Reserve Bank leave rates unchanged.

At its meeting today, the Board decided to leave the cash rate unchanged at 4.25 per cent.

From the RBA Media Release Statement.

If you have any questions please don't hesitate to call us on 47236000.

Building Boost grant Extended.

The Queensland Government has announced a three month extension to its Building Boost Grant, up until 30th Aplril 2012.

The scheme offers a $10,000 non-means tested grant to Queenslanders who are buying or building new homes or units priced at less than $600,000.

As of 11 Jan, only 3728 of the 14,000 grant applications had been awarded.

Applications were due to close at the end of this month.

Interest Rate Cut now shared by all...... Yay!

Further to my thoughts below, the banks have now passed on the most recent RBA cut of 0.25%. Hopefully no-one took Wayne's advice, they would have refinanced for absolutely nothing (but may have cost them a lot).

Watch this space....

Will the banks pass on the rate drop?

Will the banks pass on the rate drop????

This is more than a fair question, we do see and hear a lot about this in the media, but like anything that we hear (i.e. believe none of what you hear, and believe half of what you see :) ), we need to take a balanced approach. I imagine the bank will make this decision in good time, but irrespective of their decision, we will see them as the well-established, profit making machines that they are (unashamedly so). This should not be news, but they are publicly listed companies, looking to make money, not friends (contrary to their advertising campaigns J).

What is not helpful to the mortgage industry or your home loans as a whole, is the most recent banter from the Treasurer Wayne Swan. As he has been many times before, he is disturbingly simplistic and misinformed on this topic. He has been claiming all day that if you are not happy with the rates with the four majors at around 7.5% or so, you should move to one of the other banks that have already dropped their rates.

Firstly, OMG, if you are still on a Standard Variable rate (SVR), without a discount of some description CALL ME IMMEDIATLEY!!! Most people (with good guidance) should never be paying the SVR, that is they should be receiving a discount below it, or be on a ‘Basic Variable’ (lower rate, with slightly lesser features).

I have said it many times before, but a simplistic approach to banking and the approach taken to refinancing (for the sake of refinancing as Wayne is suggesting) is VERY RARELY in the clients’ best interest (which should be the sole purpose for any move). You are not changing underpants here…. you are restructuring a major financial commitment and the associated fees and charges are MORE OFTEN THAN NOT, higher than the ‘simplistically suggested, knee jerk’  gain claimed.

If Wayne Swan wants to have an actual effect on the true ways of getting better pricing for clients, we should be looking to better competition, rather than hit the media with misguided and ill- informed sound bites for political gain, with no gain for the customer. Perhaps (with the risk of talking about spilt milk) had he not made ill-informed moves around two to three years ago in other knee jerked reactions with deposit guarantees (for the BIG FOUR ONLY MIND YOU!!), we would not be in the position we are in now (more than happy to explain if you would like to chat..).

I do not often rave on about this style of information, but I feel it is imperative that the main reason for a move between banks not be a politically fuelled ‘brain fart’ based sound bite, but rather a well-informed, individually client based decision making process.

As always, happy to chat….

Reserve Bank Drops Interest Rate

At its meeting today, the Board decided to lower the cash rate to 4.25 per cent, effective 7 December 2011.

The reduction in the cash rate as a result of the Board's previous decision flowed through to lending rates, which are now around their average level of the past 15 years. Short-term market interest rates have tended to decline a little further in recent weeks, though term funding conditions for financial institutions have become more difficult. Credit growth remains subdued and asset prices have declined further over recent months. The exchange rate has been quite variable over the past few months, but remains at an historically high level.

Overall, the Board concluded, on the basis of all the available information, that the inflation outlook afforded scope for a modest reduction in the cash rate. The Board will continue to set policy as needed to foster sustainable growth and low inflation over time.

Please contact Dave Lamari if you would like him to answer any questions you may have for him. Ph 47236000.

From the RBA Media Release Statement.

Q and A about the RBA. Just for your information. :-)

1. What is the Reserve Bank of Australia and who owns it?

The Reserve Bank of Australia is Australia's central bank. Its role is set out in the Reserve Bank Act 1959. The Bank conducts the nation's monetary policy and issues its currency. It seeks to foster financial system stability and promotes the safety and efficiency of the payments system. It also offers banking services to government. The Bank is wholly owned by the Australian Government, but is not a government department. For more information see about the RBA.

2. How does the Reserve Bank set interest rates?

The Reserve Bank Board makes monetary policy decisions in terms of the cash rate – the interest rate on overnight loans in the money market. These decisions affect a range of other market and institutional interest rates. For details see about monetary policy.

3. Who is on the Reserve Bank Board and how are they appointed?

The Reserve Bank Board has up to nine members. Three of these are ex officio: the Reserve Bank Governor (Chairman), the Deputy Governor (Deputy Chairman) and the Secretary to the Treasury. The Governor and Deputy Governor are appointed by the Treasurer for terms of up to seven years. The other six (non-executive) members are appointed for terms of up to five years. Board members are appointed by the Treasurer and there is no limit on the number of terms they may serve. See Reserve Bank Board for more information, including details on current and previous members of the Board.

4. Can I open a bank account with the Reserve Bank?

The Reserve Bank is not a commercial bank and so does not provide banking facilities to the general public. It does, however, provide banking services to some government, commercial bank and other clients.

5. What if I have a concern or complaint about my bank or similar financial institution?

The Reserve Bank does not supervise the prudential soundness of banks or other financial institutions, though it does have a role in maintaining the stability of the financial system as a whole.

The Australian Prudential Regulation Authority (APRA) is responsible for prudential supervision of financial institutions.

The Reserve Bank also does not handle consumer complaints about financial institutions. Such matters should be addressed to the Australian Securities and Investments Commission (ASIC) or the Financial Ombudsman Service.

Taken from the RBA website.

Reserve Bank Drops Interest Rate.

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 4.5 per cent, effective 2 November 2011.

Financial conditions have been easing somewhat recently, with market interest rates declining a little and competition to lend increasing. But overall conditions have remained tighter than normal, with borrowing rates still a little higher than average, credit growth subdued and asset prices lower than earlier in the year. The exchange rate has been very variable over the past few months, but on the whole has remained at historically high levels.

Over the past year, the Board has maintained a mildly restrictive stance of monetary policy, in view of its concerns about inflation. With overall growth moderate, inflation now likely to be close to target and confidence subdued outside the resources sector, the Board concluded that a more neutral stance of monetary policy would now be consistent with achieving sustainable growth and 2–3 per cent inflation over time.

From the RBA media release statement.

Real Estate Jargon :-D

Buying a House????

Glossary of Terms - What They Really Mean

Spacious - average

Charming - small

Comfortable - very small

Cozy - very, very small

Low maintenance - no lawn

Walk to stores - nowhere to park your car

Prestgious - expensive

Bright and sunny - venetian blinds not included

Modern - 30 to 40 years old

Contemporary - at least 15 years old

Sprawling ranch - inefficient floor plan

Natural setting - forget about planting, the fauna will eat everything

Secluded setting - far away

Executive neighborhood - high taxes

Park-like setting - a tree on the block

Unaffected charm - needs painting

Starter home - run down

Hurry! Won't last - about to collapse

RBA Rates Meeting.

At its meeting today, the Reserve Bank of Australia decided to leave the cash rate unchanged at 4.75 per cent.

The Board noted that financial conditions have been easing somewhat, with interest rates for some housing and business loans declining slightly due to increased competition and the fall in some funding costs in financial markets. The exchange rate has also declined from the very high levels of a few months ago. Credit growth remains low, however, and asset prices have declined.

At today's meeting the Board judged the current cash rate remained appropriate. As always, the Board will continue to assess carefully the evolving outlook for growth and inflation.

 From the RBA Media Release 04/11/2011 .

Warm and Fuzzy...

What is Home?

A roof to keep out the rain. Four walls to keep out the wind. Floors to keep out the cold. Yes, but home is more than that. It is the laugh of a baby, the song of a mother, the strength of a father. Warmth of living hearts, light from happy eyes, kindness, loyalty, comradeship.

Home is first school for young ones, where they learn what is right, what is good and what is kind. Where they go for comfort when they are hurt or sick.

Where joy is shared and sorrow eased. Where fathers and mothers are respected and loved. Where children are wanted. Where the simplest food is good enough for kings because it is earned. Where money is not so important as loving-kindness. Where even the teakettle sings from happiness. That is home.

Ernestine Schumann-Heink