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Click on the “Downloads” menu to view our products and rates that can be easily downloaded on your computer.  

If you have any questions or you would like to book a no-obligation appointment with one of our staff, call our hotline 02-8844 8989 or email marketing@idenmoney.com.au  

Source: http://www.canstar.com.au/

Although there were no significant changes in housing affordability in the September quarter, the total number of loans began to decrease, particularly in the first home buyer market.

The number of loans to the first home buyers decreased by 11.7% to 48,507 loans. Despite this decrease in the September quarter, over the year, loans for first home buyers nationally increased by 72.8% and the total number of loans increased by 41.3%.

The Australian Capital Territory remained the most affordable state or territory in which to buy a home, where the proportion of income required to meet loan repayments increased slightly to 17.2%.  This is 11.8 percentage points below the national average. New South Wales remained the least affordable state or territory in which to buy a home, where the proportion of income required to meet loan repayments increased to 31.2%; 2.3 percentage points above the national average.

For the September quarter, Tasmania and Queensland showed the biggest improvement in housing affordability, with the proportion of income required to meet loan repayments decreasing by 1.3 percentage points. Housing affordability in Victoria declined the most, with the proportion of income required to meet loan repayments increasing by 0.9 percentage points for the September quarter.

According to the latest RP Data-Rismark National Dedonic Index, Australian home values rose by an indicative 1.4 per cent in October after a sluggish 0.4 per cent growth in September.

Over the first 10 months in 2009, house prices have now risen by 10 percent. According to RP Data’s Senior Research Analyst, “the strong growth figures throughout October after a slowdown during September show that the market is very resilient and that the 25 basis point interest rate increase during the month has not immediately impacted the market.”

The biggest story of 2009 has been a strong recovery of Sydney and Melbourne housing markets with Melbourne leading the way by delivering capital gains of +14.9 percent while Sydney had a cumulative growth of 9.9 percent. Other cities that have performed strongly this year besides Melbourne and Sydney are Darwin (+12.7 per cent), Canberra (+11.0 per cent), Brisbane (+6.9 per cent), Perth (+6.1 per cent) and Adelaide (+4.6 per cent).

On average, borrowers can expect to pay an extra $45 on a $300,000 mortgage as a result of yesterday’s rate hike.

However, industry experts warn that a few more rate rises are likely to occur by early next year or earlier by the end of this year, pushing the cash rate from 3 percent - the lowest in over 40 years in the middle of this year to up to 5 percent by the end of next year.

Housing Industry Association’s chief economist Harley Dale said this rate rise for the second month should not make a large material difference to the housing demand. According to the HIA, figures show that sentiment towards buying new homes would start being affected when mortgage rates start hitting the 10 year average of 7.25 percent.
 
As per a recent speech by treasury secretary Dr Ken Henry, Australia has been the best economy to recover from the recent global crisis and is the only one hitting positive growth among all advanced economies of the world. This once again emphasises the resilience of the Australian economy.

Iden Money considers that for anyone contemplating buying property there won’t be a better time due to continued low interest rates, high rental demands and the apparent signs of the recovery of the Australian economy. From first home buyers to investors, opportunities exist in the present market to do a good deal.

Iden Money can help you provide the best solutions for your mortgage needs with its wide range of products and team of experienced loan writers. Not only do we have lots of options to choose from, our rates have consistently been lower than the major banks in Australia.

If you are thinking about a home or investment loan, talk to us now. Call our friendly team on 02-8844 8989 or complete the quick enquiry form on our website.

The Reserve Bank of Australia’s decision to raise interest rates yesterday by 25 basis points took most by surprise.

According to Mortgage Business’ recent straw poll, 71.8 per cent of brokers didn’t expect the RBA would raise rates in October. Of the 351 respondents only 25.4 per cent tipped the RBA to raise rates while 2.8 per cent were unsure.The Real Estate Institute of Australia (REIA) president David Airey slammed the RBA’s rate rise and said it was likely to be followed by a further 25 basis points next month.

“In home loan terms, I believe the variable rate will gradually rise from 5.5 per cent to around 7.5 per cent over the next 2 years,” Mr Airey told Mortgage Business.

“The RBA has lifted rates in response to the threat of a potential housing bubble. However, the risk of a bubble remains low with housing supply low and new dwellings down 50 per cent.

Mr Airey said that rather than waiting for the September figures and analysing the data carefully to see exactly where the market is moving the RBA acted on older information – the most recent being August figures.

Loan Market executive director John Kolenda also believed the RBA had been too hasty in its decision to raise rates.

“The rate rise will hurt consumer and business confidence and possibly have an adverse impact on a national housing market which has so far weathered the global economic downturn,” Mr Kolenda said.

Credit card scams, identity thefts are very sensitive issues and many people have suffered. So hopefully this message below can help you be aware of one of those scams.

“New Credit Card Scam”

“This one is pretty slick since they provide YOU with all the information, except the one piece they want.Note, the callers do not ask for your card number; they already have it… This information is worth reading. By understanding how the VISA & Master Card Telephone Credit Card Scam works, you’ll be better prepared to protect yourself.

One of our employees was called on Wednesday from ‘VISA’, and I was called on Thursday from ‘Master Card’.. The scam works like this: Caller: ‘This is (name), and I’m calling from the Security and Fraud Department at VISA. My Badge number is 12460. You r card has been flagged for an unusual purchase pattern, and I’m calling to verify. This would be on your VISA card which was issued by (name of bank). Did you purchase an Anti-Telemarketing Device for $497.99 from a Marketing company based in ?’

When you say ‘No’, the caller continues with, ‘Then we will be issuing a credit to your account. This is a company we have been watching and the charges range from $297 to $497, just under the $500 purchase pattern that flags most cards. Before your next statement, the credit will be sent to (gives you your address), is that correct?’

You say ‘yes’. The caller continues - ‘I will be starting a Fraud investigation. If you have any questions, you should call the 1- 800 number listed on the back of your card (1-800 -VISA) and ask for Security.’

You will need to refer to this Control Number. The caller then gives you a 6 digit number. ‘Do you need me to read it again?’

Here’s the IMPORTANT part on how the scam works.

The caller then says, ‘I need to verify you are in possession of your card’. He’ll ask you to ‘turn your card over and look for some numbers’. There are 7 numbers; the first 4 are part of your card number, the next 3 are the security Numbers that verify you are the possessor of the card. These are the numbers you sometimes use to make Internet purchases to prove you have the card. The caller will ask you to read the 3 numbers to him. After you tell the caller the 3 numbers, he’ll say, ‘That is correct, I just needed to verify that the card has not been lost or stolen, and that you still have your card. Do you have any other questions?’ After you say No, the caller then thanks you and states, ‘Don’t hesitate to call back if you do, and hangs up.

You actually say very little, and they never ask for or tell you the Card number.. But after we were called on Wednesday, we called back within 20 minutes to ask a question.. Are we glad we did! The REAL VISA Security Department told us it was a scam and in the last 15 minutes a new purchase of $497..99 was charged to our card.

Long story - short - we made a real fraud report and closed the VISA account. VISA is reissuing us a new number. What the scammers want is the 3-digit PIN number on the back of the card, don’t give it to them. Instead, tell them you’ll call VISA or Master card directly for verification of their conversation. The real VISA told us that they will never ask for anything on the card as they already know the information since they issued the card! If you give the scammers your 3 Digit PIN Number, you think you’re receiving a credit. However, by the time you get your statement you’ll see charges for purchases you didn’t make, and by then it’s almost too late and/or more difficult to actually file a fraud report.

What makes this more remarkable is that on Thursday, I got a call from a ‘Jason Richardson of Master Card’ with a word-for-word repeat of the VISA scam. This time I didn’t let him finish. I hung up! We filed a police report, as instructed by VISA. The police said they are taking several of these reports daily! They also urged us to tell everybody we know that this Scam is happening.”

Suburbs have been chosen based on their location attributes, the value of housing in the area, the level of amenities in the suburb and the demographic mix.

According to St George chief economist Besa Deda, the locations should continue to grow and therefore suit buyers looking to live in a blossoming area and investors seeking capital growth.

In Sydney the best ‘value for money’ suburbs were Granville, Rockdale, Lidcome, Riverwood and Waterloo.

Granville’s 18.5 km distance to the inner city and median house price of $347,500 made it the standout performer in Sydney.In Melbourne the city’s hotspots were Chadstone, Ashburton, Brunswick, Flemington and Fawkner.

According to Ms Deda, the 24 hotspots included an interesting mix of older demographic areas where the dwellings have great potential for renovation, and younger demographic areas where the dwellings offer good value for money.

“Savvy home buyers and investors should look outside the square and consider the areas which have not attracted the same level of attention as traditional blue-ribbon locations,” Ms Deda said.

“For example, some of the suburbs identified in the National Hotspot research include light industrial areas which are expected to eventually transform into residential areas with amenities.”

Hotspots:

Sydney
Granville
Rockdale
Lidcombe
Riverwood
Waterloo

Brisbane
Keperra
Margate
Cannon Hill
Fairfield
Kedron

Melbourne
Chadstone
Ashburton
Brunswick
Flemington
Fawkner

Hobart
North Hobart

Canberra
Dickson

Perth
Bassendean
Thornlie

Adelaide
Thebarton
Glanville

Darwin
Rapid Creek

Regional Australia
Gulliver
Redan

What does this mean to home loan borrowers? Let’s take a look.

What You Pay Now

Our example is based on a $250,000 loan at the major banks’ average variable rate of 5.77%.

Principal and Interest repayments on this loan over a 30 year term are $1462. This means that if rates remain as they are you will pay $17,544 over 1 year, $35088 over 2 years and $52632 over 3 years.

What If The Rate Rises 1% Between January and July?

If the cash rate is increased by .50% in January and then a further .50% in April you would pay as follows:

1 Year - $18,762

2 Years - $38,262

3 Years - $57,762

Bank Fixed Rates

Let’s look and see what the difference would be if I locked into a bank fixed rate for 1, 2 and 3 years effective on the 30^th September 09.

Bank 1 year rates currently average about 5.65%. Repayments for 1 year would be $14,125.

Bank 2 year rates currently average about 6.50%. Over 2 years repayments will be $37,920.

Bank 3 year rates current average 7.00%. Over 3 years repayments will be $59,868.

Summary of What You Could Pay

NB – The above assumes that variable rates do not rise after July 2010.

CONCLUSION

These examples are simple scenarios based on average bank rates. If you have a higher or lower variable rate there could be major differences, especially for borrowers on Pro Packs where variable rates may be as low as 5.07%. These borrowers will notice a substantial advantage in remaining on the variable rate when comparing their costs to longer fixed rates. You can use the loan repayment calculator at www.idenmoney.com.au to do your own calculations.

The winner in the above scenarios is the borrower who fixes for 1 year now, however that would incur 2 years on variable in this example. Much depends on how high variable rates move up in the next year.

For those who think variable rates will rise by more than 1% in the next 2 years, locking in to a 3 year rate now may give comfort in the knowledge that repayments can continue to be made at that level for the duration of the fixed rate.

The additional factor here is that some economists are saying fixed rates may fall slightly.

There is a lot of crystal ball gazing here. The best thing that borrowers can do is to read up on interest rate articles written by banks and economists. Keep at it until you develop your own opinion as to what might happen.

Iden Money currently has funds available at the following rates as at 15/9/09:

Variable -            between 4.78% and 5.25%

1 Year Fixed -   5.25%

2 Years Fixed - 6.09%

3 Years Fixed - 6.84%

You could save a lot of money by moving to an Iden Money rate. Click on Rates and Fees above for a full list of rates and Comparison Rates.

If you would like to discuss borrowing home loan money at these rates, give us a call on our New Business Hotline – 02 8844 8989.

The big worry for lenders in the housing finance market has been that when the strong push from first home buyers came to an end the market would lose its momentum and be back in the doldrums.

Housing finance figures released by the Australian Bureau of Statistics  this week suggest that first home buyer demand has indeed peaked.  After rising steadily in response to low rates and government stimulus first, home buyer share of all dwellings financed peaked at 28.5 per cent in May and fell back to 27.1 per cent in June and 25.7 per cent in July. Overall, the housing finance market softened in July. Total dwelling finance of $22.5 billion in July was down 2.3 per cent on the previous month.

However, there were positive signs. Westpac senior economist Andrew Hanlan pointed out in a note on the figures that “upgraders” continue to strengthen. Lending to so-called upgraders increased by 1.7 per cent in July and has climbed 26 per cent so far in 2009.

Upgraders are not a group identified in the official figures; Westpac calculates upgraders by removing refinancing from the ABS owneroccupied group.

The bank’s commentary says: “First home buyers responded to government incentives quickly and in large numbers – so much so that a reversal is now underway from unsustainable highs.

“Upgraders continue to respond to extremely expansionary monetary policy, with variable mortgage rates at their lowest since 1968.

“While the RBA has signalled an intention to lift rates from current lows, policy will remain expansionary for some time, with rates a long
way below average levels.”

The consensus among big bank economists is that rates will start to rise in the first quarter next year but there is a wide range of expectations as to how far rates will have risen by the end of 2010.  ANZ predicts that the official cash rate will move from its current level of three per cent up to 3.75 by September next year. Westpac predicts that the cash rate will start to move in the March quarter next year and will reach four per cent by the end of the year. The most bearish of the big banks on rates is Commonwealth Bank, which says it expects rates to remain on hold until the fi rst quarter of next year but then rise quickly to 4.75 per cent by the end of the year.

The economists have not ruled out a rate rise before the end of  the year. ANZ’s commentary says: “The probability of monetary policy tightening before the end of the year is rising. At this stage, we believe the RBA will need to see further evidence on how the household sector performs to make this decision. Should retail sales and employment data continue to hold firm in the coming months, then there is a serious probability that rate hikes could commence from November.”

Stephen Koukoulas: Global Strategist, Currency & Fixed Income Research, TD Securities
David Wyss: Chief Economist, Standard & Poor’s
Dr Subir Gokarn: Chief Economist, Standard & Poor’s, Asia Pacific
Warren Hogan: Head of Australian Economics & Interest Rate Research, ANZ
Bill Evans: Global Head of Economics, Westpac
Rory Robertson: Interest Rate Strategist, Macquarie
Sally Auld: Interest Rate Strategist, J.P. Morgan Australia LimitedThe topics covered included:

•    The Great Global Recession. Has it ended? What will the recovery look like?
•    The monetary policy exit strategy – how can central banks hike?
•    How can Governments repair their tattered budgets?
•    Australia’s recession has been mild, or will it stay that way?
•    How good was the Government and RBA policy to limit the fall out?
•    The RBA are upbeat on China – is this a big enough offset to other global weakness?
•    House prices look firm…or do they?
•    2010 – what sort of recovery will it be?

There was general consensus on the following:

-    Australia is doing satisfactorily – albeit the economy is just chugging along – probably at about 0 at the moment.
-    They all think employment will peak around the middle of next year
-    They all think interest rates will not move for a while yet (read RBA cash rate)
-    US – is still doing it very tough as is UK, and has some way to go yet.
-    China is proving to be a soft landing partner
-    India is also starting to become an important partner

Opinion differed on when interest rates would rise but they generally agreed on between February and June next year and that rates would rise by up to 1.25% by the end of 2010.

This begs the question as to what borrowers should do regarding locking in on fixed rates right now, given that short term fixed rates are already higher than most banks’ standard variable rates and longer term rates (3 to 5 years) are considerably higher. This is a difficult time to make this decision. Some economists are predicting a flattening of the yield curve ie the longer fixed rates coming back a bit, closer to the 1 and 2 year rates. This should be considered along with the borrower’s current variable rate and the effect of the timing on increases to the variable rate. This is very much an individual exercise for each borrower, dependent on their current variable rate and it’s possible movement upward versus their view on the timing and movement of fixed rates and the actual fixed rates currently offered by their lender.

There is no crystal ball on interest rates and borrowers are advised to keep themselves informed as much as possible on this matter by reading newspaper and web articles. The major factor here is whether or not a borrower will benefit by taking a higher, longer term rate now, rather than remaining on variable and following rates up. Being on a low, low variable rate takes some of the importance and urgency away from making this decision.

Iden Money and Property can provide such a low variable rate. If you would like to discuss interest rates and see the best home loans, give us a call on 02 8844 8989.