To add insult to injury, the federal government in the budget has allocated the regional health facilities funds, what a gift that is: Regional Queensland is home to 1/3 of people living in regional Australia, our funds allocation: $164 millions of a $1.3 billion program, no where near a third . The electorate of Tony Windsor, one of the independents that’s propping up the Gillard Government, $120 Millions……….. The electorate of Mr Oakeshot, the other independent, $96 Millions………. Bob Katter … $590,000…. Maybe I’m too cynical, but the math doesn’t add up… and another thing : Anna Bligh is the president of the Labour Party!!! Go figure………….

“Rising interest rates are creating consumer nervousness and it is expected house and units prices will trend downwards as a result, decreasing by between 10 and 20 per cent,” Mrs. Carabot said in the 2011 First National Property Market Outlook released this week.

“An over-supply of land, only due to the GFC, coupled with high prices, are expected to see land prices trend downwards, where decreases are expected to be in the range of 5 and 10 per cent, creating a buyers’ market.”

According to the Outlook, a steady demand and short supply of rentals should see vacancy rates remain relatively flat, with potential increases of up to 1 per cent, or decreases of up to 5 per cent.

“As capacity to pay decreases with every interest rate rise, it is expected weekly rentals will trend downwards, decreasing by up to 5 per cent,” Mrs. Carabot said.

Mrs. Carabot anticipates two additional interest rate rises for 2011 which may dampen activity further.

“The main area of concern in the market is the enormous uncertainty that has been generated by the RBA and the banks on future rises,” Mrs. Carabot said.

“Another factor is the uncertainty over possible carbon taxes and electricity prices. There is also ongoing anxiety by investors on the potential of a ‘housing bubble’.”

Mrs. Carabot believes banks should be doing more to help keep the property market healthy and robust in 2011 and should consider abolishing mortgage exit fees, perhaps restoring some confidence in an otherwise stressed and apprehensive market.

“They should lessen stringent lending criteria and look at means of facilitating loans instead of insisting on minimum deposits, etc,” Mrs. Carabot said.

“Councils also should do more – perhaps consider less regulations and a more relaxed regime, to start.”

Mrs. Carabot said the government needs to do more to alleviate the supply versus demand issue such as an overhaul to the planning process and introduce a national planning authority.

“Currently, the process from planning to sub-division is far too long and the government needs to look at speeding up the approval process and land title issue and streamline the process so that there are clear and complete guidelines,” Mrs. Carabot said.

The Governor didn’t want to dissuade people of the view that while rates could rise in the future, it would “not imminently” occur.

The Reserve Bank Governor was asked about market views about where rates will be in a year’s time and responded: “I’m not sure myself actually”. But he did note that there was value in getting rate hikes out of the road “so you can sit and rest for a while”.

What does it all mean?

Australia’s top economist – the Reserve Bank Governor – has candidly remarked that he wasn’t sure where rates would be in a year’s time: “I’m not sure myself actually.” Of course no one does know with certainty where rates will be in the future, although some economists regularly give the impression that they do have a more accurate crystal ball than the Reserve Bank. The Reserve Bank Governor said “the fact is I can’t tell you with certainty about what we will be doing in six months’ time.”

But while not providing numerical forecasts for rates over the coming year, the Reserve Bank has certainly given plenty of hints that they have done enough for now.

Governor Stevens noted that official rates were now a little above normal. And while he noted that recent rate decisions were “finely balanced”, he thought that most people would be happy to get the rate hike out of the road “so you can rest for a while.” And while he acknowledged criticism of the last rate hike (RBA “criticised for being trigger happy”), the RBA Governor defended the decision, noting that there wasn’t too many times when you look back with regret that you lifted rates too early.

The Reserve Bank Governor and the Bank’s Assistant Governor Guy Debelle observed that while economists expected cash rates to be around 5.5 per cent, market pricing tipped rates of five per cent mid next year. The Governor suggested that market pricing regularly changes but he didn’t want to dissuade people of the view that in the future there would be gradual increases in rates and not sufficiently close together.

Overall, the Governor suggested that market pricing was about right – that is, that there could be a rate hike before mid next year and perhaps another increase late in the year.

The Reserve Bank Governor has confirmed that inflation was likely to remain in the target band over the coming year, no doubt underpinning the view that he could now pause on rates for a while: “Over the coming year, we think that inflation will be pretty close to where it is now, consistent with the target.”

The Governor noted that a “normal” cash rate was 5.5 per cent, but banks had lifted rates a percentage point above the cash rate. “Most recently, as you know, the Board decided to lift the cash rate by 25 basis points. Many lenders raised their loan rates by more than this. These moves have left the overall setting of monetary policy a little tighter than average, as judged by interest rate criteria.” The Governor noted that the Board judged at the last meeting that “it was prudent to take an early modest step in the tightening direction.”

Governor Stevens has referred to the “sea-change” in consumer behaviour with people now cautious to spend and borrow. He acknowledged that while this is tough for retailers, noting that consumption was below average at present, but said it was likely to persist for a while longer. He noted that the trend would be helpful given that significant investment was planned: “I suspect a little more caution on consumption is not a bad thing if we are to fit it all (investment) in.”

The Reserve Bank officials have highlighted supply side deficiencies with Assistant Governor Philip Lowe noting the need for investment in transport, education and health. The Reserve Bank Governor also said that increased investment in electricity, water and urban infrastructure “would be desirable”. Further, Stevens noted that if the amount of new private sector investment were to be efficient, it would need to be accompanied by public sector investment.

Certainly the Reserve Bank is laying down the challenge to government to do its part in keeping down inflation and the level of interest rates by correcting supply side deficiencies.

The Reserve Bank Governor rejected concerns about the size of Australia’s public debt: “we do not have a problem of public debt sustainability”. He further noted that government debt “is not a material problem.”

The Governor sought to highlight changes in banking over time, noting the reduction in bank operating costs and reduction of the net interest rate margin. He also sought to correct perceptions that banks were given free access to the Federal Government’s AAA rating to raise wholesale funds, stating that the Government “sold the guarantee at quite a nice price” and would collect $1 billion per annum in fees from banks as a result.

What are the implications for interest rates and investors?
Investors will welcome the relative candid comments by the Reserve Bank Governor on interest rates, and the economy more broadly. Glenn Stevens reckons that rate settings are appropriate to keep inflation in the target band over the coming year. Certainly he acknowledges that no one knows the future with certainty, but Glenn Stevens must be pretty happy with a situation where the economy is recording good growth and where inflation is within the target band – especially when other economies are struggling with weak growth, high unemployment and deflationary risks.

Many economists, analysts and media commentators will attempt to put their own spin on the RBA Governor’s comments. We would simply suggest that people get a transcript of his testimony and read it yourself. The messages are fairly clear – especially for a Reserve Bank that has been accused in the distant past of being quite opaque.

Monetary policy can now be described as “tight” – not markedly so, but rates are between a quarter and a half a per cent above “normal”. As we noted when rates were lifted earlier in the month, the RBA has effectively taken out insurance by lifting rates – the hope being that you do a little now and a lot less in the future.

SOURCE: Craig James, chief economist, CommSec

Peter’s Comment:

Finally we get some.. reassurances from the Chief as to what the future might hold. Apart from putting the lie on all the “experts” that seem to know… what the economy will be doing in the next six months…. ( All of them Experts didnt see the GFC…) and have been so active at scaring everybody off, he has also reassured all of us that the pain is at an end.

Maybe this alone will restore some confidence in the residential and investment market. We can all now sleep easy and hopefully in the new year, the market will start to move. We need new housing both apartments and villas and residential houses, we need more construction and paramount to all some certainty.

Thank you for reading, hopefully Santa will bring you what you have asked for!!!

Merry Christmas to all and a Happy New Year.

Mareeba First National Real Estate

Mareeba First National says the recent interest rate hikes demonstrate the increasing need for Governments and the Big Four Banks to work together to address the key issues of supply and demand and housing affordability.

“There seems to be so much debate going on about the market, but no real communication between the banks and the government, and between them they are the ones with the power to fix the property market problems,” Selena Carabot from Mareeba First National said.

“There is lots of finger pointing going on, but there is not any real discussion about what we can do to fix it.”

“At the end of the day it is the home buyers and owners who suffer, while the banks keep making record profits and governments keep their heads in the sand,” Selena said.

“What they should be doing is looking to influence affordability and supply by reducing or abolishing stamp duties, abolishing exit fees, introducing more competition into the banking sector and looking at policies that will stimulate the construction industry.

“Instead, we keep putting up with inaction from the government and greed from the banks.”

Selena Carabot said she was particularly unimpressed by banks who deemed it appropriate to increase their standard variable rates by as much as 14 basis points above the RBA increase.

“What is most disconcerting about this is that it seems each of the banks are taking their turn at being the bad guy and being the first to lift their rate higher than the RBA increase, ”  Selena said.

“As one consumer interest group spokesperson said, if all the banks moved at the same time by the same amount, and this was a horse race, you would have a steward’s inquiry.”

But not even the prospect of a Senate enquiry into banking competition, or Parliamentary debate on legislation forcing banks to lift rates by no more than the RBA, is enough according to Selena Carabot.

“Interest rates on their own are not the problem.  We need to have a look at all the factors affecting the property market: planning approvals, interest rates, fees and charges, everything all at once rather than this piecemeal approach,” Selena said.

“New banking policies are called for but so is a national approach to planning, because ultimately it is the “mum and dad” property owners who will suffer the most.

“We need political leaders who have the fortitude and imagination to reform property taxes and the banking sector if there is any hope of addressing affordability issues.”

“ There is also a need for the Federal Government to rein in the States, every time fees and charges go up arbitrarily and are seen as unfair, a little more confidence goes down the drain.”

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Issued by: First National Real Estate

For further information Selena Carabot, Principal from Mareeba First National Real Estate on 07 40 922 111

A recent NSW court decision makes it clear that all owners throughout Australia have a ‘duty of care’ to tenants to provide a safe and habitable property, after more than $840,000 was awarded to a tenant injured by broken glass.

The case was Hunt v Roads and Traffic Authority of NSW, and the ruling cuts right to the heart of the issue of what ‘duty of care’ an owner and their agent owes a tenant, their awareness about potential problem areas in rental properties, and the importance of complying with building codes when conducting even routine maintenance.

The facts of the case, according to the NSW District Court:

In April 2005, a tenant of a rental property in Ashfield was seriously injured after his hand struck and shattered the large glass panel that formed part of the front door.

The tenant sued the owner of the property, the Roads and Traffic Authority, and the managing rental agent, alleging negligence because the door had not been fitted with safety glass contrary to building codes.

Here’s why:

While the use of safety glass was not mandatory at the time the rental premises were built, the judge found that the owner/managing agent was responsible for the tenant’s injuries because they failed to install safety glass when conducting repairs on the premises after it became mandatory.

In October 1998, a glass panel in the front door to the property was broken during a burglary. The agent employed a ‘handyman’ – rather than a professional contractor or glazier – to fix the damage, who did not install safety glass for that panel or anywhere else on the premises where non-safety glass was still in use that could pose a reasonable risk of injury.

In March 2005, which was one month before the injury was sustained by the tenant, a glass panel in the door to the bedroom was broken during a failed burglary attempt. The judge found that yet again no measures were taken to install safety glass in the property.

This was important because what happened or didn’t happen as far back as 1998 had a direct impact on the tenant’s injury seven years later and, ultimately, the outcome of the case and the ruling.

In practical terms, this ruling means that owners and managing agents will have to closely examine the present condition of their properties and review maintenance records to ensure that even work done in the past meets building codes.

Importantly to note, the court rejected arguments that the tenant ‘accepted’ the premises as it was at the time the tenancy agreement was signed. The judge said that the owner must still take reasonable care ‘in respect of dangers not readily apparent on inspection’.

OUR ADVICE

As property owners it is important that you have the property inspected annually by professionals to ensure that the property is safe and fit for the tenant to live in.  This should include:

• A building/glazier inspection
• An electrical inspection
• A pest inspection
  • A pool inspection (if applicable)

As your managing agent we are not professionally trained or qualified to undertake these inspections.  The inspections that our property managers conduct are visual inspections only to provide feedback on the presentation of the property.

Equally important, if we recommend repairs are required, prompt action must be taken by engaging qualified and insured tradespeople appropriate for the works to protect you and your investment.

* The decision is currently being appealed by the insurance group Real Cover, who provided the professional indemnity insurance policy held by the managing agent.

How to save up to $75,000 on your Home Loan

Research has shown that property owners with bank loans can save more than $75,000 over the life of their home loan simply by asking for a better deal, but two-thirds of people are too afraid to ask.

A one per cent decrease on a $400,000 mortgage will save you more than $75,000 over 25 years, so it really does pay to pick up the phone and ask.

The banking industry is becoming more and more competitive to secure new business and loans – just like any other business.

The big banks are more likely to do deals on everything from loan interest rates to transaction account fees, in comparison to the smaller banks and credit unions who generally won’t reduce fees, but will have lower upfront costs.

With interest rates on the rise it is important for property owners to look at ways of reducing their monthly repayment costs.  Invest a couple of hours into contacting other banks and lending institutions to find out what their best rates and deals are, and then see if your bank will match them.  There is no harm in asking.

More bank employees are now being empowered to cut a deal to keep someone’s business, but it is important that you speak with the right person.■

According to research commissioned by the First National Real Estate network, more than one in four women say real estate agents take more notice of their partner when they buy a home together, with older women feeling they are the most discriminated against.

“This is completely unacceptable in this day and age,” Selena said.

“Women play a critical role in the property purchasing decision, and as such, it is crucial agents take this into account, from the way the property is marketed, right through to inclusive conversations with both sides of the home buying relationship.

“Apart from being discriminatory, it is not good business practice and bad for the industry overall.

“Statistics show the number of women planning to purchase property on their own has more than doubled in the last two years alone, so they are an important part of the real estate market.”

The survey, conducted on behalf of First National Real Estate by Newspoll, interviewed 1200 women from around Australia, across all age groups, and found that the older women got, they more they felt they were not being considered, or listened to by real estate agents.

“While a slightly higher percentage of women who felt this way were found in capital cities, 28 per cent, it was followed closely by those in metropolitan areas outside the capital city centres, at 22.7 per cent,” Selena said.

“The feeling seemed more prevalent in those who had bought a house between 11 and 20 years ago than those who bought a house more than 20 years ago.”

The survey also found that the major influence on the home buying decision for women was whether the area was safe to live in.

“Interestingly, the older the women surveyed were, the less important this became as an influencing factor, although it was still the key one,” Selena said.

“For 100 per cent of the women surveyed aged 24 to 28, safety was a major influence, but this declines as the women got older.  78.2 per cent of those aged 25 to 34, 71.1 per cent of those aged 35 to 49 and then only 59.3 per cent of those over 50 considered it a major issue.”

Other main influences for women were:

• The number of rooms, with this being the top reason for 55.8 per cent of the 35 to 49 year old age bracket
• Potential for the home to increase in value – 55.1 per cent
• Outdoor living area – 49.2 per cent
• Having off-street parking – 45.4 per cent
• The home having good potential to improve or renovate – 44.2 per cent
• Proximity to shops – 35.7 per cent
• Home already being new/fully renovated – 29.5 per cent
• Proximity to public transport – 29.2 per cent

“Safety, space and value are clearly issues of major concern to women and it is important that agents remember that when selling or renting a home, or helping women to find their next purchase” Selena Carabot said.

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Issued by: First National Real Estate

For further information contact Selena Carabot, Mareeba First National Real Estate, on

07-40 922 111   www.mareebafirstnational.com

On the other hand you have the Real Estate Industry that is Bleeding from all pores, wages, taxes, licence fees, electricity costs, transport, fuel and all the rest have gone up( sales are depressed) but we are forced to accept a “Maximum” commission for sale properties and management fees for  rentals. We cannot raise our fees, the Government has said so.

All very well and good for the Banks and the various levels of Government to raise fees and charges but the poor Real Estate agent has to absorb every single cost increase. The regulatory framework we have to struggle under is enormous and no relief in sight!

We don’t set prices, margins or percentages. The government does it for us…… Witch other industry can work like this one? NONE! Every other business has been “De-regulated” except the Real Estate industry we are OVER Regulated!! I suppose there’s always another Public Servant that has to Justify his/her Job!!