Australian Mortgage and Loan Information

Check your statements be careful with your id.

Internet Banking is an important tool for most home mortgage holders. You can keep track of your payments, withdawals and loan limits easily with just a click from your mouse, however with the growing band of online pirates targeting Australian Banks, online banking is getting very risky.

Along with the United Kingdom, Germany, Spain and the United States., Australia is one of the most targeted countries for identity theft in the world. The pirates are getting more numerous and more brazen by the minute, so please don’t think you are immune.

I recently became a victim of these pirates. Their scheme was simple: a pop up informed me I had malware and that for X dollars I could remove it and at the same time upgrade my current anti virus software for a discount price. I was sucked in as all the icons and info mirrored my current security provider. The Trojan program installed itself and made ready to steal my financial and identity information. Luckily I realised my error in a short space of time and was able to cancel the transaction and remove the malware.

A study conducted by AusCERT earlier this year found about one in six Australian home computers is compromised by malware. AusCERT stands for Australian Computer Emergency Response Team. The general manager of AusCERT Mr Graham Ingram stated recently: “Where once a web user had to click a web or email link to become infected, now a visit to a trusted site could deliver what is known as a “drive-by download”. “Their target I your personal data. The ability to impersonate someone gives thieves access to bank accounts and corporate secrets that can be used to even manipulate share prices.”

I don’t condone giving into the pirates, the convenience of internet banking is worth to much. All I can suggest is that you are vigilant and make sure you have a reputable anti virus like Norton 360 or
Pc-cillin and check your statements regularly for errors as well as for fraudulent transactions,

Is this the start of a trend?

Maybe Australia is not as insulated from the world wide property bubble as we would like to think?

A Second consecutive quarterly fall in the Established House Price index may well be the precursor for more dramatic falls in 2009, despite the Federal Governments interest rate cuts and First Home Owner Boosts.

The Australian Bureau of Statistics provides quarterly estimates of changes in housing prices in each of the eight capital cities of Australia.

The information is presented in the form of price indexes and is published quarterly.

The following is an exert from the ABS July to September 2008 quarter paper released 3rd November 2008.

“SEPTEMBER KEY POINTS

ESTABLISHED HOUSE PRICES

Quarterly Changes
Preliminary estimates show the price index for established houses for the weighted average of the eight capital cities decreased 1.8% in the September quarter 2008.

The capital city indexes fell this quarter in Brisbane (-3.3%), Canberra (-2.5%), Melbourne (-1.9%), Sydney (-1.8%), Perth (-1.1%), and Adelaide (-0.1%), and rose in Hobart (+0.7%), and Darwin (+0.1%).

The movement in the preliminary established house price index between March and June quarters 2008 has been revised from an estimated decrease of 0.3% to a decrease of 0.2%.

ANNUAL CHANGES (SEPTEMBER QUARTER 2007 TO SEPTEMBER QUARTER 2008)

Over the year to September quarter 2008, preliminary estimates show that the price index for established houses for the weighted average of the eight capital cities rose 2.8%.

Annually, house prices rose in Adelaide (+9.7%), Melbourne (+8.1%), Darwin (+6.4%), Brisbane (+5.6%), and Hobart (+2.4%), showed no change in Canberra (0.0%), and fell in Perth (-4.1%), and Sydney (-0.4%).

The movement in the preliminary established house price index between June quarters 2007 and 2008 has been revised from an estimated increase of 8.2% to an increase of 8.6%.”

This information is generally hidden away and scantly reported by the popular media. I find it interesting as it contradicts the reports by most media outlets. The information is useful If you are buying an established house.



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Time for a back flip!

In my previous blog I intimated there was a shortage of quality property in Australia. I stand by this statement. I also said that stamp duty was not a major cause of the property bubble. Well on reflection, the statement about stamp duty was off the mark. Stamp duty and other government charges have led to a reluctance of certain citizens of our great land to move to smaller or more practical dwellings. Maintaining a huge property is hard work and expensive, yet many prefer this to forking out mega bucks for stamp duty and other fees. This reluctance has led to short supply in most areas near popular schools and infrastructure.

How do we solve this problem? I think the only way is to promote subdivision.

As I have previously endorsed, the ability to subdivide the land that your house occupies and build two or more townhouses is the ultimate value in property investing. You can’t subdivide a flat or unit generally.

Tax breaks for principle place of residence owner developers is the answer. Allow them to roll the profits into their super tax free. Allow it as a once off per person in their life time. Makes more sense than the first home owners grant, creates some liquidity in the market and it may give the Government some savings on pensions etc. We all know an elderly lady who has lost her husband but still lives in the grand mansion and gets a pension don’t we? Why not help her into a better equipped, up to date townhouse that is virtually maintenance free?

Demolish, subdivide and build! That’s my motto.

$53 billion from stamp duty?

Talk about making money out of misery! The world wide housing price bubble is the source of all the recent financial turmoil, threatening our very way of life. Yet State and Territory governments across Australia have raised $53 billion from stamp duty on property purchases for both residential and commercial property over the past five years according to report just released by Bankwest.

Like many I have felt the pain of State Government fees such as mortgage stamp duty, title transfer fee and property stamp duty. You cannot avoid them, they are just a part of doing business in Australia. However, was not the GST going to lead to abolishment of all these State Government taxes and charges? The recent First Home Owners Boost is really just a transfer of funds from Federal to State Government coffers, as it mainly goes to pay the stamp duty!

As expensive as stamp duty is, I do not think it is a contributor to the housing price bubble as it is called by the popular press. The main reason is without doubt the easing of home loan mortgage lending criteria. In fact the easing of lending criteria full stop. The lender’s have let loose a wave of credit fuelled consumer demand on a limited finite resource of desirable property. The result: State Governments with fat budget surplus to waste and home ownership out of reach for future generations. At least interest rates are coming down!

Why not spend some of this money creating jobs in manufacturing or environmental salvage? My local engineering works and the Murray river could do with some help.

Don’t forget to take stamp duty and other government fees into account when you do your home loan calculations.