Sunday Territorian 4 Apr 2010
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18 Sunday Territorian, Sunday, April 4, 2010 www.sundayterritorian.com.au P U B : N T N E W S D A T E : 4 -A P R -2 0 1 0 P A G E : 1 8 C O L O R : K SUNDAY MONEY AND PROPERTY Jobs growth in recession-racked US heartens President Obama US PRESIDENT Barack Obama said on Friday the recession-racked US economy was beginning to turn the corner, as data showed 162,000 jobs were created in March, the biggest increase in three years. The US Labour Department said job creation leaped dramatically in March after years of near-continual losses, but not enough to budge the unemployment rate from 9.7 per cent. With close to one in 10 American workers without a job, the monthly figure always an eagerly awaited indicator was seen as a key sign of the health of the economic recovery. In a rare positive report, the Labour Department said job creation rose markedly from February, when the economy lost 14,000 posts according to revised figures. But, the department said in March, the number of unemployed persons was little changed at 15.0 million, and the unemployment rate remained at 9.7 per cent. News that the economy is again creating jobs came as a relief to Obama, who lauded the report as a sign that the still-fragile economy was on the mend. I have often had to report bad news during the course of this year, Obama said in remarks at a factory in North Carolina, noting that since the recession began in December 2007 about eight million Americans had lost their jobs. Today is an encouraging day. We learned that the economy actually produced a substantial number of jobs instead of losing a substantial number of jobs. We are beginning to turn the corner... the worst of the storm is over. Weve been through the worst period of economic turmoil since the Great Depression, Obama said. While weve come a long way, we still got a ways to go. The Labour Department also reported sobering news that the number of Americans who have not worked in more than half a year rose by 414,000 in March to 6.5 million people. Mortgage mayhem as banks jockey for position By GEORGE LEKAKIS THE 18-month stranglehold on the Australian mortgage market enjoyed by Westpac and Commonwealth Bank is slipping as rivals such as ANZ begin to boost lending. Official data published by the Australian Prudential Regulation Authority shows that banks increased lending to homebuyers by $8.5 billion in February, of which Westpac and its St George subsidiary accounted for 30 per cent, or $2.62 billion. CBA and its Bankwest arm generated $2.21 billion worth of new business. Most second-tier banks are still struggling to compete with their bigger rivals, with AMP Bank actually suffering a net contraction during the month. The exception was Bendigo & Adelaide Bank, which increased home lending by $320 million. While Westpac and CBA together accounted for 56 per cent of the market growth during the month, their combined dominance has fallen away from the 70 per cent share they recorded in 2009. The APRA figures show that ANZ Bank was the fastest growing home lender among the major banks in February, expanding its mortgage business by $1.54 billion. National Australia Bank also increased its share of the market, boosting its home lending by $1.31 billion. The results should have been better for ANZ and NAB, both of which have been plagued by processing delays with their mortgage systems. NAB, which has the cheapest variable rate among the majors, encountered technical problems in late January which meant it could not process loan approvals submitted by some mortgage brokers. Another issue of concern for NAB was its relatively poor performance in raising consumer deposits in February. NAB boosted its retail deposit base by only $200 million less than the three other major banks and even Bank of Queensland, which was up $208 million. Despite some runoff at Bankwest, CBA increased retail deposits by $840 million, followed by Westpac($577 million) and ANZ($506 million). However, the big loser during the month was ING Direct which suffered a $475 million decline in its deposits business. Generation show us the money is waiting Handover of wealth the next big thing By KIM CHRISTIAN AN UNPRECEDENTED baton change of wealth is expected over the next 15 years as the older generation hands over as much as $400 billion in property to their children, a report says. An ageing population and high home ownership rates will combine to produce a perfect storm of wealth transfer between generations, Bankwests Inherited Housing Report shows. Our research projects that there will be a 95 per cent increase in the number of estates with housing assets by 2025, Bankwest Retail chief executive Vittoria Shortt says. In 2009 there was an estimated $16 billion of housing inheritance and our report shows this could increase by 93 per cent to $31 billion a year by 2025. Ms Shortt said veterans and baby boomers were sitting on housing assets worth $1.5 trillion to $2 trillion. The analysis is based on Australian Bureau of Statistics Census data on home ownership by gender, age group, statistical division, ABS life expectancy data by state and age and Residex median house prices by statistical division. While housing supply had failed to respond to the recent demand for homes, which made up about 60 per cent of total household wealth, this could change as older generations died off, Commonwealth Bank chief economist Michael Blythe said. If we are going to have more vacant houses because of that demographic, ageing death sort of story, then supply and demand may come more into balance at some point because of that, Mr Blythe said. Some aspiring home owners, who already feel priced out of the booming housing market, are clinging to the hope that house prices will become overvalued and take a dive in the years ahead.
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