Equitimax News

Big Switch sees small finish

noreply@blogger.com (Robert Ward) — Sun, 19 Feb 2012 23:52:00 +0000

Except from BrokerNews 20/02/2012
By Adam Smith

Consumer watchdog CHOICE has closed its controversial Big Bank Switch campaign with only one in 20 registrants potentially switching lenders.

The group said the campaign - a joint effort with One Big Switch - has now closed, after attracting 40,000 registrations. Of these 40,000, CHOICE said 2,000 "went on to have discussions" with lenders participating in the promotion. Those who switch lenders stand to save an average of $375 each, the group claimed.

Non-bank lenders including Firstmac, Resimac and Mortgage Ezy partnered with the campaign, which saw CHOICE receive a flat $250 per switch. The group, previously critical of mortgage broker commissions, said it would use the money received for its referrals to "help pay for the running of the campaign".

A CHOICE spokesperson said the group had not joined in any further campaigns with One Big Switch, and was "not involved in any current group switching around mortgages, energy or any other products". However, the spokesperson defended the value of the Big Bank Switch promotion.

"We believe that group switching has great potential to create savings for consumers in essential areas like banking products and energy," the spokesperson said.

Though only 2,000 of the initial 40,000 registrants switched lenders, CHOICE claimed that "many more" used the campaign as leverage to secure a better offer from their current lenders.

http://www.brokernews.com.au/news/newsletter/122397/

Broker market share set to grow: NAB

noreply@blogger.com (Robert Ward) — Sun, 19 Feb 2012 22:48:00 +0000

Monday, 20 February 2012

Simon Parker - theadvisor.com.au

The head of NAB’s third party mortgage business believes brokers will become more popular as an increasing number of time-poor customers grapple with a complex array of financial products.
In an interview with The Adviser, Antony Cahill, the executive general manager of growth partnerships – a NAB business unit which brings together a number of entities that provide products and services to the mortgage industry – said mortgage brokers now accounted for up to 48 per cent of NAB’s loan transactions, and this was likely to grow.
“I think it will continue to get larger, and I think there are a number of reasons for that as we see regulation coming through and continued professionalisation,” he said.
“People are becoming more aware that financial products can be quite complex – and they are seeking help, guidance and advice. Brokers are ideally placed to provide that.”
Since his commencement in the role 15 months ago, Mr Cahill’s Growth Partnerships portolio has posted growth of more than six times system.
He said the relationship between banks and mortgage brokers had matured in recent years, which will support ongoing growth of the broker channel.
“I think the industry has come a long way,” he said. “Ten years ago, in a sense there was a bit of a confrontational relationship.
“Ultimately, we’re all part of that end-to-end business, and we have valuable relationships with brokers to ensure we give great service to clients, and everyone has a role to play.”
“From our perspective in NAB, we want our customers to choose which channel they come through,” he added.

Link to article
http://www.theadviser.com.au/breaking-news/6733-broker-market-share-set-to-grow-nab

Standard Variable Rates - The Truth

noreply@blogger.com (Robert Ward) — Tue, 14 Feb 2012 03:29:00 +0000

We have recently seen banks lift and decrease their Standard Variable Rates and some banks now claim "We have the Cheapest Standard Variable Rate". Other lenders will say they are: "Always cheaper than the Major bank's Standard Variable Rate".

The Reality is that almost no-one pays the Standard Variable Rate.

(if you are paying the Standard Variable Rate - talk to us now)

If all you were looking at was the Standand Variable Rate then it would be easy to work out what is the cheapest rate. See below a table of Standard Variable Rates as at 14th Feb 2012

Lender	Standard Variable Rate
Homeside/NAB	7.34% pa
ANZ	7.36% pa
CBA	7.41% pa
Suncorp*	7.43% pa
Westpac	7.46% pa

What is the actual rate you will pay?
It all depends on what Discount are you getting?

What the lenders do not tell you is how much of a discount you can get of these rates. Some lenders also offer you a 0.50% discount and some will offer 1.0% or more.

How much of a discount can you get? Well that depends on a lot of things.
- How much you borrow
- How much equity you have
- Other loans you have
- Your Knowledge of the market (ie what is the Competituion Offering)
- The competency of your broker

Below is an example of the discounts offered for a $550,000 loan with a Lending Ratio of 70% (ie 30% equity position) as at 14th February 2012. As you can see the Standard Variable Rate is part of the story but it really does not matter. The actual Rate you pay is what counts (and this is before we even look at fees, charges, features and suitability of the loan). If you need advice - come and talk to us.

Lender	Standard Variable Rate	Discount Offered	Actual Rate
Homeside	7.34% pa	0.95%	6.39%
ANZ	7.36% pa	0.90%	6.46%
CBA	7.41% pa	0.80%	6.61%
Suncorp	7.43% pa	1.03%	6.30%
Westpac	7.46% pa	0.80%	6.66%

ANZ Media Release - 0.06% increase

noreply@blogger.com (Robert Ward) — Mon, 13 Feb 2012 00:35:00 +0000

Media Release
For Release: 10 February 2012

ANZ February 2012 Interest Rate Review
- variable rates for mortgages and small business increase by 0.06%pa;
three year fixed rate mortgage cut by 0.15% to 5.99%pa -

ANZ today announced it will increase interest rates for variable rate mortgages and small business lending by 0.06%pa while reducing the three year fixed rate package mortgage by 0.15%pa maintaining competitive interest rates for customers.

The decision follows ANZ’s monthly interest rate review which considered:
• the intense pressure on retail and business margins in recent months being sustained following:
- increased competition among banks for consumer and business deposits that has provided higher relative returns to ANZ’s 2.9 million deposit customers;
- higher costs paid by ANZ for $8 billion in long-term wholesale funding raised since October 2011 as a result of the economic and financial crisis in Europe which has made money more expensive for all banks to borrow.
• the stable monetary policy setting announced this week by the Reserve Bank of Australia following successive reductions in the cash rate in late 2011.
• the competitive environment, the impact of higher rates on customers and on loan growth, and also the need to act in a considered way with growing pockets of weakness in the Australian economy.

Effective 17 February 2012, ANZ’s new standard variable mortgage rate will be 7.36% pa
(7.46%pa comparison rate). New small business rates are effective from 17 February.

The 0.06% increase will add $6.50 per fortnight to the average home loan of $280,000. For small-to-medium sized business customers, the increase will add $3.00 per fortnight to an average loan of $130,000. Most customers will not need to make additional repayments with 85% of ANZ mortgage customers already ahead on their repayments.

ANZ will cut its three year fixed rate mortgage by 0.15% to 5.99%pa as part of its Breakfree banking package. ANZ’s Breakfree package currently provides the lowest fixed rates of the major banks across two, three, four and five year terms. ANZ CEO Australia Philip Chronican said: “This month we faced a serious dilemma in our review, balancing the rising cost of bank funding including deposit customers’ interests in receiving highly competitive rates, and the expectation of borrowers that we keep lending rates as low as possible.
“In December and January we absorbed the additional funding costs in the hope that funding pressures would ease and that no change in lending rates would be necessary. However, margins in retail and business banking have now been squeezed for a number of months and we’ve taken the difficult decision to pass on part of the higher costs to customers while we also get on with taking action to reshape the bank for tougher times.

“Our new monthly interest rate review process recognises that the Reserve Bank’s cash rate alone is not an accurate reflection of bank funding costs, particularly since the global financial crisis which has left all banks with the task of raising funds in volatile global markets and through stronger competition for deposits.
“This change comes with a duty to explain to our customers what drives our decisions and provide greater transparency about our funding costs.
“We also want to assure customers that we are committed to providing competitive products and we hope there will be an opportunity to lower rates in the coming months as greater confidence returns to global funding markets,” Mr Chronican said.
Mr Chronican added: “There has been much debate on banks in recent days. While we recognise our decision may leave some people frustrated and even angry, we believe Australia needs safe, well-run commercial banks that aren’t a burden on taxpayers and that can continue to lend. The alternative of weak, constrained banks that we see in the United States and in Europe is a recipe for stagnation and recession in Australia.”

ANZ has a number of options available to help customers concerned about interest rates manage their repayments. These include extending loan terms or switching to a fixed rate loan to provide greater certainty on future repayments, or to an ANZ Simplicity PLUS home loan, with fewer features at a lower interest rate. Customers who would like assistance should visit any ANZ branch, log on to anz.com or contact ANZ on 13 13 14.
Today’s monthly interest rate review follows an announcement by ANZ in December 2011 that it would review variable rates for retail mortgages and small business lending on the second Friday of each month.

• ANZ Criteria used to Assess Interest Rates
1. Ensuring attractive returns for depositors: ANZ is committed to providing customers with competitive returns and absolute security for their savings.
2. The cost of wholesale funding: This covers the interest we pay on funds from wholesale markets. The cost of these funds has become more volatile and expensive since the GFC and has been elevated in recent months as a result of the European debt crisis.
3. Our competitive position: ANZ is determined to remain competitive by attracting customers, winning business and managing our costs.
4. Our customers’ ability to afford loan repayments: We are committed to pricing loans and lending in a responsible way and giving consideration to the financial health of our customers, the economy and the banking system in Australia.
5. Regulatory requirements: As a bank, ANZ works within a strong prudential and regulatory environment. For example, we must hold capital reserves and levels of liquidity to operate safely and securely for customers.

Diploma of Financial Services

noreply@blogger.com (Robert Ward) — Mon, 13 Feb 2012 00:20:00 +0000

Robert Ward has result completed his Diploma of Financial Services (Finance/Mortgage
Broking Management) FS 50504

Robert's Diploma

RBA - Feb 2012 Rates on Hold

noreply@blogger.com (Robert Ward) — Tue, 07 Feb 2012 23:08:00 +0000

Interest Rate Bulletin

Website | Email | Forward to a Friend | Print | Unsubscribe

John McLennan & Robert Ward

Directors

Equitimax Pty Ltd
PO Box 929
Chatswood NSW 2057
Tel: 02 9411 5322
Mob: 0401 956 667
Fax: 02 9411 5200

Interest Rate Bulletin Febuary 2012

RBA Leaves Rate Unchanged

At its meeting today, the Board decided to leave the cash rate unchanged at 4.25 per cent.
Statement by Glenn Stevens, Governor Monetary Policy RBA.
Information becoming available since the December meeting confirms that economic conditions in Europe were weakening late last year, with risks still skewed to the downside. Reflecting this, most forecasters have lowered their forecasts for world GDP growth this year to a below trend pace. That said, recent data from the United States suggest a continuing moderate expansion after a soft patch in mid 2011.
Read More >>

Disclaimer: This newsletter is intended to provide general news and information only. Readers should rely on their own enquiries before making any decisions regarding their own interests. Please do not rely on any part of this newsletter as a substitute for specific legal or financial advice. All material is copyright 2012. You can unsubscribe by clicking the "Unsubscribe" link at the top of this newsletter.

2012 - The year ahead

noreply@blogger.com (Robert Ward) — Wed, 01 Feb 2012 05:42:00 +0000

Welcome to 2012! I hope you had a chance to have a break and spend time with family and friends. Time Brown CEO of our Aggreagtor group has enlighted us with some thoughts for 2012.

"As you know, it's been an interesting start to 2012 with America showing positive signs of recovery and China continuing to grow (albeit slightly slower than in prior years), but still ahead of analysis's predictions. Europe continues to struggle with its sovereign debt burden and there is really no magic solution. This will be a long term issue and will continue to act like an anchor for rest of the world's growth.

So what does all of this mean for Australia and more importantly for you as a business owner?
Firstly, rates will probably come down further but the banks will absorb most of the decreases with the increase cost of funds. Unemployment will more than likely rise in the short term as Banks, Manufacturers and Retailers come to a conclusion that their revenue will not meet budget for at least the coming year and in response will shed up to 10% of their work force. On the positive side both Queensland and WA still have strong growth in mining and will look to absorb a lot of the job losses. On the housing front there is still a shortage of housing supply with an estimate that there will need to be another 100,000 homes built to meet current demand, hardly an indicator of a housing bubble. Do not expect a lot from the Federal Government as they continue to show very little leadership in the current climate, especially now they have lost the support of a couple of key independents. Consumer confidence is the key and there are a number of survey's over the next few weeks t hat will give us an indication of how the general population feels about the year ahead. This could give us our strongest lead to what people's attitudes to buying property in the coming year will be. Certainly early indicators are that Sydney and Melbourne are shown signs of growth in the property market."

Tim Brown - CEO Vow Financial Pty Limited

Equitimax Newsletter - Jan 2012

noreply@blogger.com (Robert Ward) — Mon, 16 Jan 2012 18:03:00 +0000

Having trouble? Click here to view in your browser.

Dear Robert,

January 2012

We head into the New Year with some uncertainty about what lies ahead, with the risk of another recession building in the United States and European Union.
Amid this uncertainty comes the good news of interest rate cuts. When the Reserve Bank gave us the early Christmas present of a 25 basis point rate cut, it marked the first back-to-back monthly cut since April 2009. The December reduction alone will save the average mortgage holder - with a $300,000, 25-year mortgage - about $47 a month. With more interest rate cuts predicted in the coming months, this will surely help us start the New Year with a smile.
In this issue of the newsletter we look at the topics of home valuation, renovating to sell and the pros and cons of selling your home by private treaty or auction.
Enjoy this newsletter and feel free to pass it on to family and friends.

Kind Regards,

John McLennan & Robert Ward
Directors - Equitimax Pty Ltd

Equitimax Pty Ltd
PO Box 929
Chatswood NSW 2057

Tel: 02 9411 5322
Mob: 0401 956 667
Fax: 02 9411 5200


	1. The Year Ahead


	2. Put a Price on Your Home


	3. Renovate to Sell


	4. Private Sale or Auction

The Year Ahead

With so many mixed messages going around about the state of the economy, we thought it was time to look at what the statistics tell us. Here's a round-up of the latest research on the Australian property market (sourced from SQM Research and Genworth's Home Grown Mortgage Industry Perspectives report)

Put a Price on Your Home

How do you go about finding out the true value of your home? You might not want to go to the expense of hiring a qualified property valuer, but you are worried about the accuracy of relying on market appraisals from real estate agents or online property price reports.

Renovate to Sell

Renovation is one of the ways you can differentiate your home to attract buyers in a slow market, but you need to do your homework to ensure that renovating before you sell is worth the time, effort and money. Renovation, whether major or minor, is no guarantee that you'll be able to ask more money for your home.

Private Sale or Auction

Selling your home via auction or private treaty is never an easy decision to make. Your real estate agent may have a strong opinion about which is the better option so be sure to quiz them about the reasons for their preference. It might also help to look at auction clearance rates in your area as market conditions can influence the success of either sales method.

Disclaimer: This newsletter is intended to provide general news and information only. Readers should rely on their own enquiries before making any decisions regarding their own interests. Please do not rely on any part of this newsletter as a substitute for specific legal or financial advice. All material is copyright 2012.

Click here if you would like to unsubscribe from future newsletters.

RP Data - What impact will the RBA cust have on housing?

noreply@blogger.com (Robert Ward) — Fri, 09 Dec 2011 04:49:00 +0000

What impact will this month’s interest rate cut have on the housing market? At its December Board Meeting the Reserve Bank (RBA) decided to cut official interest rates by 25 basis points for the second month in succession. This week we take a look at the likely impact on the housing market.
The Reserve Bank decided to cut official interest rates this week by 25 basis points taking the cash rate to 4.25%. This was the second successive month in which interest rates had been reduced. This is the first time since February and March 2010 that we have seen successive interest rate changes, and the first time since January and February 2009 there has been successive rate cuts.
As at the end of November, the average standard variable mortgage rate was 7.55% and the average 3 year fixed rate was 6.4%. It remains to be seen whether the whole 25 basis point cut will be passed on. If it is, standard variable mortgage rates will revert to decade average levels. If 3 year fixed rates remain unchanged they will be 66 basis points below the decade average.

From a housing market perspective, the big question will be: Will the successive rate cuts help to stimulate activity in the housing market?
Undoubtedly interest rate cuts improve housing affordability. In stating this, capital city property values have fallen by -4.0% over the 12 months to October 2011 and rental rates have risen by 4.6% which also improves affordability.
As the second graph shows, in the past changes to standard variable mortgage rates have generally encouraged greater property value growth. On the other hand, interest rate increases have tended to result in lower levels of value growth.

The third graph highlights the relationship between standard variable mortgage rates and consumer sentiment. Much like property value growth, higher interest rates have often resulted in lower levels of consumer confidence and vice versa.

Although history can be a guide to the future, we feel that conditions are somewhat different this time round. Property values are higher than they have ever been before and although interest rate cuts and value falls help boost affordability, it remains much more affordable to rent than it is to purchase.
A raft of other economic indicators also suggest that market conditions may be somewhat different than they have been in the past. Retail trade has grown by just 3.4% over the 12 months to October 2011 which is well below the decade average growth of 5.4% annually. GDP Data released for the September 2011 quarter this week shows that the Australian economy expanded by 2.5% over the year compared to an average expansion of 3.0% annually over the past decade. The data also showed that households continue to save around 10% of their income which is at levels not seen since the since the mid 1980’s. The total value of housingfinance commitments have grown by just 4.1% over the 12 months to September and have fallen by -1.3% when refinances are removed. These figures are well below the respective decade averages of 9.4% and 8.9%.
Considering that European Governments are currently experiencing a debt crisis, not to mention the ongoing weakness of the US economy, things are certainly not looking as strong as they have over much of the past 10 years. Given these conditions, it would seem unlikely that even if the Australian economy continues to perform comparatively strongly that credit for housing will be as freely available as it has been in the past.
So the initial question was what impact will the interest rate cut have on the housing market?
If the interest rates cut is passed on it will provide a much needed hand to those home owners under mortgage stress. It would also potentially encourage some more sales transaction activity however, this is unlikely to filter through until after January next year as December and January are typically the quietest months for housing market activity. An interest rate cut would also likely provide some support to consumer confidence levels.
On the other hand, given the overall economic conditions we don’t believe that two 25 basis point cuts to interest rates will provide enough stimulus to result in any significant turnaround in property value growth. We suspect that consumers will remain cautious and continue to pay down their debt, housing finance is unlikely to be flowing as freely as it has in the past and consumers will be aware that the RBA won’t be afraid to lift interest rates rapidly again should the economic outlook improve.
Given this, if the cut is passed on it would likely provide welcome relief to home owners and may encourage some increase in sales activity next year however, it is unlikely to provide a stimulant for property values to once again start increasing given the broader economic conditions.

WESTPAC - Predicting the RBA to cut rates by 25bps on Dec 6

noreply@blogger.com (Robert Ward) — Mon, 05 Dec 2011 00:18:00 +0000

The Reserve Bank Board meets next week on December 6. Westpac has consistently argued that the current easing cycle which began on November 1 with a 25 bp rate cut will total around 100 bp's in rate cuts over its course.

On November 15 the Reserve Bank released the minutes of the November 1 meeting. Our analysis at the time was that there was considerable concern with respect to economic and financial developments in Europe and the potential impacts on the rest of the world, particularly Asia. The RBA’s opinion on the domestic economy had cooled significantly from earlier in the year and this was highlighted in significant reductions in their forecasts for economic growth and inflation over the forecast period which were released in the Statement on Monetary Policy on November 5.Westpac's own growth forecasts are lower for 2011 but broadly in line with the RBA's forecast for 2012 and 2013.At the time, we concluded that the Minutes indicated that there was scope for further rate cuts particularly with the Bank forecasting that underlying inflation would remain comfortably within the 2–3% band for both 2012 and 2013. However we concluded that there was insufficient evidence to change our call that the next rate cut would be in February.

We emphasised that the decision on whether to bring the rate cut forward to December would depend on developments overseas, particularly in Europe and Asia.

Previous rate cut cycles have always featured an immediate follow up move but these have all begun from a much higher level with rates starting clearly in the contractionary zone. The Bank has assessed that the current setting of rates is around neutral so the decision to cut immediately after the first move is tougher.

To read the rest of the article go to:

http://www.westpac.com.au/docs/pdf/aw/economics-research/Offshore_Weekly.pdf

SMH Article on Fixed Rates 16/11/2011

noreply@blogger.com (Robert Ward) — Fri, 18 Nov 2011 05:03:00 +0000

FIXED RATES - Don't wind up in a bind

Article writtne by Lesley Parker - Sydney Morning Herald November 16, 2011

Borrowers should be cautious about taking a fixed-rate home loan now.

The rush of borrowers towards fixed-rate loans at a time when official interest rates have started to fall has Australia's credit ombudsman worried.
With one interest rate cut in the bag, Ombudsman Raj Venga has urged borrowers to carefully consider the implications of locking in a home loan rate - in particular, the possible ''break cost'' if they discharge the loan early to refinance or sell.
Housing finance data released last week showed that fixed-rate loans jumped from 5.6 per cent of all loans in August to 7.9 per cent in September as unusually cheap fixed rates enticed borrowers.

But Venga, who handles complaints about non-bank lenders, says although fixed rates are often seen as a way of reducing the risk of rising interest rates, ''borrowers should be aware that they may incur substantial break costs in a falling interest rate environment.''
In the past, fixed-rate loans have resulted in a spike in complaints when variable rates later drop significantly and people try to refinance.
While exit fees have been banned on variable-rate loans, lenders can still charge break costs on a fixed-rate loan to recover the amount they'll lose if the borrower leaves early.
If rates are falling and the financier has to re-lend the money at a lower rate, they're entitled to recompense. The more rates fall, the higher the break cost.
''Break costs can and do sometimes run into tens of thousands of dollars,'' Venga says.
They might be payable if the loan is refinanced or discharged within the fixed-rate period, possibly because the property is being sold; if additional funds are sought, which would require the existing loan to be discharged; and if a lump-sum repayment is made during the fixed-rate period (though some lenders allow you to prepay up to $10,000).
Before signing a contract, borrowers should seek advice on how any break costs would be calculated, Venga says.
If you're already on a fixed-rate loan and are thinking about refinancing, ask first for an indicative payout figure, making sure this includes any break cost. Remember that this payout figure might change if you don't act straight away.
Those who fixed in August and September won't have cause for regret yet. The typical fixed rate was 6.6 per cent to 7 per cent then and even after the recent rate cut the average big-four variable rate is 7.55 per cent - though some people qualify for discounts of 0.5 to one percentage points.
However, those who locked in about 8 per cent in November 2007 - when fixed-rate loans hit a record 24 per cent of all borrowing - know how costly it can be if you need to break a loan early when rates are falling.
A year after they fixed, the global financial crisis hit and rates plummeted, sending break costs soaring.
Key points
❏ Fixed-rate loans should be used for certainty not as a ''bet'' on interest rates.
❏ Break costs can be hefty if you exit early when rates are falling.
❏ Selling or refinancing may incur a break cost.
❏ Extra repayments or loan top-ups can also trigger break costs.

Broking Body warns against 'laughable' One Big Switch

noreply@blogger.com (Robert Ward) — Fri, 30 Sep 2011 06:44:00 +0000

Here is a good article from Broker News.
Choice and One Big Switch have offered great deals based on Collective Bargaining.
Equitimax does not think this will be any better than what we can currently do and Australian Finance Group (AFG) general manager of sales and operations Mark Hewitt agrees.

AFG warns against 'laughable' One Big Switch
_{By Ben Abbott | 30/09/2011 8:00:00 AM}

Mortgage industry aggregator Australian Finance Group (AFG) has come out in support of the broker proposition, by issuing a warning to consumers over the loan offer being provided by One Big Switch.

Following widespread criticism from the broking industry over the group buying exercise masterminded by consumer group Choice, AFG's general manager of sales and operations Mark Hewitt said the problem is One Big Switch had failed to attract major lenders to its panel.
"The proposition would be laughable if they weren’t putting people’s property on the line," Hewitt said.

Hewitt also questioned 'sweeping pronouncements' being made by representatives of the organisation - as reported in the Australian Financial Review - about financial advice in Australia being 'crap', when they are not prepared to provide financial advice themselves.
"The disclaimers on the emails that they’re sending out makes it clear that their so-called ‘members’ are on their own when it comes to deciding whether or not a mortgage deal is right for them," Hewitt said.

"Providing the best deals in the market is what aggregators and brokers do every day"

Hewitt said in the media announcement. "In the past twelve months AFG has refinanced $9.3bn of mortgages – and we are only one of several major broker groups," he said.

Earlier this week, non-banks Resimac, Firstmac, Mortgage Ezy and Mortgage Port were revealed to be the first lenders cooperating with One Big Switch on its consumer buying campaign.

Westpac - Next move from the RBA will be down

noreply@blogger.com (Robert Ward) — Thu, 22 Sep 2011 01:19:00 +0000

Except from Westpac Consumer Sentiment Survey

The September Westpac–Melbourne Institute Consumer Sentiment Survey was a mixed bag. Headline sentiment posted a solid rise, mainly driven, we suspect, by a more relaxed outlook for interest rates. Responses to the various ‘time to buy’ questions were also perkier, particularly for housing.

However sentiment remains in firmly pessimistic territory overall and aversion to risk is still intense.

Meanwhile a sharp deterioration in unemployment expectations lends more weight to the view that consumer demand is entering a cyclical weakening. Indeed, the worsening picture on job security effectively negates the good news from improved sentiment.

Not only does it suggest actual labour market conditions are deteriorating, it also points to a material downturn in discretionary spending and is an additional negative for already soft housing markets where job loss concerns inhibit demand.

For now we have made only minor changes to our consumer forecasts, mainly to incorporate stronger than expected Jun quarter spending estimates from the national accounts and partial data for Jul. These give a firmer near term picture for consumer demand but the broad forecast of a material weakening in remains intact.

Looking ahead, steady rates and a reduced threat of rate rises should continue to allay consumer fears of rate hikes. But with rising uncertainty around the global economy and growing signs of weakness in local labour markets, we suspect that steady rates on their own will not be enough to restore consumer confidence.

We continue to expect that the next move from the RBA will be rate cuts starting with 25bps in Dec and culminating in a total reduction of 100bps by Sep 2012.

Australian consumers are likely to remain badly out of sorts at least until an easing bias is apparent and most probably until actual rate moves are enacted.

Westpac Institutional Bank is a division of Westpac Banking Corporation ABN 33 007 457 141. Information current as at date above. This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. Westpac’s financial services guide can be obtained by calling 132 032, visiting www.westpac.com.au or visiting any Westpac Branch. The information may contain material provided directly by third parties, and while such material is published with permission, Westpac accepts no responsibility for the accuracy or completeness of any such material. Except where contrary to law, Westpac intends by this notice to exclude liability for the information. The information is subject to change without notice and Westpac is under no obligation to update the information or correct any inaccuracy which may become apparent at a later date. Westpac Banking Corporation is regulated for the conduct of investment business in the United Kingdom by the Financial Services Authority. If you wish to be removed from our e-mail, fax or mailing list please send an e-mail to economics@westpac.com.au or fax us on +61 2 8254 6934 or write to Westpac Economics at Level 2, 275 Kent Street, Sydney NSW 2000. Please state your full name, telephone/fax number and company details on all correspondence. © 2011 Westpac Banking Corporation

A great Article from Realestate.com.au

noreply@blogger.com (Robert Ward) — Tue, 06 Sep 2011 02:48:00 +0000

Here is a good article we found for investors on RealEstate.com.auhttp://discover.realestate.com.au/news/dont-forget-tax-time-is-big-for-investors

Don't forget: tax time is big for investors

Some property investors may have already submitted their tax return for last financial year but many are yet to do this.

When you are getting your paper work ready, don’t forget to claim all your deductions. If after reading this article you discover that you have omitted certain expenses, you can amend your tax return.
Below is a list of common expenses that you can claim. I have added my comments to highlight a number of important points:

Advertising – Include costs for all print and internet ads. Even if you have a property manager looking after your property, check your statements as they have may have charged you for brochures or other marketing material.

Bank Charges – Check all your statements. Don’t forget your monthly and annual fees.

Body Corporate Fees – These can be quite high if you own a unit in a high rise complex which includes lifts, swimming pool and spa. These fees are generally paid every three months.

Borrowing Expenses – These were incurred at the time of purchase and can be claimed over a period of 5 years.

Capital Works – Don’t forget to include depreciation of the building. If you don’t have a depreciation schedule for your property, make some enquiries. The claimable deductions can greatly increase your cash flow, especially if you have a relatively new property.

Council Rates – Don’t forget to include all payments made, especially if you have arranged a payment plan with the local Council.

Depreciation of Assets – You should have a depreciation schedule for this. Even an older property can have significant depreciation benefits due to recently installed fixtures and fittings.

Gardening – If you pay for all the gardening/lawn mowing, ensure that you claim for all the costs. If the tenant pays for this, you cannot make a claim.

Insurance – You may have a number of insurance policies on the one property e.g. building, contents, landlords’ insurance. Claim for all premiums paid.

Loan Interest – For most investors, this will be the biggest expense. If you have a principal and interest loan, you can only claim the interest component. If you are not sure what this is, ask your bank to provide you with the details.

Land Tax – This is one of the biggest hurdles to owning multiple properties. Whilst you are visiting your accountant, ask them about ways that you can minimize your land tax.

Legal Expenses – In over 20 years as a property investor, we have not had to pay one cent in legal fees for residential property. The Residential Tenancies services around the country are either free or available at a very low cost. However, holding commercial property can be a very costly exercise if you have a legal dispute.

Pest Control – In some states, pest inspections and control measures are vital to the health of your building and future wealth. If you are not sure about the pest situation at your property, get an inspection done.

Phone – You can include a portion of your phone expenses if you have used your phone as part of your property investment business. Check your mobile and landline bills.

Property Management Fees – This is usually around 10% of your gross income when you include ongoing fees, monthly account keeping fees, administration fees, inspection fees, bill paying fees, etc.

Repairs and Maintenance – Ensure that your claim is for a repair or maintenance and not a capital improvement. If you’re not sure about the difference, ask your accountant.

Stationery – This includes stamps, envelopes, paper, books, etc. This is not usually a large expense as most communication with the tenant is done by phone or email.

Travel – You may be able to claim a large amount in travel expenses, especially if you manage the property yourself and you live a long way from your investment property. There are a number of ways to claim this expense; ask your accountant which is the best way for you.

Water Charges – You can only claim for the portion of the water bill that you have paid for. If you have an arrangement whereby your tenant pays for some of the bill, their portion is not claimable by you.

If you have an investment property and don’t have an accountant, find one but make sure they know about property.

Written by Peter Koulizos. A lecturer and author of The Property Professor’s Top Australian Suburbs (John Wiley & Sons). For more information, go to www.thepropertyprofessor.com.au.

Interest Rates Continue to Fall - Time to Review your loan and save

noreply@blogger.com (Robert Ward) — Tue, 30 Aug 2011 02:36:00 +0000

Two Minutes could save you $’000s*

Let Equitimax review your Loan

The Current Banking Environment

·         International Economies are under the Spotlight
·         Ratings Agency - Downgrades
·         Australian Banks recording record profits
·         Slowing Australian Retail Market
·         Tightening of Lending Credit Policies
·         Talk of an Interest Cut by the RBA (previously it was tipped to be an Increase)
·         Cost of Funding reduced
·         Decline First Home Owners and New Loans Applications
·         Lenders offering cheaper pricing for loans with higher equity ratios
·         Increased Competition for Quality Loans

MORE COMPETITION = BETTER INTEREST RATES
·         Fixed Rates are dropping
·         Standard Variable Rate has remained unchanged
·         Bigger discounts are available for new money applications

IF YOU DO NOTHING . . . . . .

YOUR RATE WILL NOT CHANGE !

· Why are you not getting the best rate?
· Ask us how you can.

REVIEW YOUR LOAN and SAVE THOUSANDS*

The review should take you less than 10 mins – All we need is some information about your current loan such as

1. Your Current Loan Balance

2. Your Current Interest Rate

*savings depend on your specific loan. For example if Equitimax could save someone with a $500,000 loan just 0.10% that would save them $2,000 in just 4 years.

Equitimax FAQ’s

Q. I want a cheaper rate, what are my options?

A. (a) Refinance your loan to a cheaper lender – Equitimax can help.

(b) Apply for a loan increase – your lender may give you better pricing – Equitimax can help.

(d) Consolidate loans – your lender may give you better pricing – Equitimax can help

Q. What Interest Rate should I be getting?

A. This depends on your specific loan. There is no correct answer. Your loan rate depends on your current lender, the amount of your loan, the equity you have in your loan, you loan history & what sort of home loan you have.

Most Variable Rates are around 7.0% at the moment. So if you are paying a rate higher than 7.0% you should definitely give us a call.

Q. Is it a good time to fix?

A. Fixed rates are changing almost daily – sometimes it is best to wait until the dust settles.
The good news is that they are going down and we believe there will be more lenders dropping their fixed rates soon.

Q. But Fixed Rates are currently cheaper than Variable Rates?

A. Fixed rates vary from lender to lender, however it is possible to fix in between 6.39%% and 6.79% for 2-3 years. In most cases this will be a reduction from what clients are currently paying and therefore this is a real saving.

Q. What Fixed Rates are available at the moment?

A. Below is the table of rates as at 23/08/2011

Lender	1yr Fixed	2yr Fixed	3yr Fixed	4yr Fixed	5yr Fixed	Standard	Basic
AMP Banking	6.69%	6.69%	6.69%		6.99%	7.79%	7.02%
ANZ Bank	6.59%	6.44%	6.44%	6.89%	6.99%	7.80%	7.10%
Bankwest	6.99%	6.89%	6.99%	7.54%	7.59%	7.70%	7.10%
Citibank	6.79%	6.34%	6.34%	6.45%	6.74%	8.02%	6.95%
CBA	6.59%	6.59%	6.59%	6.99%	6.99%	7.81%	6.99%
Heritage	6.85%	6.95%	7.05%		7.49%	7.44%	7.03%
Homeside Lending	6.59%	6.59%	6.59%	7.39%	6.94%	7.70%
ING Direct	6.39%	6.39%	6.39%	6.89%	6.99%	7.34%	6.96%
Macquarie	6.50%	6.55%	6.69%	6.99%	6.99%	7.80%	6.99%
NAB	6.94%	7.09%	7.09%	7.49%	7.54%	7.67%
St George Bank	6.79%	6.59%	6.59%	6.99%	7.04%	7.80%	7.08%
Suncorp	6.59%	6.40%	6.45%		7.15%	7.83%	7.25%
Westpac Bank	6.99%	6.99%	6.79%	7.54%	7.64%	7.86%	7.16%

*these rates are a guide only to demonstrate the difference between lenders and were correct as at 23/08/2011
Professional Package Discount are based on the Standard Rate. For Lender Specific Comparison Rates please contact Equitimax.

Q. What do I need to do?

A. SIMPLE – Get Equitimax to help.

1.       Just ask us to review your loan.
With some Banks we can find out your interest rate & loan balance, however not all banks pass on this information to us.

2.       Send Equitimax an email              CLICK HERE TO EMAIL US
(a)    The Loan Balance $
(b)   Your Current Interest Rate                %
(c)    Your Lender
(d)   Any other details you think are relevant

Vow brokers embrace insurance products

noreply@blogger.com (Robert Ward) — Tue, 12 Jul 2011 02:44:00 +0000

Over 220 of Vow Financial's brokers have expressed interest in selling general insurance via its new alliance partner, Allianz Australia, since a deal was signed between the two groups four weeks ago.
Under the terms of the agreement signed in May, Allianz Australia, a subsidiary of the global general insurance provider, will offer all housing-related insurance products to the clients of Vow's brokers.
Vow CEO Tim Brown said that in a difficult economic climate for brokers at present, Vow Financial management thought it important to establish alternative sources of income for their broking network.
“Already a healthy percentage of our brokers are using Allianz, and we expect more to join up as they come to appreciate Allianz’s competitive offering in this market,” Brown said.
Michael Osborne, head of sales and distribution at Vow Financial, said in the aggregator's latest broker update that its broking network "appear to have shifted on mass from thinking about diversification to actual implementation of new products & services".
He said this has been evidenced from "dozens" of brokers utilising the Vow Leasing service, expressions of interest in partnering with Vow Wealth Management - Vow's financial planning arm - and over $10m of investment properties exchanging thorugh Blue Wealth Property.
Commenting on the deal, Allianz managing director Terry Towell said that insurance is an important consideration for clients who are taking out a home loan.
"It is in both the broker’s and borrower’s best interest to put in place an appropriate insurance solution and ensure protection is in place," he said.

If you need an Insurance quote let John or Robert know

Interest rate rises loom but home prices 'won't crash'

noreply@blogger.com (Robert Ward) — Thu, 30 Jun 2011 07:26:00 +0000

A timely article from Thomas Hunter - The Age
http://news.domain.com.au/domain/real-estate-news/interest-rate-rises-loom-but-home-prices-wont-crash-20110627-1gmw0.html

Interest rate rises loom but home prices 'won't crash'June 27, 2011

Property prices won't experience huge losses over the next three years but interest rates will rise to almost 9.5 per cent by 2014 to force buyers back onto the sidelines, a new study says.

The report by BIS Shrapnel, released today, dismisses forecasts of sharp falls in prices over the short to medium term and predicts prices to remain steady through the rest of 2011 "with some cities even showing moderate price growth over the two following years".
Report author Angie Zigomanis said the drop in home prices to June this year had been caused by the government's withdrawal of stimulus spending, rising interest rates and a 50 per cent pull-back in the number of first-home buyers entering the market.
But he said buyers would return as investment from the mining boom started revving up the economy through 2012.
"The only question mark for us is interest rates. Our forecast is for a half a per cent rise later this year, and another half a per cent rise in the first-half of next year," said Mr Zigomanis.
"In an environment that is strengthening, we can probably handle that at current price levels. People have factored those rate rises in, so as the economy picks up people will wade back into the market knowing that there is a couple of interest rate rises on the horizon."
He said the forecasts were based on unemployment falling below 4 per cent in "a strong economic environment" where rising wages and inflation would see the RBA hike rates.
"Housing rates are consequently forecast to peak at 9.4 per cent by the end of 2013. While the momentum in purchaser activity is expected to continue into 2012-13, rates at this level will eventually bring about a downturn in both the residential market and the economy over 2014."
City by city
Mr Zigomanis forecast Sydney's median house price to be $640,000 in June 2011, or a 1 per cent rise on a year earlier. The report noted that house prices would "remain 9 per cent below the peak of March 2004" but home loan affordability was "at its best level since 2002".
Melbourne's forecast median house price would hit $575,000, a 3 per cent rise on a year earlier, but Mr Zigomanis noted there was "little upward pressure on prices" as the construction of new dwellings was beginning to exceed demand.
In Brisbane, the median house price would slide 4 per cent over the year to $440,000. The report noted that "underlying demand in the Queensland market has been weakened by lower overseas and interstate migration inflows that have fallen to long term lows". The Gold Coast and Sunshine Coast regions were expected to have moved in tandem with Brisbane.
Adelaide's median house price to June 2011 was predicted to remain static at $410,000, while Perth home prices would settle at $480,000, down 4 per cent for the year and 10 per cent since the March quarter peak of 2007.
The median price of a home in Hobart was steady at $365,000 over the year to June and Canberra's median house price was estimated to have fallen 2 per cent to $512,000.
thomas.hunter@theage.com.au

Senate Rules on Exit Ban Fee

noreply@blogger.com (Robert Ward) — Thu, 23 Jun 2011 06:54:00 +0000

From the Mortgage Finance Association of Australia (MFAA)

Date 23/06/2011

Yesterday afternoon the Senate voted on a motion by the Coalition and Independent Nick Xenophon to disallow the Government regulation to ban exit fees. The strategy (backing the MFAA’s campaign over the past few weeks) was to bring the Government to the table to prepare an amended regulation which would have exempted smaller lenders from the exit fee ban.

Regrettably when the vote was taken, there was a 35-35 tie (Senator Fielding voted with the Government and the Greens). This meant that the motion failed and the ban on exit fees goes ahead from 1 July 2011.

In our lobbying with the Treasurer, the Greens and Senator Fielding, we were advised that they were all aware of our concerns about the lack of breadth of competition in the mortgage market, but felt that allowing exit fees to continue was not the appropriate way to deal with our concerns.

The Greens told us: “After much consideration, (we have) decided that the Greens can’t support Xenophon’s disallowance this week (thus upholding the Swan regulation re exit fees), but the Greens will be seeking further reforms from the Government to improve non-bank lenders’ access to finance.”

Although just unsuccessful by a whisker on this occasion, our campaign has certainly made a mark in Canberra and we will continue our campaign to improve the breadth of competition in the mortgage market.

Thanks to all our members who supported the advertising campaign, or supported our lobbying by writing to politicians. Your efforts have not been in vain.

The MFAA also thanks the Coalition and Senator Xenophon for taking up the cudgels on our behalf. In particular we give special thanks and appreciation to Nationals Senator John Williams for the hours of work he put in to convince the Coalition to take up the case and his continuing support in the Senate.

We’ve now made our point – the campaign for enhanced competition will continue!

Equitimax's View on this Decision
==========================
Any regulation that reduced Bank Fees is a good one.
However the problem with this bill was that it undermines Non-Bank Lenders profitabilities more than the major banks and therefore reduced competition in the market. Rob & John