Territory Stories

The Centralian advocate Fri 11 Jan 2008

Details:

Title

The Centralian advocate Fri 11 Jan 2008

Collection

Centralian Advocate; NewspaperNT

Date

2008-01-11

Notes

This publication contains may contain links to external sites. These external sites may no longer be active.

Language

English

Subject

Community newspapers -- Northern Territory -- Alice Springs; Tennant Creek (N.T.) -- Newspapers; Alice Springs (N.T.) -- Newspapers.; Australia, Central -- Newspapers

Publisher name

Nationwide News Pty. Limited

Place of publication

Alice Springs

Volume

v. 61 no. 66

File type

application/pdf

Use

Copyright. Made available by the publisher under licence.

Copyright owner

Nationwide News Pty. Limited

License

https://www.legislation.gov.au/Details/C2019C00126

Parent handle

https://hdl.handle.net/10070/234107

Citation address

https://hdl.handle.net/10070/654965

Page content

112 Centralian Advocate, Friday, January 11, 2008 PU B : C A D V D A T E : 11-JA N -2008 PA G E : 112 C O L O R : C M Y K REAL ESTATE Rentals likely to increase in 2008 INCREASING demand and lower vacancy rates will cause rents to increase during 2008, the Real Estate Institute of Australia predicts. High demand for rental properties caused by population growth and declining investor interest - suggests vacancy rates, running at an average 1.7 per cent, are unlikely to improve, it says. Increases in median rents can be expected in all states, the institute says in its 2008 real estate market outlook released today. The likely increases follow across-thecountry increases last year with rents for three-bedroom houses increasing by an average of 12.6 per cent to September 2007. The institute says rental affordability is already a significant issue in several cities, notably in Darwin where the median rent for houses is $440 per week and for other dwellings $340 per week. Darwin is now the most expensive rental location in Australia, although Sydney and Canberra renters also pay $340 median weekly rent for twobedroom other dwellings. The cheapest rental location is Adelaide at $255 per week for a three-bedroom house and $205 per week for a two-bedroom dwelling. But even there rents rose more than eight per cent in the year to September 2007. The institute says investors have shied away from the housing market as interest rates have risen and to take advantage of other investment opportunities which have more favourable taxation treatment. The slower transition from renting to buying, caused by the lowest first-home affordability rate in 22 years, was also impacting on the number of properties available for rental. Broker reform cant be hurried THE New South Wales opposition had called for the fasttracking of new laws to eliminate dodgy mortgage brokers. In November, NSW Fair Trading Minister Linda Burney unveiled a draft bill to reform the mortgage and finance broking industry in Australia. Under the reforms, brokers would be subject to a licensing process, in a bid to screen out operators with a history of dodgy lending practices. The reforms, drafted on behalf of all states and territories under a Ministerial Council on Consumer Affairs (MCCA) agreement, will be voted on by the various Australian governments at a ministerial meeting set down for April or May. Ms Burney said the legislation would come into force at the end of this year, or early in 2009. Opposition fair trading spokeswoman Catherine Cusack slammed the delay, calling for both the meeting and the legislations enactment to be brought forward. Ms Cusack said: These laws are essential to protect home borrowers from excessive interest rates and unfair conditions in home loan contracts. As a result of (the delays) ... notorious shonks who should be thrown out of the finance industry are still allowed to prey upon borrowers. It is urgent and essential that minister Burney sets herself a firm and early deadline to protect vulnerable home borrowers. A spokeswoman for Ms Burney said the public consultation process was due to end on February 15, and the timing of the MCCA meeting could not be changed. She said: The consultation process is already in train, that ends on February 15. The next stage is to meet with MCCA which will be in April or May, then it rolls out from there. It is all under way. Exit fees squeeze churners of loans Early exit fees can be avoided with background work. EARLY exit fees on home loans can cost you thousands of dollars, but they can be avoided. Senior banking officials says before taking out a loan, people should get advice on what fees would apply in particular circumstances, and have a clear understanding of their short-term goals. InfoChoice general manager Denis Orrock said deferred establishment fees, early exit fees and break costs on loans could run into thousands of dollars. Mr Orrock said: The massive increase in loan churning and the resulting fall in the average life of a mortgage has seen new emphasis placed by lenders on fees for leaving a loan after the first few years. Especially watch out for these new fees on loans that offer low or no upfront fees when you take them out. Mr Orrock said exit fees could be a flat fee or a percentage of the amount of the loan outstanding at the time. These fees are not incorporated in lenders comparison rate calculations, one of the reasons there is an increasing incidence of these charges, he said. BankSA general manager Chris Ward said exit fees, or early repayment fees, were generally payable on loans with a honeymoon period, which had a discount factored into the interest rate in the first year. He said on this type of loan the financial institution would expect continuity of customer for a period of time three to four years perhaps to ensure the banks earning capacity on the loan. Mr Ward said the fees could be significant, and depended on how long the loan had been in place and how long it still had to run. Australian Central senior manager retail banking Wendy Spurling said break costs were charged when a fixed rate loan was paid off early. She said: For example, if you take out a five-year fixed rate loan and refinance in two years, under the contract there would be a penalty involved because youve broken the contract, she said. Ms Spurling said the best way to avoid these costs was to consider them all before taking out the loan product. Get some advice on making sure youve got a loan that suits your needs, dont just look at the cheapest price what are your longer term goals and how long do you intend to stay in this property? she said. Be aware of penalties. Make sure when you receive your contract you fully understand what they are. Mr Ward said it all came down to asking the right questions before signing any contracts. When youre borrowing money, ensure that you ask lots of questions and ensure that you have your own objectives clear in your mind.


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