The RBA board opted to keep the official cash rate at 4.75 per cent, the level reached when the board last hiked rates by 25 basis points in November last year.

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The Australian dollar has remained very strong in the March quarter on the back of strong commodity prices. The Australian dollar has been stronger than its US counterpart, trading at around 1.05 US dollars in mid-April and is expected to remain at around the current level in the near term.

The All Groups CPI rose 1.6 per cent in the March quarter 2011 and rose 3.3 per cent through the year. Melbourne’s CPI rose 1.7 per cent for the quarter and 3.5 per cent for the year, following the Australian trend. The most significant price rises this quarter were for education (+5.7%), health (+3.9%), and food (+2.9%).

Victoria’s unemployment rate for March 2011 has decreased substantially to 4.5 per cent from the previous month’s five per cent. An increase in both full-time and part-time employment saw the total number of people employed increase for the month. The decrease in unemployment was accompanied by a decrease in the participation rate, which fell to 65.7 per cent from 66 per cent over the month. Australia’s national unemployment rate for March 2011 decreased to 4.9 per cent from the previous month’s five per cent, in seasonally adjusted terms.

The Westpac – Melbourne Institute Consumer Sentiment Index increased by 1.2 per cent to 105.3 in seasonally adjusted terms, with four of the five components increasing for the month of April 2011. The current conditions index increased by 2.2 per cent, while the expectations index increased by 0.5 per cent for the month. The main increases in sentiment were in the component indices representing good or bad time to buy major household items (+3.5%) and economic conditions next 12 months (+3.4). The survey was conducted in the week where the RBA kept the cash rate unchanged and when the Australian dollar reached a record high against the US dollar.

May 1, 2011

Read more: http://www.theage.com.au/national/real-estate-agents-in-licence-rort-20110430-1e2c8.html#ixzz1LAOBz5tl

HUNDREDS of underqualified real estate agents are exploiting a legal loophole that enables them to own and operate Victorian estate agencies after just five days training in New South Wales.

The Real Estate Institute of Victoria has attacked the practice as a ”blatant scam”, potentially exposing home buyers and sellers to unprofessional and incompetent agents.

REIV chief executive Enzo Raimondo said about a third of all newly licensed real estate agents were using the interstate short cut to avoid the more rigorous training program in Victoria, which in most cases required 12 months of part-time study.

In the past two years, 438 Victorian agents have obtained their licences interstate, according to Business Licensing Authority figures.

”This loophole in our laws puts consumers at risk. Real estate agents should not be able to operate without the full knowledge of the laws in Victoria,” Mr Raimondo said.

Many agents have allegedly used fake addresses in Sydney to deceive the Victorian Business Licensing Authority, which is responsible for the transfer and registration of licences.

”If they are prepared to lie about their business backgrounds and where they live, what sort of real estate agents will they make?” Mr Raimondo asked.

The loophole was created by federal ”mutual recognition” laws that were introduced to help trades people and professionals transfer qualifications when moving to other states.

BLA figures show the number of Victorian estate agent licences granted through mutual recognition peaked at 40 per cent in 2008-09, up from 12 per cent in 2003-04.

The rort is not confined to residential agents. The Sunday Age is aware of several commercial agents who completed the ”intensive” course in Sydney, who now handle multimillion-dollar sales of office buildings and industrial properties.

One Melbourne-based agent, speaking on the condition of anonymity, completed a ”self-study course” at Sydney’s Kaplan Professional in four days at a cost of about $3000.

”I have no idea how it was assessed, but I’ve never heard of anyone failing. They even gave me all the information on how to transfer the licences back to Melbourne,” he said.

Kaplan Professional national business development manager Garth Heir defended the courses offered in NSW.

”We don’t have any control over the mutual recognition laws … We are just catering to the educational requirements of an industry,” Mr Heir said.

A spokesman for Consumer Affairs Minister Michael O’Brien said measures introduced by the Brumby government in March 2009 had improved the situation. The Consumer Affairs director is set to meet with the REIV, Institute of Conveyancers and Law Institute of Victoria this month to discuss their concerns about real estate regulation and practices

This group would have taken on their loan at a rate of more than 8 per cent and missed out on the sharp cut in interest rates by the Reserve Bank during the heat of the global financial crisis.

Mortgage broker Loan Market chief operating officer Dean Rushton said many of these borrowers are now coming off their fixed rate terms and looking to obtain a lower interest rate.

“Thousands of people who fixed their rates during 2007 and early 2008 when the cash rate reached 7.25 per cent have had to sit back and watch interest rates drop dramatically to combat the GFC,” Mr Rushton said.

He said that while the cash rate has crept back to 4.25 per cent from a near record low of 3 per cent, it is still well below the level when a fixed-rate loan was taken out in 2007/08.

The loan market has witnessed a 30 per cent jump in inquiries this year to move out of a fixed rate loan, most of which had been stuck at a rate obtained in 2008, he said releasing these findings on Thursday.

“The good news for these borrowers coming off fixed rates is that they are entering an extremely competitive market where lenders are wooing customers with a range of special offers and rate discounts,” he said.

Article – News.com.au

Read the full article here : http://www.news.com.au/money/property/thousands-freed-from-high-fixed-interest-rate-loans/story-e6frfmd0-1226039134600

House rents increased in every capital city except for Sydney, Melbourne and Darwin, a report by property data collection agency RP Data found.

Rents increased by 1.4 per cent nationally and 2.7 per cent in the capital cities over the past 12 months.

“With limited purchasing activity based on concerns about affordability, we are likely to see increasing demand for rental properties,” RP Data report analyst Cameron Kusher said.

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Mr Kusher said the rise in rents came against a background of sluggish property growth and higher interest rates.

“Limited new development during 2011 is likely to add to the upwards pressure on capital city rental rates, Mr Kusher said.

“As a result, we expect capital city rental growth to revert to around five-year average levels, with inner city units and outer more affordable housing stock having the strongest prospects for rental growth,” he said.

House rents in Sydney, Melbourne and Darwin were flat in the March quarter but rose 1.4 per cent in Brisbane, 1.3 per cent in Perth and 1.5 per cent in Adelaide over the same three months, RP Data said. In Canberra house rents increased 2 per cent in the quarter, while in Hobart they rose 3 per cent.

Western Australia’s Pilbara region continued to have Australia’s most expensive rental accommodation, with median weekly advertised rents for houses recorded at $1,650 per week, the report found.

“The Pilbara region’s rental market is tight and subsequently high prices are indicative of the isolated region’s strong demand for housing, mainly from resource sector workers and the insufficient supply of rental accommodation,” RP Data said in a statement on Wednesday.

The greatest falls in rents over the March quarter were in outer Adelaide and northern Queensland – which fell by 3.4 per cent and 2.9 per cent respectively.

The strongest growth was in the Pilbara, at 8.2 per cent.

The Age

http://theage.domain.com.au/home-investor-centre/rents-higher-as-buyers-hold-off-20110406-1d431.html

The Reserve Bank of Australia has decided to leave the cash rate unchanged at 4.75 per cent at its monetary policy meeting today.  The comments below, extracted from the official RBA statement, elaborate on the reasons for the decision.

“The global economy is continuing its expansion, led by very strong growth in the Asian region. The recent disaster in Japan will have a noticeable effect on Japanese production in the near term, although the impact on the broader Asian region is expected to be limited. Commodity prices, including oil prices, have risen over recent months, pushing up measures of consumer price inflation in many countries. A number of countries have been moving to tighten their monetary policy settings. Overall, though, financial conditions for the global economy remain accommodative.

Australia’s terms of trade are at their highest level since the early 1950s and national income is growing strongly. Private investment is picking up, mainly in the resources sector, in response to high levels of commodity prices. In the household sector thus far, in contrast, there continues to be caution in spending and borrowing, and a higher rate of saving out of current income. The natural disasters over the summer have reduced output and the resumption of coal production in flooded mines is taking longer than initially expected. Production levels should, however, recover over the months ahead, and there will be a mild boost to demand from the rebuilding efforts as they get under way.

Asset values have generally been little changed over recent months and overall credit growth remains quite subdued, notwithstanding evidence of some greater willingness to lend. Business balance sheets generally are being strengthened, and the run???up in household leverage has abated.

Growth in employment has moderated over recent months and the unemployment rate has held steady at 5 per cent. Most leading indicators suggest further growth in employment, though most likely at a slower pace than in 2010. Reports of skills shortages remain confined, at this point, to the resources and related sectors. After the significant decline in 2009, growth in wages has returned to rates seen prior to the downturn.

Inflation is consistent with the medium-term objective of monetary policy, having declined significantly from its peak in 2008. These moderate outcomes are being assisted by the high level of the exchange rate, the earlier decline in wages growth and strong competition in some key markets, which have worked to offset large rises in utilities prices. Production losses due to weather are temporarily raising prices for some agricultural produce, which will boost the March quarter CPI, but these prices should fall back later in the year. Overall, looking through these temporary effects, the Bank expects that inflation over the year ahead will continue to be consistent with the2-3 per cent target.

At today’s meeting, the Board judged that the current mildly restrictive stance of monetary policy remained appropriate in view of the general macroeconomic outlook.”

Source and Author - REIV

THE bull run in house prices is set to run out of steam as investors realise that credit costs are dwarfing anaemic yields, according to a senior banker.

National Australia Bank finance chief Mark Joiner yesterday said the property market was fully valued and likely to languish.

“I don’t think property can go up from here,” he said.

“It’s at the top of the range on affordability. It’s well out of line internationally.”

Mr Joiner’s comments followed a speech in which he called for the Federal Government to further bolster the savings rate by delivering tax concessions to savers.

“Eventually people are going to realise that taking a 2 per cent pre-tax yield from renting a house that isn’t going up in value doesn’t make any sense, if you’re paying 7 or 8 per cent for the associated loan,” he said.”

The domestic share market was also likely to fall out of favour, he said, following an extensive bull run that had yielded “great stock market success (and) great property success”.

“I talk to international investors and they really feel Australia has had its run,” Mr Joiner said. “We had banks growing credit at 15 per cent per annum – that’s not going to happen any more. We had a mining boom – a lot of that’s priced in. I think they’re looking elsewhere.”

Speaking at a lunch in Melbourne, Mr Joiner said the Government should use its tax forum scheduled for October to “debate the importance of a stronger deposit market in Australia”.

Tax concessions for savers would bolster the market, he said.

“I would like to see (a situation where) interest earned on up to $20,000 of money on deposit was tax free, or taxed at a concessional rate.”

Read more: http://www.news.com.au/money/property/house-investors-to-lose-interest/story-e6frfmd0-1226031748033#ixzz1IWcYvVxX