building in regional areas.

Given the first home owners grant is administered by the relevant state or territory government, it’s imperative that you check the eligibility requirements with that authority directly.

What loans are on offer to first home buyers?

These special first home buyer loans can include unique features or lower introductory interest rates. economy property market grow wealth house dream first home

Some of the products on offer may also have reduced or non-existent application or ongoing monthly fees.

In fact, there are so many first home buyer loans on the market that it can confusing for the uninitiated as well as being difficult to determine which one is the right one for you.

That’s why, naturally, using a mortgage broker who specialises in property investment can be a good strategy to navigate the myriad products available.

Disclaimer:

The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.

Missing Middle

What does the future hold for property?

For mine demographics shape almost everything.

Future demographic shape

If that is true, what does Australia’s demographic shape look like over the next decade. 67890 0 300x200

The first table shows that baby boomers, who were helping drive generic house price growth over the past two decades, are now starting to downsize and/or retire.

As a result, the size of both the downsizing and retirement housing market will grow in size over the next decade.

Also coming through are more first home buyers.

This segment is expected to see the largest growth in the coming decade.

High overseas migration – whereby the average age of a new overseas migrant is 29 years – means many more potential first home buyers.

Past and forecast household buyer type

Household buyer type Last decade
Annual change
Next decade
Annual change
Change
No. % No. % No.
Young renters 29,000 23% 14,000 9% -15,000
First home buyers 7,000 6% 29,000  20% 22,000
Upgraders 28,000 22% 18,000 12% -10,000
Downsizers 36,000 29% 47,000  32% 11,000
Retirees 12,000 10% 26,000  18% 14,000
Aged 14,000 11% 14,000 9% 0
Total households 126,000 100% 148,000  100% 22,000

Some comments

Most aging baby boomers look to downsize/retire in their local area. 

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But most are not that interested in trading in their detached home for a tight mid-to-high rise apartment.

A ‘middle ground’ product is really wanted.

Better still, is one which can accommodate a relative, grandchildren, visitors, a tenant and in due course, a carer.

First home buyers often need assistance to help pay the mortgage.  Many now take in a tenant.

My Housing Demand Model

Our modelling suggests that over the next decade more housing that fits between a small apartment (often downtown and in large, soulless complexes) and traditional detached homes will be needed.

This housing is often, these days, described as the “missing middle”.

See the schematic below.

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More detail

Breaking this demand down further, our work suggests that the demand for housing that caters for sharing is very high – up to 25% – over the next decade.

At present, less than 5% of Australia’s existing housing stock successfully caters to this market.

See the second table for more detail.

Next decade by dwelling type

Dwelling type Single occupancy Multi-occupancy Total demand
Detached houses on land > 400m2 20% 10% 30%
Detached houses on land < 400m2 15% 5% 20%
Townhouses/villas/terraces/Plexes 15% 5% 20%
Apartments 15% 5% 20%
Age-related care 10% 10%
Total demand 75% 25% 100%

End note

Looking forward, I believe that many Australians will be forced to compromise on their housing.

This is already happening in many locales.

And if I am right – what is often labelled as the “missing middle”these days – should better weather the storm.

To that end, multi-occupancy property is looking more promising rather traditional housing. Investment Property

This applies to owner residents as well as investors.

For investors, multi-occupancy product already shows a much higher return than most other housing types.

More people are sharing accommodation and a key to getting a better rental yield is to hold property that facilitates sharing.

For mine an astute passive investor will buy strategically for a rental return and not just buy a common property in anticipation of generic price growth.

They will also buy a property with strong owner-resident resale appeal.

This increasingly will mean a dwelling which appeals to multi-generational households.

The 12 steps to buying your first own home

Okay, so you’ve decided that you’re tired of living in your rental property or with mum and dad.

You now want to become one of the millions of Australians who own their own home.

So now what do you do?  Here are 12 basic steps:

6040 7899s 20151. Check out your financial position

First you need to understand your current position.

How much deposit have you saved?

Work out your income and expenses to determine what you can afford to repay on a home loan each month. (A quick tip – don’t include your current rent in your expenses as this outlay will disappear when you buy a home.)

And before you approach the bank check your credit history to make sure you have no black marks against your name.

2. Try to reduce any existing debt

Resist the urge to overspend while you’re saving.

To increase your borrowing capacity use some of your savings to pay down your consumer and personal debts; things like credit cards, store cards and other loans.

And if, like many Australians, you’ve got multiple credit cards, cancel a few.

This will increase the amount the banks will lend you, because even if you don’t spend the limit available on your cards, the banks assume you could.

ad_build_wealth3. Consult a finance broker

to work out what you can afford, what type of finance packages are available to you, what you’ll need to qualify for a home loan and how much you’ll require for a deposit.

It’s good to get a pre-approved for a loan before you start house hunting, so you know exactly how much you have to spend. This means the bank agrees to approve a loan up to a particular amount subject to a few conditions including valuing the property you plan to purchase.

4. Don’t forget the hidden expenses of buying and owning a home

Allow at least an additional 5% above the cost of your property cover purchasing costs such as building and pest inspections, conveyancing fees, stamp duty and a little more for buyer’s agency fees if you’re using one.

By the way…having a buyer’s agent to level the playing field for you makes a lot of sense.

After all, the vendor has an agent on his side working for him.

6040 790s 20155. If you’re having difficulty

getting lenders to give you a loan for the type of house you want, you’ll have to budget and continue saving for a bigger deposit.

Or you’ll have to be more realistic with your expectations.

Remember, your first home won’t be your last home so be realistic.

Don’t expect to start in the type of property it took your parents 30 or 40 years to achieve.

6. Narrow down your criteria for the type of home you are looking for

Decide on your priorities now and for the future.

What will your home look like? What sort of area would you like to live in?

What type of schools and shops will you find in your neighbourhood?

7. Start looking for your dream home

Start with the online portals such as com.au and doing a bit of research to see what’s available – determine how much house your money can buy in the suburbs of your choice.

8. Educate yourself

so you can understand your financial options.Your house is not only your home but an investment, so you will have to learn a bit about the property market and finance.

9. Get a feel for the real estate market

Attend ‘Open For Inspections’ and auctions to get a feel for the real estate market you’re interested in and learn what you can expect to get for your money.

Get used to talking to real estate agents so they don’t intimidate you.

Or you could engage a proficient buyer’s agent to do this for you.

10. When you find a home you love – do your due diligence

Get a solicitor to check the contract and a building and pest inspector to look for faults.

Mortgage And Credit Concept11.  Start making offers

Once you feel confident you know your local market start making offers on the homes you want and eventually one will be accepted.

Don’t be afraid to negotiate on price, particularly today where the market has turned in favour of the buyer.

The odds are the vendor will be flexible because they want to sell their property just as much as you want to buy it.

And don’t be surprised if you feel a little buyer’s remorse a few days after the deal is done – that’s normal after any big financial commitment.

12. Congratulations

You’ll soon be the proud owner of your new home and have a foot on the ladder of the property market.

This article was originally published on homely.com.au

Metropole Property Home Buyers Enquiry

What’s the best way to engage an agent to sell your property?

All too often property owners sign up an agent and engage them to sell their property as either their sole agent or exclusive agent without really appreciating the difference between the two.

Some investors too think that they should only ever sign a sole agency just in case they sell the property themselves and can therefore avoid payment of commission.

Careful thought needs to be given to this issue.  property buyer

You may not be as cute as what you think you are in reserving to yourself the right to sell a property under a sole agency and theoretically avoid paying commission to the agent.

At the end of the day are you really going to put that much effort into selling the property yourself and if you are, then that raises the whole issue of whether you should be doing the whole job yourself and not sharing it with an agent.

Not thinking this matter through can be a great disservice to yourself. 

If you engage an Agent it is important not to disincentiveise them. 

You must ensure that you are both working together as a team if you are having some involvement in the sale process yourself.

Let’s just start then with the basics. 

There are three ways that you can engage an agent.

Open Listing

This general style of appointment means that the agent only gets paid if they themselves find a Buyer and sell the property.  

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If you or another agent sells it then no commission is payable to them.

You appoint many agents under this appointment structure.

One of my experienced builder/developer clients only ever appoints agents on this basis on the principle that:

“I just let them all fight it out amongst themselves about who gets what commission.

I don’t want to be playing favourite and engaging one to the exclusion of the other, let alone trying to sell it myself under a sole agency. 

I like the open market approach where the best man wins. So I just engage them all.” 

I couldn’t have put it better myself.

Sole Agency

Under this method of engagement only one agent is officially engaged and the agent will always get paid if they or another agent sells the property, but not if you find a Buyer and sell it yourself.

An agent will generally not feel so vulnerable about only being appointed as a Sole Agent, rather than an Exclusive Agent, if you have really done this to allow yourself to sell the property if your neighbour say, makes an offer to buy the property from you direct after you list it for sale. 

That chance is usually more of a fluke than anything else and that is why a lot of agents generally won’t feel threatened by it and often will agree to it.

Exclusive Agency agent house

This is the ultimate recognition of your confidence and/or loyalty in an agent as you appoint them (eliminating all others) to sell the property for a fixed period.

With residential property this is usually for 60 days and with commercial real estate typically 90 days from date of commencement of the marketing program.

Regardless of who secures the outcome of selling the property (yourself, the agent or any other agent) the Exclusive Agent will get full payment.

A case study:

To appreciate this issue of disincentiveing the agent and the importance of ensuring that all efforts to sell the property are a team effort, let me share with you a couple of real life examples where people genuinely appointed the agent as a Sole Agent, and not Exclusive Agent, without this working against them. 

One case was the sale of a very large cattle property in New South Wales where the owner of the smaller adjoining property had on many occasions at local district social events told the owner that if they ever wanted to sell the property, and actually put it on the market for sale, they would welcome the opportunity to buy it. 

When the owner eventually advised them that they were now sellers the neighbour still showed some interest in acquiring it, but not enough to sign a Contract of Sale. 

So, the owner approached their favourite Agent to start an Auction sales program. auction graph sale sell house property

Some serious negotiation however took place between the agent and the owner about whether the owner appointed them as their Sole Agent or Exclusive Agent (the owner didn’t want to pay commission if the neighbour did eventually buy).

The agent pointed out that if they accepted an engagement as Sole Agent and the neighbour bought the property, all of their efforts and hard work would amount to nothing as they would receive no remuneration.

The owner’s point was that if the neighbour bought it then this was as a result of their efforts and not the agent’s, so why was it fair that they were paid anything.

The compromise reached between them was that the agent was engaged as an Exclusive Agent but on the basis that if the property was sold to the neighbour (and the neighbour signed the Contract of Sale before the auction date), then no commission would be payable as the Seller’s claim about the sale being brought about as a result of their efforts was valid.

The agent’s point was though (and the Seller agreed) that if the Buyer came to the auction and bought on or after the auction then it was as a result of the agent’s good work and marketing efforts that they bought the property and therefore commission should be payable. 

A sensible and reasonable comprise and one that ensured that the owner and the agent worked together as a team.

Another example involved the sale of a commercial property.

The property was placed on the market for sale by way of Expressions of Interest.  

This is a process whereby the property is advertised for sale inviting people to express an interest in buying it and at the end of the marketing period, say 4 to 5 weeks, the date for lodgement of Expressions of Interest closes.  Commercial-Property

The Seller would then consider all Expressions of Interest and ideally negotiate the terms of a Contract of Sale with the party that showed the best interest. 

A Contract of Sale would usually be entered into with them in say, a couple of weeks later.

In this case the owner of the property wanted to secure the agent as a Sole Agent only and market the property jointly with the agent i.e. they would conduct advertising through Investor Magazines and Professional Journals with the agent conducting advertising through the usual print media i.e. national and major state newspapers.

The owner proposed to the agent that they would be paid only if they sold the property or if some other agent sold it, but in the event that the owner sold the property themselves no commission would be payable. 

A true Sole Agency.

A very unenthusiastic agent called the owner to place this issue on the table as a major impediment to their involvement in the sale process (delicately put, I thought). 

The agent’s point was that the fact that the owner could sell the property themselves was a major disincentive to them. Couple meeting real

They could find themselves in a position at the end of the day where despite all their good efforts, the ultimate

Buyer noticed the property for sale in an investor magazine on the same weekend that they saw it advertised for sale say in the Financial Review. 

They then realised that the Vendor was attempting to sell the property themselves as well as the agent.

Human nature would lead them to approach the owner direct then, rather than the Agent, on the assumption this would achieve a purchase at a lesser sale price as no commission was payable.

How do you resolve such an impasse so that the agent and the owner work together as a team and the agent is not disincentiveised?

The solution was that the agent was appointed as an Exclusive Agent, but on the basis that if the owners sold the property themselves through their marketing and efforts (legally called “the effective cause of sale”) then the agent received 50% of the normal commission.

The agent therefore was highly motivated to sell the property themselves and secure their full commission, but didn’t feel cheated if the Seller ultimately sold it as they would receive a minimum of 50% of the commission. 

A sensible outcome.

Check the terms of your Sales Appointment

In New South Wales and Queensland the Real Estate Industry recognise the three methods of marketing discussed in this column and allow you as an investor to appoint your agent on the basis of any of the three.  

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Each State is different however as each State has its own laws and Real Estate Industry Body. 

They recommend to their members (real estate agents) Sales Appointments which don’t all offer the three styles of appointment.

You must therefore read the document given to you by the agent to formalise their appointment so you understand what your options are in engaging them.

In Tasmania for example, a Sole Agency and Exclusive Agency mean the same thing and your legal obligation (if you use standard industry documentation in that State) under the Sole and Exclusive Agency is that the agent gets paid if the property is sold by you, the agent you appointed or any other agent.

At the end of the day your obligation to pay the agent is dependent upon the terms of what you sign with them, so read it carefully.

Weekend reads – must read articles form the last week

There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month.

Each Saturday morning I like to share some of the ones I’ve read during the week.

The weekend will be over before you know it, so enjoy some weekend reading.

‘Another hindrance’ for already-weak market: Westpac stops SMSF home lending

As lending news continues to worsen, another bank drops a bombshell.

According to an article on Domain.com.au Westpac brings it’s SMSF home lending to a holt.

Westpac has sent another shiver through an already-anxious Australian property market by announcing it will no longer lend to self-managed super funds wanting to invest in residential property. 31111827 L

In a move designed to “streamline” its product offering, Australia’s second-biggest mortgage lender, confirmed on Friday it would stop selling its SMSF home loan products, along with its subsidiaries St George, Bank SA and Bank of Melbourne.

A spokesman said that, as far as the bank was aware, Westpac is the only major bank currently offering this type of lending and will stop writing new loans of this kind at the end of July.

The bank will continue servicing its existing loans. 30307218_l2

The move follows a widespread tightening of bank lending practices, which has included several waves of macro prudential regulation changes and an ongoing royal commission into the financial services industry.

The clampdown has seen lending to residential property investors slump to its lowest level in seven years, according to recent ABS data.

A Westpac spokesman said SMSF lending represented a “very small portion of our portfolio”.

“We continually review our products and services to ensure they meet the requirements of our customers,” he said.

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“In order to simplify and streamline our self-managed super fund products, we will be withdrawing from the sale of our SMSF home loan product and business lending to SMSFs,  effective Tuesday, July 31, 2018.”

Fresh blow to market

The news comes as another blow to floundering confidence in Australia’s key property markets, according to Market Economics managing director Stephen Koukoulas.

“At a time when we know demand [in residential property] is tapering off for a number of reasons, it’s just another proverbial straw that goes onto the back of an already-weak housing market,” Mr Koukoulas said of the latest news from Westpac.

Read the full article here

Sydney vacancy rate jumps

The numbers keep rising for Sydney’s vacancy rates.

This Blog by Pete Wargent shows the statistics.

Sydney vacancies rising Sydney Property

The latest building activity figures confirmed that the record number of apartments under construction in Sydney is now morphing into a surge in completions.

June is always a seasonally soft month for rental markets, but the latest release from SQM Research recorded a vacancy rate jumping all the way to 2.8 per cent for Sydney.

That’s well up from 2 per cent a year earlier.

Vacancies were very high in the Hills District at 4.9 per cent.

But the inner suburbs have by no means been immune as apartments complete across the city.

Vacancy Weekend

There’s a certain seasonal aspect to this.

Read the full article here

The RBA’s rationale for why it’s not rushing to lift rates

It’s no secret that interest rates have been on hold for a while now – with no sign of a rise.

This article from Business Insider gives an insider look into why the RBA isn’t in a rush to lift rates.

The Reserve Bank of Australia (RBA) thinks the next move in official interest rates is likely to be higher should progress in lowering unemployment and boosting inflationary pressures continue in the period ahead. Reserve Bank Of Australia

However, despite calls from some academics, including a former Board member, that interest rates should increase now, it still sees “no strong case for a near-term adjustment in monetary policy”.

While these views are hardly new, heard on-and-off over the course of this year, the RBA provided plenty of reasons in the minutes of its July monetary policy meeting as to why it has little desire to deliver a preemptive increase in the cash rate, pointing to rising risks from abroad, as well as ongoing constraints for Australia’s highly-indebted household sector, as a reason to sit tight for the foreseeable future.

“Some of the downside risks to the global growth outlook had increased over the prior month,” the RBA said.

“Members noted that trade tensions extended beyond the United States and China, and could escalate through non-tariff measures such as administrative delays. globe-economy-growth-health-world-heart-decline-map

“An escalation of trade tensions could harm global growth by undermining confidence and delaying investment decisions and could dampen international trade.”

So the tit-for-tat trade war between the United States and China, seeing both sides increasing import tariffs on the other with the promise for more, is on the RBA’s radar — an understandable reaction given China is Australia’s largest trading partner and therefore highly influential on Australia’s economic fortunes.

Domestically, the board also discussed at length the high level of household debt in Australia at its July meeting, a timely conversation given Australia’s household debt to income ratio had recently increased to a record 190%.

It offered not only the factors behind the increase in household indebtedness, but also why it poses a risk, reinforcing the point that now is not the time to test the waters with an  property mortgageunexpected lift in official borrowing costs, especially at a time when domestic wholesale funding costs are elevated and uncertainty over whether these trends will persist.

“Household debt has increased by more than household income over the preceding three decades in many countries, but particularly so in Australia,” the RBA said.

“Two key drivers of this trend across countries have been the decline in nominal interest rates, predominantly reflecting lower inflation, and financial deregulation, both of which have increased households’ access to finance.”

It added that the higher cost of housing also reflected that a larger share of the Australia’s population live in urban centres, along with a preference for large, unattached dwellings among prospective buyers. RBA

While the board noted that, based on survey data, that much of Australian household debt is owed by higher-income and middle-aged people “who tend to have more stable employment and often larger savings buffers”, it acknowledged that “a material share of household debt is held by lower-income households, which generally have higher debt relative to their income”.

That is, while most of Australia’s household debt is held by those the RBA deems can afford to service it, there’s still a significant proportion of the population who are vulnerable to higher borrowing costs.

Read the full article here

Why selling in winter works

It may be cold outside – but that doesn’t mean the market is experiencing a freeze.

In this article for Switzer, John McGrath explains why winter is actually a hot time to sell.

So, it’s the Winter season. winter property

Fewer people attend opens.

There are fewer homes for sale.

The gloomy weather allows less light into your property.

The rain makes your lawn soggy.

The house feels cold.

Doesn’t sound like the best time to sell but let me surprise you – Winter can actually be the perfect season to sell.

Let me explain why.

There are three key reasons. Propertyupdate Victorian Property Melbourne

First of all, genuine buyers don’t stop looking for a new home just because it’s raining on Saturday morning.

Fewer people will attend your open in Winter but you can bank on those buyers being genuine – not locals popping in for a look or future buyers researching the area.

Secondly, there are less homes for sale.

People are seeing fewer listings advertised and fewer signboards.

It makes the market look slow and boring, right?

Not true.

It’s actually great news for sellers. Australian Money In Wallet On Real Estate Background

Low supply of similar homes for sale will always work in your favour.

It means buyers don’t have as many options and therefore, more of them will notice your home.

They’ll have more opportunity to inspect it because there will be less homes sharing the same open time slot.

Buyers will be less rushed with fewer opens to attend, so they’ll have more time to wander around your place and imagine living there.

This is all good for you.

Lastly, Winter is an advantageous time to sell because it enables you to buy in the traditionally busy Spring period, when more homes are listed for sale.

Sell in Winter and you won’t be competing against all those new Spring listings, you’ll be competing for them. 37635699_s

With your sale done and dusted, you’ll have an exact budget to work with, too.

Some properties are particularly suited to a Winter sale.

For example, beautifully renovated period homes with open fireplaces can be cosy and inviting in Winter. Conversely, beachside properties with pools will always present best in Spring or Summer.

For Winter sellers, Adrian Bo, McGrath’s Performance Growth Coach, provides the following tips on how to maximise your home’s appeal in the cooler months.

Maximising your home’s Winter appeal

  • Make sure windows are clean and window-dressings are well presented to make the most of natural light Property-Investment-Checklist-300×199
  • Schedule your inspections for times of day when rooms capture the most winter sun possible
  • Use candles, lamps and soft furnishings like cushions and throw rugs to make darker areas cosy and appealing
  • Factor in time to properly heat your home before potential buyers arrive for inspections and the auction itself
  • Make sure your home is ready for any winter downpours – clear gutters and pathways so water can clear easily
  • On wet days, don’t be afraid to ask those who come to the inspection to take off their shoes at the door to protect floors from muddy footprints

Read the full article here

A sense of humour the best way to improve productivity in the workplace

They say laughter is the best medicine, but it would seem that it’s also a great business strategy.

According to an article on Executivestyle.com.au having a sense of humour at work, can actually improve productivity.

Are you an office clown or do you eschew levity in the lunchroom for fear your idea of a joke may see you carpeted by HR for offending a colleague who doesn’t share your sense of humour? Application Developers At Work.

If you answered yes to the latter, then perhaps it’s time to let your hair down a little – and not just because a laugh a day keeps the doctor away.

Laugh – and live – a little

Researchers from the University of Queensland Business School and Monash University say Aussie workers are up for more laughs in the workplace and that managers who encourage them will score a more motivated and productive workforce as a result.

Positive climate change

Charmine Hartel, Professor of HR management and organisational development at UQ Business School, believes bosses who want to reap the benefits should try to create a ‘humour friendly’ culture, rather than waiting for the chuckles to break out spontaneously. 42086534 L

“When [humour] is used constructively it’s building this positive emotional climate in the workplace,” Hartel says.

“It actually builds these high quality relationships, people feel more comfortable with each other, they feel like they belong, they feel that sense of inclusion.

Is it organic?

Best if the fun occurs naturally and not because it’s mandated by management, says Zendesk sales director Rod Moynihan, who believes his predominately millennial team is an exemplar for enjoying yourself while you work.

Fostering friendships Action 2277292 1920

It’s the same at our place, says Fluent Retail CEO Graham Jackson. No need for a ‘more fun’ policy – his team of 50 already has friendly joshing down to a fine art and it helps keep them happy to come to work.

“I think it gets very stale otherwise and people end up working from home without that kind of thing,” Jackson says.

Don’t overdo it

Encourage appropriate humour but don’t try to be Chief Fun Officer if you’re not a life of the party type, people management specialist Karen Gately advises.

“[Australians] have the most highly developed BS detectors in the world so if somebody is not being authentic, often we’ll call it try-hard; it has the opposite impact,” she says. Agreement 2679506 1920

“So if you’re not naturally a funny person, don’t try to be a funny person, it’s more about…if you do have funny people in the office, give them some room to have a joke.

Keep it respectful

And while the the rise of political correctness may have left some folk uncertain about what they can and can’t joke about, avoiding offence is simple enough, Gately adds.

“I can understand the nervousness but the way to stay out of trouble is to be respectful and kind,” she says.

Read the full article here

Weekend video: 12 ILLUSIONS THAT WILL TEST YOUR BRAIN