Going Back to Australia?: Australia Property Update April 2009

Article brought to you courtesy of Rich Harvey of www.PropertyBuyer.com.au

1. MARKET UPDATE

The Reserve Bank again cut the cash rate this month by 0.25% with
the cash rate now sitting at 3%, the lowest they have been since 1960.
Unfortunately the big four banks haven’t passed on the full rate cut
with the National Australia Bank not passing on any cut and the other
three major banks passing on a cut of just 0.10% rather than the full
0.25%.

Market expectations as at market close on the 7th April 2009 show an
expectation that the cash rate will bottom at 2.37 percent in October
this year. Just how much of the further anticipated 0.6% cut gets
passed on is anyone’s guess however, if this week’s action (or
lack thereof) by the banks is any indication, it appears unlikely the
full benefit would be passed on. It also seems apparent that gone are
the times where we see big cuts by the RBA, it appears they will now
be taking a more measured approach to any further rate cuts.

It isn’t all bad news though, interest rates are still lower than
they have been in more than 45 years and with petrol prices down from
last year’s peak, the average home owner is enjoying having
significantly more disposable income than they did during mid 2008.
Whilst there has been uproar about the banks not passing on rate cuts,
anyone with a mortgage must remember that nothing is certain and you
always need to account for potential changes to interest rates. When
working out whether or not to purchase one must always include
sensitivity for increases in interest rates and should have a trigger
point at which time they lock in their rates. Remember, good budgeting
at the time of property purchase can help overcome most fluctuations
in interest rates.

Consumer sentiment figures released this week by Westpac-Melbourne
Institute show that during April, sentiment increased by 8.3% to 92.7
points. Although the index remains below 100 points suggesting
pessimists still outweigh optimists it is a further positive sign that
the market is showing an improvement in health. With news of share
price increases, property value increases and an improving Australian
dollar over recent weeks it is unsurprising to see a lift in
confidence. Looming increases in unemployment are likely to see
pessimism in the market outweigh optimism however, it is encouraging
to see sentiment improving from its recent low.

2. WINNER BUYERS AGENT OF THE YEAR 2009

Rich Harvey, was awarded the “Buyers’ Agent of the Year 2009”
Award for Excellence by the Real Estate Institute of Australia at the
National Awards Ceremony in Melbourne.

“We are absolutely thrilled and honoured to be the recipients of
the 2009 REIA Award for Excellence, and to be named the Best Buyers’
Agents in Australia” said Rich Harvey.

The National Award for Excellence in Buyers Agency recognizes
superior service, creativity and contribution to the industry. The
awards are judged by three independent interstate judges and a
chairperson. They examine the buyers’ agents’ ability to deal
with challenging assignments, show innovation, leadership, information
technology, risk management and exceed client expectations.

The award substantiates propertybuyers’ achievement in being named
the best small business of the year in the prestigious 2007 National
Telstra Business Awards.

“Buying a home, investment property or a commercial premises is
probably the most expensive purchase a person will make in their
lifetime. Yet we see so many people make poor decisions based on
emotion, ending up with classic ‘buyers remorse’ or paying over
market value.

“This award helps to reinforce our message about ‘buyer
beware’. In the current volatile financial market conditions, it is
critical that buyers get totally independent advice on a property’s
true value.

“While the interest rate cuts and increased home buyer grants are
creating a much needed economic stimulus, it will still take time to
fully restore consumer confidence. Sydney is likely to be the market
that rebounds first as NSW has the largest undersupply issue due to
lack of infrastructure investment,” Rich said.

“We are getting good inquiry from expats, home buyers and savvy
investors that understand counter-cyclical investing. While many
buyers follow the herd, those that take advantage of negative
sentiment and appreciate the strength of our property market
fundamentals will win in the long term.

More information can be obtained from: -

www.Propertybuyer.com.au

Email:
info@propertybuyer.com.sg