Thursday, February 24, 2011

Latest Property News from Ted Hanson

Friday 25 February 2011
Please be seated

Even though this style never goes out of living room fashion, it is always evolving. There is at present an overlap of looks under the one umbrella - a little Palm Beach swank mixed with Hamptons country club and a dash of Southern Highlands grandeur are all part of the mix.

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New homes to rebound

The current drop in demand for new houses should begin to turn around in the middle of this year, industry analyst and economic forecaster BIS Shrapnel announced this week.

BIS Shrapnel's latest Building Industry Prospects report shows the total number of new dwelling approvals is expected to rise eight per cent to 177,000 in 20011/12 - the highest level since 2003 3/04.

New house approvals in the same period are forecast to rise 10 per cent nationally.

The increase in first-home buyer demand from the Federal Government's First Home Owner's Grant
Boost Scheme, together with various State Government incentives for new dwellings, resulted in new house approvals rising by 22 per cent in 2009/110.

Angie Zigomanis, Senior Manager, Building and Construction, BIS Shrapnel noted however that these incentives only served to pull forward existing demand, with first-home buyers who would have otherwise been in the market in 2010 entering the market in 2009 to take advantage of the increased incentives before they expired.

"As a result, there was a drop off in first-home buyers in 2010, which has been evident by the decline in new house approvals through the second half of last year", Mr Zigomanis said.

The number of loans approved for first-home buyers nationally by the middle of 2010 was nearly 60 per cent below the same (albeit elevated) period in 2009. With first-home buyer demand well down, upgrader demand for new dwellings also eased as fewer potential buyers were in the market for their existing properties.

As a result, BIS Shrapnel is forecasting new house approvals to record a decline of 11 per cent in 2010/11. However, strong investor demand is driving further growth of 26 per cent in other dwelling approvals (private medium and high density dwellings).

Meanwhile, public sector dwelling approvals will decline by 51 per cent to only 7,500 over 2010/11 as the government stimulus comes to an end. Overall, total dwelling approvals are forecast to fall by four per cent to164, 000.

"With the lower level of construction since the Global Financial Crisis, supply has fallen further behind underlying demand, and there is a rising deficiency of dwelling stock," said Zigomanis.

"At the same time, there is evidence that the drop off of first-home buyers has now bottomed out.

"The latest data for the month of December 2010 indicates that the number of first-home buyers improved to a decline of 29 per cent on the previous year, while the actual number of loans given to first-home buyers was also the highest level since December 2009", he added.

BIS Shrapnel says the improvement in first-home buyer activity should continue through 2011 as the post-Boost Scheme decline in first-home buyers is played out and numbers slowly recover back to long term levels by the second half of the year.

Together with the pent up demand from the deficiency of dwelling stock, and an environment where economic growth is picking up and interest rates are stable over the next six months, demand for new houses will subsequently increase as upgraders also take advantage of the stronger demand for their existing dwellings and trade up to a new house.

Home on the free range

Fancy some delicious fresh eggs produced by chooks that live in your backyard and cleaned up your vegetable scraps from yesterday's meal?

No longer is it necessary to live on a farm in the country to know where some of your food comes from, with the advent of chook-hiring businesses such as Rent-a-Chook and City Chicks.

As long as you have a backyard, all you need is the coop and chickens, which the firms will supply for rent or to buy. If you rent, they will also replace any hen that has stopped laying with a `layer'.

Apart from the obvious benefit of being able to collect your `farm-fresh' eggs every day, you will soon find that the chickens eat all your kitchen scraps and leftover take-away dinners, remove weeds from your garden and regularly turn over the compost heap for you.

Rent-a-Chook and City Chicks are based in Sydney and Brisbane respectively, but Rent-a-Chook will deliver the coop in a flat-pack to anywhere in Australia and help you find a local supplier of chickens and feed.

Fixed rate demand steadies

Concerns about rising interest rates seem to have settled, according to new data showing the demand for fixed rate home loans slowed again in January.

The figures, released this week by mortgage broker Mortgage Choice, show that 15.3 per cent of the home loans approved for its customers in January had a fixed interest rate.

This is on a par with the December 2010 figures (15.2 per cent) after three consecutive rises in the previous months (11.2 per cent in November, 7.7 per cent in October and 3.7 per cent in September).

Uptake increased for the fourth consecutive month in the majority of states, by an average of 2.2 percentage points, but dropped in QLD and WA, by 2.9 and 2.8 percentage points respectively.

Mortgage Choice company spokesperson Kristy Sheppard remarked that Australians' appetite for fixed rate home loans has risen consistently over the past six months, but that pace slowed right down in January.

"One has to question whether the demand for this more conservative loan type has steadied now it looks likely that the next cash rate rise has been pushed back to mid-year or later", Ms Sheppard said.

"Of all the mortgage types, ongoing discount loans - where the interest rate is discounted over the entire loan term usually in return for an annual fee - experienced the biggest increase in demand.

"They accounted for 25.3 per cent of our January approvals, having risen 8.4 percentage points in the last two months."

Notwithstanding this trend standard variable rate home loans continue to be the favourite, at 30.7 per cent of approvals, followed by the ongoing discount loan category, which overtook basic variable loans at 23.6 per cent of approvals to hit second spot.

Demand for line of credit home loans (often popular with investors) dropped a little to 4.8 per cent of approvals from 5.4 per cent the month prior while introductory rate home loans accounted for only 0.2 per cent.

Renovate for reward

Renovating a property to increase its value can backfire if the renovation is poorly planned or executed, Archicentre said this week.

The warning comes at a time when the $20 billion renovation industry is set to play an extended role in the Australian building industry, with people choosing to invest the $50,000 to $60,000 it costs to move in renovating their homes and staying put.

Edward Lukac, spokesperson for Archicentre South Australia said that many people invest in property to secure their financial future without a planned strategy or any idea of the cost of renovating their home or investment property.

Lukac cited the example of baby boomers purchasing homes to renovate and live in with a view to gaining capital on their resale when they move to smaller or assisted accommodation in their later years.

"For this group of renovators the success of the renovation can have a major impact on their financial future", he said.

"People actually devalue their investments with poorly conceived designs or inappropriate materials, providing a negative cash flow for the investments and poor re-selling options."

Some of the worst examples Archicentre consultants have reported include:

- period houses with poorly-designed flat roof extensions
- houses painted in garish colours
- money poured into expensive bathroom and kitchen fittings at the expense of light and space.

Lukac said that another costly mistake is to inadvertently change the house from one market segment to another.

"For example converting the third bedroom of a three-bedroom house into a walk-in robe and ensuite will change the house from a three bedroom house to a two bedroom one with a drop in value of possibly $100,000 after spending perhaps $40,000 on the project", he said.

"The renovation decisions people make today will certainly impact on the resale value of their property and the extent of their retirement funds in the future".

"The basics of planning and costing the renovation to work within an available budget, combined with a clear understanding of how to tender the work out and manage the renovation project, is fundamental to the success of any renovation."

Mr. Lukac said that a well planned and executed renovation or extension could see the owners recoup their investment and a greatly enhanced lifestyle while concurrently enjoying the benefits of a greatly improved home for a long-term future.

Some tips for renovating a property for maximum return include:

# Purchasing a property that is structurally sound.
# Assessing the financial potential with a design and cost analysis before purchase.
# Ensuring a well-designed, accurately costed Feasibility Study is prepared before committing to the project
# Checking the planning regulations to avoid costly planning appeals.
# Ensuring the design, finishes and fittings do not over-capitalise the property.
# Utilising design to deliver lifestyle requirements in demand by the market.
# Creating a design where additions are compatible with the existing structure.
# Obtaining competitive building or sub contract prices

A free Cost Guide for Renovators is available for download from the Archicentre website.

San Andreas vault

Building anything around a fault line is risky business. While the potential of a shift that consumes your home isn't by any means appealing, the same basic concept has still found its way into homes.

Made from oak wood, the San Andreas Coffee Table was inspired by the 1100km long crack in the Earth's crust in California. A visible crack line in the centre of the table allows the two ends to pull apart, revealing a hidden storage space inside.

Take your best shot

One of first things a prospective buyer will see of your house is photos, so it is a good idea to take the time and effort to ensure it is shown off to best advantage. They should be clear, well-presented and make your house look instantly attractive.

Good photos need a little preparation, so first take a walk around the house and choose the right angle to present its best features. Clear away any clutter and add a few accessories such as a vase of flowers (or a bowl of fruit in the kitchen).

If there is a view from one of the windows, or a garden area beyond glass doors, include it as part of the room, if possible. Frame it using the fittings (open the curtains wide) and by angling the furniture so that the eye is led beyond the room. Have a professional take the photos and be prepared to repeat the exercise a few times before you get them right.

Thursday, February 17, 2011

Latest Property News from Ted Hanson

Friday 18 February 2011
She's done it again!

Our wonderfully gifted Marie Kay has been awarded NSW Sports Federation's Masters Athlete of the year in a HUGE award celebration last night at Homebush. This combines with her two international Masters Athlete of the Year awards from last year. We are VERY proud of our Marie!

Home lending improves

Home lending continues to improve, according to data released this week by the Australian Bureau of Statistics (ABS).

The ABS figures show that, seasonally adjusted, the total value of dwelling finance commitments excluding alterations and additions rose 2.5 per cent in December 2010. This is the fourth month in a row that the value of loans for housing has lifted.

Both the number and value of commitments rose in December in all major categories except for the purchase of new dwellings, which dropped 10.1 per cent.

Loans for owner-occupied housing rose 2.3 per cent, while investment housing - fixed loans rose 3 per cent. Loans for the construction of dwellings increased by 1 per cent.

The number of first home buyer loans rose to 8,586 in December; the highest figure for that sector in nine months. First homebuyers accounted for 15.8 per cent of owner occupied housing finance commitments for December 2010, up from 15.6 per cent in November and 15.4 per cent in October (in original terms).

In seasonally adjusted terms, in December 2010 the total number of owner occupier loans increased by 4.8 per cent in New South Wales, 3.3 per cent in Victoria, 2 per cent in Queensland, 0.3 per cent in South Australia, 0.9 per cent in Western Australia, 4.8 per cent in Tasmania, 1 per cent in the Northern Territory and 2.1 per cent in the Australian Capital Territory.

Let's go dutch

A new scheme modelled on the service used in the Netherlands could potentially see 100,000 consumers change banks each year, consumer advocacy group Choice said this week.

Giving evidence to the Senate Inquiry into banking competition, which this week held public hearings in Canberra, Choice said that only 2,541 borrowers currently use the bank-run switching scheme in Australia.

Not because we don't want to, though. Choice also revealed that its 'Compare, Ditch and Switch' website helped 50,000 people find a better bank deal in December 2010 alone - its first month of operation.

But the people's watchdog says despite more people actively seeking to change, it continues to be much too tough for them to do so.

"More than ever before Australians are seeking to switch banks but time and time again they tell us the task is simply too time consuming and too frustrating to complete the process," Choice's Better Banking campaign director Richard Lloyd remarked this week.

The campaign's research* has shown that by switching accounts from the big four banks to other providers, mortgage holders can save up to $2,500 a year, credit card holders up to $425 a year and those with standard savings accounts up to $330 a year.

"Switching is the key to driving competition in banking but right now all the costs of changing banks are carried by consumers and businesses", Mr Lloyd said.

"The amount of traffic to our site shows people want to switch now - not in five years time."

Choice and the Council of Small Businesses of Australia (COSBOA) have written to the banking industry asking them to stop blocking portable account numbers, and whilst the Senate Inquiry into banking continues, help their customers to switch by implementing the Dutch-style system now.

The Dutch switching system is a single-form, one-step process that requires the customer's new bank and old bank to transfer direct debits automatically.

Choice says portable account numbers would cut the cost of switching and improve consumer confidence in moving between providers.

"In a week when banks are once again reporting record breaking profits, it's time for them to put some money back into providing their customers with better service - a Dutch-style switching system would be a big step towards that," says Richard.

* The potential savings from switching have been calculated by Mozo by comparing the yearly cost of the worst big four products for savings accounts and credit cards, and the yearly cost of the average standard variable rate big four home loans, with the best cost alternative on the market today. Costs include interest rates and fees (correct as at 25 January 2011).

Clean up, Australia

Cleaning up Australia has perhaps never been more important, after the devastating storms and floods of the past few months, Ian Kiernan AO announced this month.

As the annual Clean Up Day approaches, the Chairman and founder of Clean Up Australia was recently in Ballarat, calling on communities to come together on 6 March by focusing on flood-affected areas.

"The first priority after a flood is your own backyard", Mr Kiernan noted, applauding the aid provided by local government and state authorities.

"But as the waters recede, the cameras disappear and the focus of those of us not directly affected wanes, it will be left to the locals to work on the parks, bushland, rivers and creeks where flood debris has accumulated."

Mr Kiernan acknowledged that Clean Up Australia Day would not be possible without the amazing volunteers working to clean up their own local areas.

Kiernan noted that last year's Rubbish Report surveys showed us that disposable items increased by 6 per cent in 2010.

"This is unacceptable, and we need to take action to protect the areas that are being degraded the most - our parks and waterways."

The 2010 Rubbish Report revealed that while cigarette butts were the single item most commonly found, plastic remained the predominant form of rubbish across Australia for the 16th year in a row. Its long-lasting persistence (plastic bags can last up to 450 years in salt water) makes plastic one of the most destructive forms of waste in Australia.
Other findings included:

- Small paper pieces jumped up to second place in 2010 - up from seventh in 2009.
- In 2010 aluminium cans fell from third to ninth place.
- Six of the top ten items were related to beverage containers including plastic and metal bottle caps and glass pieces.
- Beverage container related items made up 23.6 per cent of all waste items.
- Seven out of the top ten items were recyclable, while nine of the top ten items related to packaging in some way.

In 2010 an estimated 588,000 volunteers removed around 15,560 tonnes of rubbish from 7,073 registered Clean Up sites, making the 20th Clean Up Australia Day the largest community participation event in the country.

Borrowers prepared

This week's housing finance statistics appear to back up a recent survey that shows borrowers to be confident they can weather interest rates in 2011.

QBE LMI's December 2010 Mortgage Opinion Survey of over 1000 professionals in the mortgage industry including banks, non banks, brokers and mortgage managers found that over 80 per cent of survey respondents believe mortgage holders are prepared for future interest rate rises.

A large proportion of these respondents, over 34 per cent, feel that mortgage holders could accommodate rate rises ranging from 0.5 to 1 per cent and over 11 per cent feel a rate rise from 1.0 to 1.5 per cent is manageable.

Ian Graham, CEO of QBE LMI said that the results indicate that mortgage holders have become more cautious about borrowing and are being fairly careful with their finances to prepare for expected future interest rate rises.

"The survey results indicate a stable outlook for consumer confidence, with 41 per cent of respondents suggesting a slight improvement in 2011 and 2 per cent expecting a significant increase. 23 per cent expect no change and 31 per cent expect consumer confidence to decrease slightly", said Mr Graham.

He added that while the recent natural disasters across the nation including the Queensland, Victorian and Northern New South Wales Floods are likely to have some impact on consumer confidence in the short term, that will turn around with the economic activity flowing from the recovery effort.

The survey feedback suggests variable rate home loans will continue to be preferred in 2011, with the majority of respondents agreeing that this product will be the top choice amongst borrowers, followed by Professional Packages and Fixed Rate Home Loans.

"Variable rate home loans usually provide options and flexibility, but they can ride the swings and roundabouts of interest rate movements", Mr Graham said.

"The choice of loan will often be determined by the borrower's situation and financial priorities.

"It is difficult for borrowers to make decisions about the long term direction for interest rates - so a borrower's choice needs to be made with their own financial goals in mind", he concluded.

* The survey was completed in late December 2010 by over 1000 professionals in the mortgage industry including banks, non banks, brokers and mortgage managers. QBE LMI was interested in the views of these professionals to gain insights and expected forecasts for the mortgage market over the next 12 months. The survey covered new residential loan applications, anticipated interest rate movements and perceived consumer confidence.

Take a note, table

Bright ideas happen randomly. Whether it's an inspirational thought, a `must-have' for the shopping list, an extra `to-do' or an innovative new invention, it truly is a shame how many things slip by when they are not written down.

Looking like a prop from "Honey, I Shrunk the Kids", Note Table assures that you will always have a note pad around and you'll never need to look hard to find it. Made from 5000 sheets of coloured paper bound down one side with PCQ glue, the table itself is one giant post-it notepad. It doesn't, however, come with giant pen, or a giant fridge to stick them to.

Living in a bubble

There's nothing like spending a night outdoors, sleeping under the stars. Except for insects, animals and our currently bi-polar weather conditions, in which case you'll no doubt be seeking shelter.

An innovative twist on camping out, CrystalBubbles are a new approach to temporary leisure accommodation, providing the comforts of a hotel room with a crystal clear view of the outer surroundings. Each of the huts features a bubble-like structure that allows occupants to see out from every angle without being seen from the outside, making it easy to sleep under the stars regardless of the weather, mosquitoes or neighbours.

Thursday, February 10, 2011

Latest Property News from Ted Hanson

Friday 11 February 2011
15 minutes to clean and serene

From the kitchen to the garage, sometimes it takes just minutes to finally rid a room of clutter.

- Try a 15-minute de-clutter exercise. Pick a room and walk through with a garbage bag, looking at what's visible, like the teacup collecting dust on your mantel for five years. Ask yourself: Do I love it, do I use it, does it bring me joy? If not, it goes into the donate bag. Involve your kids. They'll let go of stuff more easily if they help decide.

Read the article

Apartments get a big tick

Building approvals for new apartments finished on a strong note at the end of last year, almost forty per cent higher than at December 2009, according to data released this week by the Australian Bureau of Statistics (ABS).

The figures show that the total number of dwellings approved rose 8.7 per cent in December 2010, in seasonally adjusted terms, after falling 3.9 per cent in November.

New South Wales (up 16.7 per cent), Victoria (up 11.4 per cent), South Australia (1.1 per cent) and Tasmania (9.9 per cent) recorded more dwelling approvals this month while Queensland (down by 5.7 per cent) and Western Australia (down 4.2 per cent) recorded fewer dwelling approvals in seasonally adjusted terms.

The number of private sector houses approved remained flat in December with falls in South Australia (down 11.2 per cent) and Queensland (down 0.2 per cent) and increases in New South Wales (up 0.4 per cent), Victoria (2.1 per cent) and Western Australia (0.8 per cent).

The rise was due mainly to an increase in apartments, with the seasonally adjusted estimate for `private sector other dwellings' approved rising 21.3 per cent following a fall of 6.4 per cent in November.

This figure represents a hefty rise of 37.9 per cent on the number of approvals recorded for that sector in December 2009.

The value of total building approved rose 8.3 per cent in December in seasonally adjusted terms. The value of total residential building rose by 5.7 per cent while non-residential building rose by 13.1 per cent.

Builder sentiment stabilises
Builders expect their industry to recover in the months ahead, a recent Master Builders Australia survey has found.

Master Builders Chief Economist, Peter Jones, said that the latest results show builders cautiously optimistic about their own business circumstances and the health of the Australian building and construction industry in 2011.

"Builders expect activity to improve even though their own business conditions remained essentially unchanged during the December quarter and most of the survey's business expectations indicators remain well below their recent peaks", Mr Jones said.

The survey shows that display centre traffic/enquiries fell in the December quarter, albeit at a slower rate than in the previous quarter, and sales followed a similar pattern. Builders' backlog of work on the books remained `remarkably resilient' but can be expected to suffer as government stimulus work dries up.

"Encouragingly, the results of this survey indicate that builders are now less likely to reduce their workforce in the period ahead", Mr Jones said.

"Both residential and non-residential sectors remained below par in the December quarter, although builders may be becoming slightly more ambivalent than first thought about the prospect of losing schools and social housing projects over the next six months."

"Financial constraints continue to be a concern for commercial and residential builders alike, with no evidence of any easing in the latest survey", he concluded.

Termites on the move

Termites are an ever-present risk to homes across Australia, but homeowners are being cautioned to be especially aware of an increase in activity after the crazy weather of the past few months.

The Victorian Building Commission issued the warning this week, saying that since termites favour damp conditions, the above-average rainfall, flooding and increased humidity experienced over the past year have added to that risk.

Even if your home is protected from termite damage, the Commission says that where flooding has occurred or water has pooled under a home, existing termite barriers may have been breached, so owners should have their installations checked by experts.

Termite damage is not covered by insurance, so regardless of weather conditions it is important that homeowners actively consider the precautions they need to take against termites.
Whether your home is new or old, the following tips will help reduce the risk of termite attack:

- Contact your local council to see if you live in a termite prone area.
- Have an expert inspect your home for termite activity.
- Speak to an expert if you uncover what you think are termites. Do not disturb the site.
- Invest in physical or chemical termite barriers when building or extending your home.
- Chemical treatments last around five years, so have an expert inspect and re-apply the treatment regularly.
- Remove tree stumps and the roots of old trees from around your home.
- Don't store timber or firewood against your house.
- Ensure your home is inspected (at the least) every five years by an expert.
- Before buying a home, have a pre-purchase inspection - including for termites.
- Maintain existing termite barriers. If you renovate, landscape the garden or experience flooding, your barrier may be compromised, so check with an expert.

Protection from termites in the long-term can be gained by the application of chemical or physical barriers (or both) to prevent termites from penetrating your home's structure. An Australian Standard has been written on termite management.

Both physical and chemical termite barriers are designed to prevent concealed access and to force termites into the open where their mud tunnels can be visible. Physical barriers range from small graded stone particles to fine termite-resistant, tough mesh and chemically impregnated composite products.

For more information on the management of termites, contact your local council or visit: where a list of declared municipalities is posted.

Floods dampen construction industry

The recent floods in Queensland and Victoria have not helped the national construction industry, which declined at a steeper rate in January 2011, the Australian Industry Group (AIG) said this week.

The AIG Australian Performance of Construction Index (Australian PCI®) in conjunction with the Housing Industry Association fell 3.6 points to 40.2. This is the eighth consecutive month the index has been below the 50-point level that indicates a contraction in activity.

All four sub-sectors declined in the month, with significant falls across the apartment building (down 15.2 points) and engineering construction (down 19.6 points) sub-sectors.

Australian Industry Group Director Public Policy, Dr Peter Burn, said that while flooding and bad weather conditions have caused project delays and stoppages, interest rates, caution on the part of home buyers and businesses and tight credit conditions continue to hamper growth.

"As the post-flood rebuilding task takes hold over coming months, the sector is likely to see a pick-up in activity in some regions", Dr Burn said.

"However, the nation-wide pick-up in construction will be moderated by the recent announced deferral of some major infrastructure projects", he added.

The Australian PCI® shows that the sub-indices for all four of the major sub-sectors declined; house building (down to 39.5), apartment building (38.6), commercial (44.2) and engineering construction (38.7). Employment also continued to decline in January due to on-going subdued demand, project stoppages and the need for businesses to reduce costs.

Gone walkabout

Do you know anyone who resisted buying a house because they didn't want to be tied to one place? Perhaps the Walking House could be enough to shift their fear of geographical commitment.

The lovechild of UK art/design groups N55 and Wysing Arts Centre, Walking House does just as the name suggests - walk. The modular dwelling system enables people to live a peaceful nomadic life, moving slowly through the landscape or cityscape with minimal impact on the environment.

Energy is collected from the surroundings using solar cells and small windmills, and there is a system for collecting rainwater and a system for solar heated hot water. A small greenhouse unit can be added to the basic living module, to provide a substantial part of the food needed by the inhabitants. A composting toilet system allows sewage produced by the inhabitants to be disposed of. A small wood-burning stove could also be added to provide CO2 neutral heating.

For those who like the idea of community living, more units can fit around the hexagonal shaped structures, building vertically or horizontally, and because Walking House moves on all sorts of terrain it isn't dependent on existing infrastructure. The prototype can be seen in action on YouTube.

Seeing the bigger picture

Televisions seem to be getting larger. While the home cinema experience is more impressive than ever, entertainment systems occupy a good deal of visual real estate in our homes.

In an attempt to reduce visual pollution, designer Michael Friebe has come up with Loewe Invisio, a flat-screen TV that is transparent whilst not in use.

Thursday, February 3, 2011

Latest Property News from Ted Hanson

Friday 04 February 2011
A Mother's Touch

Making fun art for her children's bedrooms provided the creative spark for this stylist to enter a charming niche market, writes Harriet Alexander.

Julz Beresford never imagined that the artwork she made for her baby daughter would go much further than being just that. The stuff in the shops - graphic prints and children's names - was not to the taste of Beresford, a professional stylist. She hung two clocks in her daughter's room, one that told the time for her husband's home city of London and one that told the time for Sydney, and painted raspberry red and pink circles on the wall behind them.

Read the full article

Reserve - no change

Borrowers breathed a sigh this week when the Reserve Bank (RBA) announced its decision to leave the official cash rate unchanged at 4.75 per cent.

In a statement announcing the decision, RBA Governor Glenn Stevens said that the Bank expects that inflation over the year ahead will `continue to be consistent with the 2-3 per cent target'.

As would be expected, the Bank recognised that the flooding in Queensland and Victoria is having a temporary adverse effect on economic activity and prices, but does not expect it to have any major impact on inflation.

"In setting monetary policy the Bank will, as on past occasions where natural disasters have occurred, look through the estimated effects of these short-term events on activity and prices", Governor Stevens said.

"The Bank's preliminary assessment is that the net additional demand from rebuilding is unlikely to have a major impact on the medium-term outlook for inflation.

He concluded that while the Bank will continue to assess the effects of the floods and the subsequent recovery, it judged that the current stance of monetary policy remained appropriate in view of the general macroeconomic outlook.

Home values up in 2010

House values rose around five per cent last year, according to figures released this week.
Preliminary estimates from the Australian Bureau of Statistics show that the price index for established houses for the weighted average of the eight capital cities increased 5.8 per cent in the year to December quarter 2010.

Annually, house prices increased in Melbourne (up by 10.8 per cent), Sydney (up 7.4 per cent), Canberra (6.5 per cent), Adelaide (3.5 per cent), Darwin (1.7 per cent), Hobart (1.0 per cent) and Brisbane (0.7 per cent) and decreased in Perth (a drop of 2.0 per cent).

Research by data analyst firm RP Data reveal similar results. Based on more than 357,000 sales in 2010, the RP Data-Rismark Hedonic Home Value Index reported 4.7 per cent growth over the 2010 calendar year across Australia's combined capital cities.

In the `Rest of State' markets, which cover the (approximately) 40 per cent of homes not located in the capitals, dwelling values rose by just 0.8 per cent during 2010.

Across all regions throughout Australia, RP Data-Rismark estimates that the national median dwelling price was $420,000 in the three months to December. In the capital cities, the median dwelling price was a higher $475,000.

Across the cities, the most expensive capital city is Sydney ($525,000), followed by Canberra ($510,000), Melbourne ($505,000), Darwin ($481,000), Perth ($465,000), Brisbane ($435,000), Adelaide ($387,000) and Hobart ($325,500).

Almost all of the growth in capital city home values was experienced in the first quarter of 2010, when dwelling values grew by 3.6 per cent (compared with 4.7 per cent over the year).

In the December quarter, Australian dwelling values were broadly stable. In the capital cities, RP Data-Rismark's National Hedonic Index rose by only 0.4 per cent (seasonally-adjusted). In the `Rest of State' markets, house values were down by -0.4 per cent in seasonally-adjusted terms.

Melbourne dwelling values led the way in the December quarter with 1.1 per cent capital growth, followed by Sydney (+0.9 per cent), and Adelaide (+0.4 per cent).

In contrast, home values in Perth (-1.9 per cent), Darwin (-1.7 per cent), Canberra (-1.3 per cent) and Brisbane (-0.5 per cent) all went backwards in seasonally-adjusted terms during the final three months of the year.

Over the 12 months to end December 2010, the best performing cities were Melbourne (+8.4 per cent), Sydney (+6.6 per cent), and Darwin (+4.8 per cent). The worst performers were Perth (-2.3 per cent) and Brisbane (-1.0 per cent). Canberra (+2.5 per cent) and Adelaide (+3.6 per cent) fell slightly short of the national, value-weighted capital growth rate.

RP Data's director of research, Tim Lawless, remarked that while capital gains have been uninspiring, investors are benefiting from a tight rental market.

"Nationally, gross yields for apartments and houses are 4.7 per cent and 4.0 per cent, respectively", Lawless said.

"The most attractive apartment yields are found in Darwin (5.7 per cent), Brisbane (5.3 per cent), Canberra (5.3 per cent), and Sydney (5.0 per cent).

"Melbourne and Perth have the lowest apartment yields, with returns of just 4.1 and 4.3 per cent, respectively."

Mr Lawless pointed out that leading up to Christmas the number of homes being advertised for sale ramped up very quickly with the capital city markets peaking at just under 127,000 listed properties compared with 89,000 homes for sale at the same time the previous year.

"Auction clearance rates were hovering slightly below 50 per cent at the end of last year, and average selling times and vendor discounting had both been trending in favour of buyers.

"These factors imply that we should see further improvements to buyer leverage in 2011, subject to the course of interest rates", he concluded.

Moving house with pets

Many people move house at this time of year, and it can be a stressful, hectic experience - especially if you have children. Imagine how confusing and distressing it must be for your pets, who have no comprehension of what is happening, let alone why their world is being turned upside down.

Here are some tips for making the move less distressing for your pet and consequently easier for you.

* Visit your vet for a final checkup and get your pet's records for its new vet.
* Keep to routines where possible, particularly with feed times and walking.
* On moving day, make sure your pet is secure and away from the chaos. If possible, have a child keep it company - this will keep them both settled and out from underfoot! Cats in particular will sense disruption and may run away or hide, so it's a good idea to keep them inside the night before.
* Pack your pet's belongings (rugs, bowls, toys) last, and keep them together so that they are easy to find at the other end of the move.
* If moving your pets by car, keep them secure and calm. Cats, birds, rabbits, guinea pigs etc should be transported in cages covered with a dark cloth, while fish can be moved in a special fish bag (available from your local pet shop) contained in a bucket to restrict the motion. Avoid sedating your pets where possible, as this will affect the way they feel for the first 24 hours in their new home.
* A professional pet transporter is useful if the trip is a long one, as they will deal with all aspects of the move and make it as easy as possible for both you and your pet.
* To settle a dog into a new home, take it for a walk round the house and garden, letting it sniff and take its time. Give it a feed and show it where it can go to the toilet.
* Cats, being territorial, take a little more work to settle into a new environment. Find a room where your cat will be least disturbed by the unpacking, and fill it with familiar things such as a comfy chair or old t-shirt as well as its own belongings. This will change the unfamiliar smells and let the cat understand that its family is in the house. An old wive's tale wisely suggests wiping the cat's paws with butter so that the first thing it does is lick them, establishing both acceptance and gratification.
* Have your cat use a litter tray and keep it inside for the first few days until it understands that the family is here now and all is going to be okay. When you let it outside for the first few times, stay nearby and keep it company while it explores. Be aware of any aggressive locals who may try to assert their superiority - this is almost inevitable, but better if it happens once your cat is confident and established.

Finally, remember to get your dog or cat registered in the new location, and tagged with their new address and phone number. This is especially important as cats and dogs may wander and get lost in their new surroundings.

Rental scheme should be spared: REIA

Industry bodies are not happy that with the Government's recent announcement that the National Rental Affordability Scheme (NRAS) will be wound-back to provide funds to the re-building effort of flood-affected regions of Australia.

Prime Minister Julia Gillard last week named the NRAS as one of the initiatives that will be reduced through spending cuts - a move that the Real Estate Institute of Australia (REIA), says will reduce the proposed number of homes from 100,000 to 35,000.

REIA President David Airey said that while he recognises that the Government needed to cut expenditure, so as not to place pressure on interest rates, the Institute questions the choice of programs targeted.

"We understand that flood-affected areas need to be re-built, however the result of the proposed change to the NRAS will greatly affect affordability in the property market across Australia, including Queensland, by placing upward pressure on rents and greater strain on the demand-supply imbalance", Mr Airey said.

Australia has a chronic shortage of housing. Even before the current flood disasters, the Housing Supply Council forecasted the demand-supply gap increasing by more than 50 per cent, from just over 200,000 dwellings in 2010 to over 300,000 by 2014.

"One of the greatest needs following the floods will be affordable housing", Mr Airey continued.

"The longer-term goals of the NRAS have been overlooked which will be detrimental to improving affordability in Australia - such a crucial issue at present", he said.

"Indeed, it would have been appropriate to review the Housing Affordability Fund (HAF) and NRAS programs to address their effectiveness and see if improvements were possible", Mr Airey concluded.

Banks battle for home turf

It can be scary managing a mortgage at any time, but this week another story has come out of the United States that exemplifies the mess that is currently America's mortgage system, with too many claims laid on one stake.

It seems one suburban house is caught in a legal battle between financial lenders Home123 Corporation and U.S. Bank, the UK Dailymail reported recently. Apparently both have launched separate bids to foreclose on the property, leaving the homeowner caught in the middle.

While U.S. Bank isn't close to backing down, it has had to admit to having lost the original mortgage documents concerning the property.

Cutlery maketh the table

It's often said that clothes don't make the man. The Precious Famine table twists the old standard by taking the cutlery that would be found adorning a table, and using it to create the table itself.

Made with found Cristolfe silverware, the table is a shapely mess of knives, spoons and forks. It may be an eye-catching centrepiece, but we could imagine some confusion when setting the table for dinner.