Friday, April 17, 2009

Market Update...

Market Update... As professionals in Real Estate we try to keep ourselves up to date with events which impact on the market and in turn bring this information to you. For those of you who don’t deal in property every day of the week but are interested in what’s happening and how your assets may be effected – let us give you a succinct update on what’s happening right now.
Interest RatesLast Tuesday the RBA cut interest rates by a further 0.25% bringing the cash rate down to 3%, with most of the big banks passing on a 0.1% drop to their clients. The cash rate is the lowest that Australia has seen in 49 years, since February 1960 when it stood at 2.94%.
Following multiple interest rate hikes up until September 08, an immense drop of 4.25% to now has alleviated mortgage stress for many, and according to CommSec these cuts are positively affecting the economy with home lending soaring. At Toop&Toop we’re certainly seeing a volume increase in sales, a particularly hot first home buyer bracket, a lift in the top end and prices remaining steady. Should conditions continue to deteriorate abroad, economists are predicting further rate cuts into 2009 but possibly just another quarter or half a percent with the end point now in sight.  
Australia Vs the Global MarketLast week CommSec released their latest report on the market and highlighted a key point… “The problem is that Australians are seeing the news from abroad and wrongly believing that what is happening abroad is happening here”. So what are the differences and why should Australian’s be more confident? Australian interest rates are still 3% higher than the US, which gives the RBA room to move should they need to further stimulate our economy. Australia remains under supplied with property as opposed to the huge oversupply in the US which has plummeted property prices. While US and UK banks are being ‘bailed out’, the Aussies are retaining their strength and our Government finances are solid. So really – it’s pretty good news!
Employment & MortgagesI think we’d all be aware of the unfortunate increase in unemployment figures of the past few months, and they look to continue this way throughout ‘09. It’s a terrible position that no home owner wants to find themselves in and this is a huge contributing factor to consumer’s lack of confidence.
Thankfully the federal government and banks are listening to us! A number of the big banks are introducing options to suspend loan repayments for up to 12 months, while the interest continues to compound on the loan – providing relief for those without an income. The key is to start talking to your bank manager should times get tough, there may be more positive options for you than you think!
So you can always be kept up to date with what’s happening in the market, we’re posting reports from the banks, economists and news from our team on the frontline at www.insidestory.toop.com.au

Anthony Toop, Managing Director

 
www.toop.com.au <http://www.toop.com.au>

 
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