RBA decision bodes well for Australian property market
The Reserve Bank of Australia recent decision to hold an interest rate rise is a welcomed reprieve for the real estate industry.Glenn Stevens Governor of Monetary and Policy Decision said since information about the early impact of the previous increases is still limited. The Board judged it appropriate to hold a steady setting of monetary policy for the time being.Managing Director of Harcourts International, Mike Green, said to ensure the market is able to withstand further increases in the future, the RBA needed to make the decision they did.“It would have been premature to count our economy strong enough to endure four rate rises in less than six months.
This has already been reinforced by the weaker retail sales figures for December,” Mr Green said.Economists have said it would have increased the average repayment on a $300,000 mortgage by $50 per month.While this would have been the case, the real issue would have been adding this extra $50 to the cumulative rise over the last 12 months, equalling nearly $300 a month.“The real estate market is still only in the recovery stages from the downturn of the past eighteen months. Sales nationally in January were lower than expected. Although ahead of last year’s figures it was only a slight increase,” Mr Green said.“There has been a significant drop in first home buyers after the first home owner’s grant (FHOG) was cut right back last year.“But on the flipside, the low interest rates are encouraging investors back into the market, so we have seen investor numbers lift significantly in the last couple of months,” he said.“The Australian property market has been experiencing consistent growth over the past six months, and I believe we are going to see a steady year ahead in terms of investment,” he said.
Mortgage Brokers gaining popularity
Mortgage brokers are increasingly popular with first home buyers, according to the latest Bankwest/MFAA Home Finance Index.A recent poll was conducted with 850 people on various issues relating to the economy and the housing market. The index found 26.2 per cent of respondents use mortgage brokers for their first loan, and interestingly, this figure increased to 44.8 per cent among respondents below age 30.“This may be due to a variety of factors, such as less-established relationships with banks among young people,” Phil Naylor, CEO of the MFAA said. Satisfaction with mortgage brokers is now at 7.4 out of 10, with banks rating 7.1. When asked about the benefits of using a mortgage broker, respondents had a variety of reasons; the most popular answer was “they do all the leg work for you” (74.2 per cent), second “they are experts in a range of mortgages from numerous lenders” (69.2 per cent) and third, “they have a wider loan range” (68.8 per cent).
The survey also discovered there was a greater awareness among consumers of the benefit of using an accredited mortgage broker. Respondents indicated it is important to know a mortgage broker is a member of an industry body before using them to arrange a loan (85.8 per cent), continuing an upward trend from 72.3 per cent in April 2008.In comparison, the TNS Business Finance Monitor’s latest customer satisfaction report showed the level of customer satisfaction with the major banks has dropped significantly over the last year, with a decrease of 6.7 per cent in the 12 months to December 2009. St George suffered the worst plunge of the nine financial institutions surveyed, with its customer satisfaction levels dropping from 85.7 per cent to 70.8 per cent – a significant decrease at 15 per cent.If you need to find a registered broker, contact Harcourts Financial Services on 07 3839 3100 or visit the website, hfs.harcourts.com.au <http://hfs.harcourts.com.au> .
Understanding those inevitable permits and inspections
Everyone is familiar with the myriad of permits and inspections involved with buying or selling a property. From plans to on-site completion, there are many people and organisations involved in checking your home construction complies with local planning and building laws.Things don’t always go to plan, and sometimes the standard regulations are surpassed. If this happens, a planning permit will be issued. The plans will then need to be assessed by either a building official from the local council or some states and territories have private building certifiers that can fulfil the role.The building certifier will check things such as foundations, framing, light and ventilation, fire safety, safe access and materials. They also check the plans to ensure they comply with required set-backs.During construction, either a municipal or private building certifier will inspect the building to make sure your builder is complying with the relevant codes and regulations.The number of required inspections can vary from one state or territory to another, but generally include inspections of the foundations and footings, a frame inspection prior to the installing the roof and wall cladding. And last but not least, a final inspection to check the building complies with relevant regulations and is safe for you to move in!It’s important to remember the building certifier doesn’t have a role in checking the quality of the building work.
They are only responsible for checking it complies with the minimum or specified building regulations. If building plans set a higher standard than building regulations, the onus is on you to check in with the builder.When the home is finished you will be issued with a certificate saying the building is ready to go. This certificate may not cover all items under the contract documents however, so this is something you should check when doing the final ‘walk through’.Without doubt, the most ardent “inspector” is your builder. After all, a builder’s reputation is on the line with every new home. Professional builders pay close attention to every aspect of construction to make sure their homes not only meet code requirements but also offer the quality and value that you expect. Before you take possession of your new home, you and your builder should carefully inspect it together, from top to bottom.
SOURCE: Housing Industry Association (HIA