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THE Reserve Bank has left interest rates on hold

THE Reserve Bank has left interest rates on hold at 3 per cent, as widely expected.

In a statement released after the announcement, governor Glenn Stevens said conditions in global financial markets remain generally "on a path of gradual improvement.

He went ahead and added. In Australia, economic conditions have been stronger than expected, after a mild downturn a year ago.
The effects of the fiscal stimulus on consumer demand have now faded, but household finances are being supported by strong labour market outcomes and a recovery in net worth.
Public infrastructure spending is now boosting demand, as is an upturn in housing construction.Investment in the resources sector is strong.

The rate of unemployment appears to have peaked at a much lower level than earlier expected.
Interest rates to most borrowers nonetheless remain lower than average.
If economic conditions evolve broadly as expected, the Board considers it likely that monetary policy will, over time, need to be adjusted further in order to ensure that inflation remains consistent with the target over the medium term.

The Real Estate Institute of Western Australia has welcomed the decision by the Reserve Bank not to raise interest rates.

REIWA President Alan Bourke commended the RBA for the reprieve.

“There are many first home buyers, in particular, who have entered the housing market in recent months and who are working hard to make ends meet. This rates pause will make a difference for many of them,” Mr Bourke said.

However, Mr Bourke warned that if the economy continued to grow strongly the RBA may need to increase rates by around half a percent over the next six months.

“This measure would seem likely, so home owners should understand that this pause in rate rises may not last, and those people with mortgages should take steps to budget for any further increases and keep an eye on their spending,” Mr Bourke said.

Mr Bourke said that while first home buyers were diminishing in the market with the removal of the Federal boost, upgrade buyers were strong in the market and seemed untroubled by interest rates.

Article added by: Communications

Article derived from REIWA.

Trade-up buyers buoy Perth market

New data from the Real Estate Institute of Western Australia is showing a continued swing away from first home buyer activity towards a stronger trade-up market.

REIWA Deputy President David Airey said that despite the First Home Owners Boost from the Commonwealth being halved late last year, sales among these buyers remained strong in the December quarter.

“Notwithstanding the first homebuyers purchasing homes at the cheaper end of the market, Perth’s median house price has held up and is increasing due to renewed activity with trade-up buyers,” Mr Airey said.

“REIWA data show that for the last six months it was sales of homes valued at between $500,000 and $600,000 which dominated the market, but for the December quarter alone we saw sales in the $600,000 to $750,000 range jump significantly from around 10 per cent in September to just over 14 per cent in December,” Mr Airey said.

Mr Airey said that the renewed confidence among upgrade buyers had been brought about by an end to falling house prices, a resurgent local economy and despite interest rate rises.

“If we compare sales turnover between the December quarter of 2008 with the December quarter of 2009, we see that for homes valued at between $600,000 and $750,000, the turnover has jumped from 8 per cent of sales to 14 per cent.

“For homes valued at between $750,000 and $1 million, sales have jumped from 6 per cent of turnover to almost 9 per cent in the same period, while premium property valued at between $1m and $2 million have increased from 4 per cent of sales to 6 per cent,” Mr Airey said.

As Perth’s property market stabilises and returns to a more normal pattern, the average number of selling days has fallen to 54 days, down by 10 days on the September quarter.

Mr Airey predicted that the shift in buyer activity would soon see Perth’s median house price break though the peak of $475,000 reached in December 2007.

“We have recovered almost all the decline in the median price which was experienced in 2008,” he said.

Article added by: Communications

Derived from REIWA

REIWA raises $10,000 for Toodyay bushfire appeal

The Real Estate Institute of Western Australia has rallied to support the bushfires appeal with the institute donating $5,000 towards the Toodyay Men’s Shed organisation.

REIWA President Alan Bourke said the institute was keen to help and wanted to do something practical.

“We were hearing from our members in the Avon valley that there was a specific and urgent need for tools and equipment, and so we have targeted our donation directly to that cause,” Mr Bourke said.

Mr Bourke said that Bob Adair and his committee from Men’s Shed Toodyay were co-ordinating the collection, storage and distribution of tools and equipment for those effected by the fires.

Men’s Shed is a national program which offers social support to men living in rural and regional Australia, however the tool library will be made available to all deserving local families.

“Men’s Shed is collecting a range of suitable equipment which they can loan to those who most need it, and which will ultimately remain the property of Men’s Shed as part of a tool library for ongoing local use,” Mr Bourke said.

Men’s Shed have indicated that items which people cannot easily afford or might need only once will be a priority for the library. This might include such things as scaffolding, 15 foot ladders, welders, chain saws, large drills and so forth.

“Real estate agents from the Avon valley have also shifted their regular breakfast meeting this quarter from Northam to Toodyay, to be in town on Thursday February 4th as a show of solidarity for locals,” Mr Bourke said

Mr Bourke said that along with REIWA’s CEO Anne Arnold, he was looking forward to catching up with Avon valley agents at the breakfast meeting and was keen to hear from Bob Adair about how the tool library was coming along.

“Apart from the institute itself, REIWA members have also individually pledged a further $5,400 towards the appeal and this additional money will be directed to Men's Shed shortly,” Mr Bourke said.

Mr Bourke expressed his thanks to local agents Michael Watts, Tony Maddox and John Butler for helping REIWA to get involved in the bushfire appeal.

“It’s always nice to be able to give something back to the community,” he said.

Article added by: Communications

Derived from REIWA.

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