IN THIS ISSUE:

Labor Victory: What it Means for Property Owners
Quarterly Trends report: Big Banks Gain Favour
Mortgage Management: The Key to Affordability
Case Study: Investor Looks Interstate for Best Return
Charity Profile
Mortgage Glossary
State by State News
Interest Rate Watch
Q&A: Professional Pack Home Loans

Charity Profile:
The Children's Leukemia and Cancer Society

The Children's Leukemia and Cancer Society was formed in 1975 by a group of parents with children undergoing cancer treatment. Originally based at the Royal Children's Hospital in Brisbane, it has since expanded to a membership of people from all over Australia.

Smartline's on-going donations assist the Society in a range of programs and services for families with children being treated for cancer.

For every home loan Smartline arranges, it makes a donation to various children's charities including the Children's Leukaemia and Cancer Society. To date, Smartline has donated well over $250,000 to a number of worthy charities.

Customer Profile: Investor Looks Interstate for Best Return

A realistic purchase price coupled with the potential for high rental returns lured Sydneysider Martin Perelman to take the plunge and purchase his first home in Adelaide.

Originally from South Australia, Martin was familiar with the Adelaide property market and having done his research, decided the time was right to invest in it.

"For me, Adelaide offered more value for money. By investing there rather than in Sydney, I could afford to purchase a property close to the city and feel confident that I would achieve a good rental return with less risk of vacancy – all without the burden of a huge mortgage," Martin said.

Having made his decision, Martin spoke to Smartline’s Wayne Dive to ensure he had access to a complete range of lenders and products.

"Being my first property investment, the advice and knowledge that a broker can provide is invaluable. With Smartline I also had a choice from over 30 top lenders," Martin said.

Smartline arranged Martin a "Split Loan" through St George Bank offering him the flexibility of a combined fixed and variable rate. The ability to reduce the loan with additional payments allowed him to increase equity and move forward with another purchase.

Martin is now enjoying the returns of his first investment property and plans to add to his portfolio in the future.

Interest Rates: click here

State-by-State News

QUEENSLAND:

NEW SOUTH WALES:

SOUTH AUSTRALIA :

VICTORIA:

WESTERN AUSTRALIA:

Welcome to the Summer issue of Newsline and the final edition for 2007.

It has been a busy end to the year for the Australian property market.

In the previous issue of Newsline, we discussed the impact of the US sub-prime mortgage crisis on the Australian mortgage market and the attitudes of consumers towards big banks versus niche lenders.

This quarter the impacts of the events in the US sub-prime market continued to flow through to Australia, with the highest profile impact being that of RAMS being bought out by Westpac.

The past quarter also saw one interest rate increase, bringing the current rate to 8.57%. Homeowners are now repaying an average of $1934.70 per month on their home loans (based on a $250,000 loan).

And signaling a new era in Australian federal politics, Labor Party leader Kevin Rudd was elected as the new Prime Minister of Australia – ending John Howard’s 11-year reign.

In this issue of Newsline, we discuss the impact of these events on Australian home-owners and reveal findings from our latest Quarterly Trends Report. We also investigate the issue of affordability and look at how home loan products can help to combat declining affordability.

I hope you enjoy this quarter’s Newsline and wish you a safe and enjoyable Christmas season.

Chris Acret
Managing Director, Smartline

Labor Victory: What it Means for Property Owners

On 24 November 2007, Australian Labor leader Kevin Rudd was elected as the Prime Minister of Australia – ending the Coalition’s 11-year reign under John Howard.

During the election campaign, Mr Rudd outlined a series of initiatives the Labor government would implement to address housing affordability.

Mortgage Management: The Key to Affordability

The recent federal election has put the issue of housing affordability on the political agenda, and into the media spotlight, like never before. It is not uncommon to see reports of an 'affordability crises', suggesting Australians are being priced out of the market.

Recent figures from the Housing Industry Association together with The Commonwealth Bank revealed first home-buyers now require a household income of more than $100,000 to qualify for a loan on a median-priced home – up from $80,000 just two years ago.

Market Report: ‘Big 4’ Banks Capitalise on Market Uncertainty

Following the emerging crisis in the US subprime mortgage market, Australians are turning to the perceived security of the Big 4 banks for their home loans, according to Smartline’s latest September Quarterly Trends Report.

Each quarter, Smartline sets out to review trends in the mortgage market through its Quarterly Trends Report - capturing information from Smartline’s 145 franchise operators across Australia.

According to the report, 'Big 4' banks aggressively recaptured market share in September, accounting for 67 per cent of all new loans generated by Smartline during the month.

Top Tips: Selecting Good Tenants

For property investors, selecting and retaining reliable tenants can be the key to a profitable investment – and with demand for rental property across the country continuing to grow, it is as important as ever for investors to sort the good tenants from the bad.

Here, we share some tips on how to do just that.

Q&A

With Vicki Monteleone

National Lending Support Manager, Smartline

Q: 'What are the main benefits and requirements for self-employed borrowers applying for a low-doc loan?'

Mortgage Glossary

Option: a legal method whereby a purchaser may reserve a property for a period of time under mutually agreed terms. This sometimes includes financial penalties, so discuss your options with your Smartline broker before entering into any option arrangement.

Private treaty sale: where a real-estate agent finds a buyer without putting the property up for auction. A price is set and prospective purchasers can submit offers that are usually below the asking price.

REI contract: standardised 'plain English' contract used as the basis
for home and land transactions. The contract can be amended with special clauses to suit the buyers and purchaser.