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Savers' sorrow: Term deposit rates fall |
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(15 Mar 2010) Three of the four major banks have lowered their term deposit rates - ANZ Bank, Westpac and National Australia Bank, some by as much 50 basis points, or half a percentage point, according to data from Canstar Cannex.
ANZ Bank has lowered the interest rate on a four-month term deposit of between $5000 to $99,999 by 40 basis points to 5.1 per cent aince Thursday. National Australia Bank's rate on a three-year deposit for an amount between $5000 and $9999 fell by 50 basis points to 6.5 per cent, Canstar said. Some other NAB rates also fell.
At the same time, Westpac's four-month rate on a deposit between $5000 to $9999 fell by 10 basis points to 5 per cent. Commonwealth Bank has not announced any changes to its term deposit rates, the bank confirmed this afternoon.
Term deposit rates, important to savers who choose whether to roll over their nest eggs with the same bank, or shop around for better returns, move not only because of interest rate expectations, Canstar Cannex financial analyst Peter Arnold said. They also move because of funding changes - how much banks pay for cash borrowed - over certain terms and changes in banks' need for funding over time. "The lowering in term deposit rates across the board is more likely due to external factors such as changes in money market rates that have affected either their cost of funding, or their need for funding from the deposit book," said Mr Arnold.
Not all term deposit rates have fallen. The ANZ bank added 50 basis points to a three-year rate for deposits of between $5000 and $24,999 to 6.88 per cent."These change weekly depending on market conditions and our funding strategy," said a spokeswoman for the ANZ. The overall trend, however, was for lower term deposit rates at NAB and Westpac, the data showed. Mr Arnold said if banks reduced the variable deposit rates for ongoing savings rates, there would be more cause for concern from consumers.
The major banks passed on the RBA's 25-basis-point rate rise this month on regular savings accounts, data shows. Banks have begun to more aggressively court deposits on regular accounts in an effort to win more retail customers, thereby increasing market share.
Australia's banks are also anxious to source more funds onshore rather than depend on the pricier and more fickle international wholesale funds market.
(Source from: BusinessDay)
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4500 new affordable rental properties for Victoria |
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March 12, 2010
A further 4500 affordable rental properties will be built in Victoria as part of the state government's plan to tackle Melbourne's record-low vacancy rates and rising rents.
The government is expected to this morning announce that Victoria will contribute $177 million in incentives to encourage investors to build the properties under the federal government's National Rental Affordability Scheme.
Under the scheme, properties are earmarked for rental to low-income individuals and families while private investors or community housing associations are provided with tax-breaks and subsidies from both the Commonwealth and state governments over a 10-year period.
The announcement will be made as part of the launch of the long-awaited Victorian Integrated Housing Strategy.
However, it is understood that the strategy does not include any plans for "inclusionary zoning" - a planning tool mandating the amount of new housing stock to be set aside as social or affordable housing - despite the efforts of lobby groups to convince the government.
Housing Minister Richard Wynne and Consumer Affairs Minister Tony Robinson will launch the plan at 9am.
(Source from Theage.com.au)
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Biggest fall in home loans in a decade |
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(10 Mar 2010) The number of home loans plummeted by 7.9 per cent in January, the biggest fall since June 2000, after the phasing out of last year's first-home buyers' grant boost and interest rate rises sapped demand. January's result follows a revised 5.1 per cent drop in December, the Australian Bureau of Statistics reported, citing seasonally adjusted figures. Economists had been predicting a 2 per cent increase in January. All up, the number of commitments for owner-occupied housing fell to 51,056 for the month. Total housing finance by value fell by 3.3 per cent in January, seasonally adjusted, to $21.2 billion.
The slump in demand for home loans comes as the Reserve Bank earlier today warned that house prices would keep rising until housing construction accelerated to meet the swelling population. Delays on planning approvals and a shortage of skilled tradesmen - a problem likely to worsen as the mining boom looks set to return - are contributing to rising costs in the sector.
''While consumers are shrugging off interest rate hikes, rising borrowing costs are clearly hurting the housing market," said Moody's Analytics economist Matthew Circosta. ''This marks the fourth consecutive decline in housing finance since the Reserve Bank of Australia commenced tightening monetary policy, suggesting momentum in the property market is fading,'' Mr Circosta said.
Buoyant consumer confidence Vs rate rise
Mr Circosta said buyer enthusiasm could come under more pressure if the RBA raises interest rates again, responding to further signs of a strong job market. The unemployment rate is expected to remain at 5.3 per cent when the data is updated tomorrow.
Macquarie analyst Rory Robertson said that despite today's poor reading on home loans, ''tomorrow's jobs report is much more likely to make or break the case for an April hike.'' ''It's probably a stretch at this stage, but a big rise in full-time jobs and a further drop in unemployment would spark plenty of talk and fears of an April hike,'' he said.
The Reserve Bank raised its cash rate to 4 per cent last week, its fourth increase since October, as it lifts lending rates to more normal levels. Australia was one of the first developed economies to begin reversing its monetary policy in the wake of the financial crisis.
The dollar eased on the news of the fall in housing finance, dropping from about 91.5 US cents to 91.36 US cents. Other data out today indicated that consumer confidence remains buoyant despite the rate rises.
First-home buyer loans
The number of first-home buyer loans as a share of total borrowing edged down from 21 per cent of the total in December to 20.5 per cent in January 2010. Over the same period, the average loan size for first-home buyers fell $5,400 to $284,700, while the average loan size for all houses fell $200 to $282,800, the ABS said. Home loans for new houses dropped 13.2 per cent to 2146 in January, while loans for established dwellings dropped 8.2 per cent to 42,303.
Among the states, homes loans dropped 7.3 per cent in New South Wales and 3.7 per cent in Victoria, seasonally adjusted. Loans fell 11.1 per cent Western Australia and by 9.6 per cent in Queensland, in the month.
In South Australia they fell 5.5 per cent and in Tasmania they tumbled 8 per cent. In the Australian Capital Territory, they were 4.4 per cent lower. Home loans rose only in the Northern Territory by 3.7 per cent.
Source from: BusinessDay
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Hiring Plans Stepped up Among Australian Employers |
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(9 Mar 2010) Job advertisements posted their biggest increase in 11 years last month as employers stepped up hiring plans.
The total number of jobs advertised rose by 19.1 per cent in February, after an 8.1 per cent fall in January, according to the ANZ Bank's monthly survey. It was the largest monthly increase in the 11-year history of the series, ANZ said. ''Total job advertisements are continuing to improve month on month from their cyclical low point last year,'' said ANZ chief economist Warren Hogan. ''This has already translated into solid employment growth and reduced unemployment, even through a period of relatively strong labour force growth.'' Jobs advertised in major metropolitan newspapers increased by 13.1 per cent, seasonally adjusted, in February, while internet job advertisements rose by 19.6 per cent, seasonally adjusted, ANZ said.
The overall jobs market has been helped by surging business confidence, which increased for the second straight month in February, according to the National Australia Bank survey, also out today. The market bet on an April interest rate rise by the Reserve Bank edged up after the release of the data. Credit Suisse predicts a 36 per cent chance of a 25 basis point hike next month, up from 31 per cent before.
In February, total job ads were 27.5 per cent above their July 2009 seasonal trough but remain 42.6 per cent below the all-time peak reached in April 2008. Newspaper ads increased by 22 per cent in Western Australia, seasonally adjusted, where mining and resource-related companies are rushing to add staff as projects come on line after being temporarily shelved during the global financial crisis.
South Australia's newspaper ads rose 19.5 per cent in February, while Victoria's jumped 19.3 per cent and those in New South Wales increased 14.4 per cent. Only Queensland posted a decline of 6.3 per cent in the month. "All states and territories recorded newspaper job ad levels above those of February 2009 except Queensland," ANZ said.
Even with this month's recovery, some recruiters have noted the hesitancy of companies to add staff because of fears of a potential slowdown as the government's stimulus and low interest rates come to an end. The Australian Bureau of Statistics will update the official jobless figure on Thursday with analysts predicting the unemployment rate to remain at 5.3 per cent, with 15,000 jobs created in February.
(Source from: Business Day) |
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