Market Update: Spring Property
Despite what you may have read values have remained relatively unaffected in 2011. However, market activity has demonstrated a notable decline in both regional and metropolitan areas with many buyers cautious of increasing personal debt levels. The result is a decline in the number of sales across Australia, in particular auction sales.

While an increasing number of auction properties are passing-in, many of these are still selling following tough post-auction negotiation. This result indicates that, although buyers are still willing to pay well for quality assets, they are adopting a more cautious and measured approach to buying.

During these times smart buyers can take advantage of the weaker competition and buy high quality investment-grade property. History shows that this opportune time is unlikely to last, as buyers gain confidence and return to the market causing prices to rise.

Spring will see many buyers returning to the market, particularly in light of recent decline in local and international share markets. Low levels of housing affordability are likely to see demand lean towards units in well-located areas with good transport and infrastructure.

Pdf for AFR

Why you should consider a buyer’s agent when buying and selling property

In a buoyant market, all property appears to be a sure pathway to wealthy creation. But look a little deeper and you quickly discover all is not as it seems.

Surprisingly, only around 10% of properties deliver consistent, reliable growth in every phase of the market’s cycle – very specific property types in very specific locations.

When times are good, property investment seems easy. But it is only a reliable, tax effective way to create wealth if it’s done correctly.

So what is the right property type? It’s an easy question to ask, but a complex question to answer.

Common Property Investment Mistakes

Article from WBP  May  2011

Melbourne’s residential property market experienced strong levels of price growth in the 12 months to September 2010. Key factors such as low interest rates, an under supply of new residential dwellings and strong population growth have remained positive influences on the local market. However, in recent months there are signs that the Melbourne market is beginning to slow with agents reporting lower levels of buyer enquiry, evidenced further by a notable fall in auction clearance rates to below 60 per cent.

Melbourne led the country with an 20.5 per cent increase in the city’s median house price over the year to September 2010, reaching a medium price of $565,000, according to the REIV. However, recent figures show that Melbourne’s unprecedented growth has subsided, increasingly only 0.9 per cent in the September quarter.  Similarly, Melbourne’s unit market perfumed well over the year, increasing 15.5 per cant and reaching a median of $470,000 in the 12 months to September. In the quarter prices remained stable with only minimal increase in the median unit price.  Unit Sales transactions during the financial year period were 31,424, which also increased strongly compared with the previous year, by an estimated 15 per cent. The Heal Estate Institute of Australia reported the maintenance of tight rental vacancy rates for Melbourne and modest rental growth over the year. Melbourne East Activity in Melbourne’s east appears to have settled following a softening of the local market in the previous quarter, which has lead to a leveling of demand and greater consistency in clearance rates.

However, the bottom to middle end of the local market is likely to remain stable due to continued strength of demand and sound economic conditions. The top end, however, is likely to continue to soften as markets correct following significant unsustainable growth in 2009 and the first quarter of this year. While not particularly sensitive to interest rate rises significant increases will ultimately affect affordability in Melbourne’s east. However, the lower and middle markets may still show some growth in 2011 despite further moderate rate rises.

Outlook Q4 2010
Outer-eastern suburbs like Croydon continue to perform as strong demand across the eastem region, forces many buyers further east. With a current median house price of $481,750 Croydon has grown more than 20 per cent since September last year. Conversely, middle ring suburb Doncaster It is expected that Melbourne‘s west will remain relatively stable Over the next year, although i’t’s likely to remain sensitive to further interest rate rises. Given market stability, western suburbs may benefit from buyers seeking affordability when compared with Melbourne’s East, and the gentrification of inner-western areas such as Footscray, has tendered an impeded performance, largely as a consequence of change to foreign investment regulations earlier in the year, which resuited in reduced demand and attendances at auctions, particularly from Asian buyers. According tc REIV figures, Doncaster’s median house price fell 2.3 per cent in the June quarter to $783,500. Units and apartment, however, have fared somewhat better. While there is still a high supply of new apartments entering the market in the Doncaster Hill area, off-the-plan prices remain high due to interest from foreign and non-permanent resident buyers, as well as due to added the depreciation benefits. Figures show that prices for established apartments have not increased at the same rate as those in new development, due to foreign investment incentives associated with new apartments.

Melbourne West
Reportedly the fastest growing region in now the fastest growing region in Australia according to recent research by KPMG, the western suburbs of Melbourne offer greater affordability compared with other Metropolitan areas and are proving an attractive prospect particularly for first home buyers. The strong population growth has positive implications for local infrastructure development as the needs of the rapidly rising local populace increase. Supported by strong employment opportunity and growing infrastructure, the gap between Melbourne’s east and west is starting to narrow.

While recent supply has increased there has been a subsequent ease in clearance rates as buyers become increasingly selective due to greater choice. Many auctions continue to pass-in favour of post-auction negotiation unlike the characteristic frenzied activity of April, May and June this year. Essendon, in Melbourne’s north-west was a standout performer during the quarter with an increase of 14.4 percent in the median house value  to $1.15 million and an equally strong increase for the unit market with 13 percent. Also performing above expectation was outer western suburb Melton. With a median house price significantly lower than the city’s median at $285,000 Melton is expected to undergo significant development in coming years. It is expected that Melbourne’s west will remain relatively stable over the next year, although it’s likely to remain sensitive to further interest rates rises. Given the market stability, western suburbs may benefit from buyers seeking affordability when compared with Melbourne’s East, and the gentrification of inner-western areas such as Footscray, Seddon, Yarraville, Sportswood and Footscray West.

Outer South-East Melbourne
Demand for property throughout the outer south-eastern corridor slowed in the September quarter, following a surge in market activity in the first half of 2010. With an increase in stock levels, buyers are being prudent and selective, with less desirable or poorly marketed properties demonstrating prolonged listing periods. Properties below $350,000 continue to sell well, however, demand for properties within the mid $500,000 price range has decreased as growing affordability issues take their toll in this interest rate sensitive market. In particular, a trend has emerged in affordable markets like Dandenong and Doveton, with high demand for properties that offer the potential to subdivide. The increase in demand follows changes by the Dandenong City Council to the size of units sites. Now reduced to 200 sqm in an effort to increase housing throughout the municipality, many average ex-housing commission dwellings located on 500 to 600 sqm sites are now suitable for subdivision. Prices for an average circa 1950 concrete dwelling have been pushed into the $300,000 bracket, while remaining a thriving market for start-up developers.

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In the present scenario, everyone uses calculator for doing calculations. For instance if a person has to simply add or multiply some figures, he will use a calculator for this work. It is because people are so dependent on this tool. There are various types of calculators which people are using in their daily life. Interest calculator is one of the modern tools which are provided by many financial sites. This calculator will help people to calculate the rate of interest which they have to pay or they will get through a specific investment. For instance if people want to take or apply for any type of loan such as car loan or home loan, they can use this calculator for finding out the rate of interest.

There are various types of calculators which help an individual to get the interest rate which one will get from his bank for the portfolio which an individual is maintaining. Mainly two types of calculators are well-known which are as follows:

• First type of interest calculator which is easily available online is a fixed deposit calculator. This is software which helps an individual to know all the amount of interest which he gets through his bank; not only from a single bank but people will be able to know the total amount of interest they will get from all the banks.   This fixed deposit calculator will help people to know whether they are getting good amount as their interest or they are throwing their money in getting a deal which is not good from a general prospective.

• Other type of interest calculator is a credit card calculator. If people want to manage their credit card stability through a recent processing system, it is the best tool to consider. This is uncomplicated software with so many functions. Through this handy instrument, a person can find the exact details of their credit account. Another advantage of this software is that people can track their billings and payments of their account. By using this tool, people will be able to learn regarding the balance amount. With this handy tool, people will be able to make necessary changes so that their repayment becomes more convenient.

Many people are victims of the economic depression that happened a few years ago. So it becomes important to calculate the amount of interest for such kind of people. Using an interest calculator will help people to know about their present economic conditions almost immediately.  Due to these reasons this calculator is used by many of people. If a person is unsure that how much interest he will earn in savings, this calculator will help a lot. By accessing this handy tool, people will know what the true rates of interest are. For a good financial future, people can make the best decision by comparing the rates. Why to worry if this interest calculator is easily available? It is sure that people will get protection from the crooked practices if they opt for it.

Our interest calculator helps you easily calculate mortgage interest rates in Australia. You can also find some good offers on home loan interest rates in Australia on Port Finance.

While they may be unsettled about their financial situation and debt levels, consumers are remarkably secure about the job situation.

Unemployment expectations improved markedly in Feb with the Index dropping 8.3% to 99.7. The decline means lower expectations for unemployment with a number under 100 meaning those expecting an outright decline in unemployment outnumbering those expecting it to rise. This is the first sub-100 read since March 1996. There is a significant upward bias on this though – the average reading since 1975 is 127.8. The average annual change in the unemployment rate over this period is zero.

Adjusting for this bias, the Dec reading is consistent with a large 1.5ppt fall in the unemployment rate over the year to Feb 2012. That’s a little excessive. We’ve seen that sort of annual decline in unemployment in Australia before, but not since the mid-90s when the starting point was a double-digit unemployment rate. With a starting point of about 5%, a 1.5ppt decline would take the rate below 3.5%. This would be not only difficult to achieve but deeply undesirable from the RBA’s point of view.

Consumers are clearly comfortable about the job situation but there appears to be some over-optimism about where things are heading.

Unemployment expectations vs actual

Job security and cyclical consumer spend

Debt Consolidation loans

The ‘cautious consumer’ was a key theme in 2010 and looks set to be an even bigger focus in 2011. It has become the topic dujour with the RBA in particular elevating the issue in its latest discussions of the policy outlook.

The renewed restraint apparent in consumer spending and borrowing over the second half of 2010 has come as something of a surprise. Prior to this, the RBA’s working assumption was that easing caution would see savings rates stabilise, and strong income growth start to flow through more to spending, with an upside risk that falling savings rates could result in an even stronger burst of spending.

The RBA’s Feb Statement on Monetary Policy notes that stabilising savings is still its central view but for the first time recognises the risk that a continued up-trend in saving associated with this more cautious attitude to finances could see spending growth remain subdued.

The restraint late last year came as less of a surprise to us. We had long noted the caution evident in consumers’ responses to questions on the ‘wisest place for savings’, summarised in the Westpac Consumer Risk Aversion Index
which has been a good guide to savings and other aspects of consumer caution (chart 26). March will see an update to this Index.

Consumer risk aversion index

Consumer risk aversion vs cash and deposit holdings

Interest calculator is very helpful in finding interest rates Australia.