IN THIS ISSUE:

Federal budget targets housing affordability
Renovation on the rise
State by State News
Interest Rate Watch
Q&A: Mortgage stress and how to avoid it

Charity Profile:
Bravehearts

Bravehearts aims to forge a 'movement for change' in how pedophilia is dealt with by the criminal justice sector, government and the community at large and to provide survivors with a voice.

Bravehearts provides comprehensive counselling for child and adult survivors of child sexual assault, and is actively involved in education, prevention, early intervention and research.

For more information about Bravehearts' work in the community or to find out how you can assist visit:
www.bravehearts.org.au

Customer Profile: couple's mortgage check reveals error

A Sydney couple has learnt the importance of double-checking mortgage details, with a little help from their Smartline Personal Mortgage Adviser, Bob McFarlane.

Annette Arkell and Richard Warburton refinanced their mortgage to an interest-only product with a major bank in 2005, but it wasn’t until they asked Bob to assess their home loan again in 2008 that they realised they had been paying more than they should have.

The minute Annette told Bob the interest rate they were currently paying he knew there was something wrong, so he investigated and discovered the bank had been charging them an additional 0.6 per cent interest per annum.

"That equated to $8,400 over the three years since they refinanced – which is a significant amount of money for anyone," said Bob.

He also assessed the couple's options to refinance - however determined their existing mortgage still suited their situation.

“If it wasn't for Bob we wouldn't have known about the mistake. We are now being charged the correct interest rate and we can rest assured we have the most suitable loan for our needs, ” Annette said.

Interest Rates: click here

State-by-State News

QUEENSLAND: Home buyers swift in Brisbane market

NEW SOUTH WALES: Time is ripe for long-term investment

SOUTH AUSTRALIA : Adelaide outperforms other capitals

VICTORIA: Budget delivers boost for first-home buyers

WESTERN AUSTRALIA: Budget tax cuts welcomed by property industry

Welcome to the Winter issue of Newsline and the second edition of this newsletter for 2008.

The Rudd Government delivered its first federal budget in May with a number of initiatives to address housing affordability, including assistance for first home buyers, as detailed in this issue of Newsline.

Tax cuts were also delivered, which will go some way in offsetting the rising cost of petrol and groceries.

After two rates rises in February and March of this year, the Reserve Bank has adopted a "wait and see" approach to see if further rate increases are required to bring inflation down. Analysts and industry experts are widely divided on what happens from here, with a number of experts forecasting one or two more rate rises later this year before rates start to come down over 2009.

Also in this issue, Victorian and Western Australian governments have delivered some relief for home buyers in their state budgets, while Brisbane houses are selling quickly; inner Sydney apartments are set to take off; and Adelaide property has out-performed other capitals.

We also explore the term ‘mortgage stress’ in our Q & A column.

I hope you enjoy this quarter's Newsline.

Chris Acret
Director

Federal budget targets housing affordability

The Rudd Government's first budget has delivered $2.2 billion in initiatives to help ease housing affordability, and has been welcomed by the property industry.

Initial plans for a First Home Savers Account have been slightly varied with the government to make contributions of 17 per cent for the first $5000 deposited each year.

The account, which can be opened with no minimum balance, will be taxed at a rate of 15 per cent and withdrawals will be tax-free if the funds are used to buy or build a first home.

Q&A
With Vicki Monteleone

Q: I've been hearing the term 'mortgage stress' quite a bit lately. What is it and how can I avoid it?

A – There has been a lot of discussion recently about the number of people suffering from mortgage stress due to interest rate increases, leading to Australia's highest interest rates in 12 years.

Mortgage stress is normally defined as spending more than 30 per cent of household income on mortgage repayments, but anyone encountering problems meeting their mortgage repayments and other financial commitments is experiencing some level of mortgage stress.

Interest rate increases are one factor which can contribute to mortgage stress, but other reasons include illness or injury, job loss or a pay cut – basically anything which leads to a reduction in household income.

Renovation on the rise

While the number of people choosing to build a new home is decreasing, many families are recognising the advantages of renovating an established home.

According to the Housing Industry of Australia’s National Outlook March 2008 quarter report, the national new home building cycle is unlikely to turn up until 2009/10.

However, HIA Chief Economist, Harley Dale, said this was helping buoy real estate prices.

"The lack of new housing supply is driving up rents and is holding up real estate prices for existing housing stock," he said.

Mortgage Glossary

Caveat: Notification placed on a Title to warn any purchaser that someone else holds an interest in the property. This ensures it is not sold without the consent of this third party.

Home equity loan: line of credit, where you have a designated credit limit but have flexibility with the repayments.

Valuation: Report arranged by the lender to ascertain the value of your property.