RBA cuts interest rates to 3.25%

The RBA’s recent cut will save a mortgagee with a typical 30-year, $300,000 home loan about $170 in monthly repayments if the lender passes on the full amount. Over the life of the loan, the savings will total about $61,272.

”There was a significant deterioration in world economic conditions late in 2008,” said RBA Governor Glenn Stevens in a statement accompanying the cut. ”The effects on household and business confidence of the financial turmoil following Lehman’s collapse, and continuing strains on major financial institutions, saw a significant downturn in demand around the world.”

The RBA has now lopped four full percentage points off its cash rate since it changed tack and began cutting rates last September. The cash rate has not been this low since 1960, according to Bloomberg data.

The rate reduction comes hours after the Federal Government announced a $42 billion stimulus plan aimed at keeping the economy out of a recession. The spending includes some $12.7 billion in cash payments and $28 billion on new infrastructure projects including roads and schools.

“What they have done is certainly enough, put together with the fiscal package,” said Michael Blythe, chief economist for the Commonwealth Bank. ”Policy setting in Australia is very stimulative, although we are quite likely to see rates lower” in the first half of 2009.”

Mark Forytarz now on WordPress

To read some of Mark Forytarz other thoughts on property, go to the Mark Forytarz WordPress Blog.

Paul Castrans property blog

Paul Castran has a new blog, you can reach is by going to: www.paulcastran.com.au, or www.paul-castran.com.au.

Melbourne Property – What to expect in 2009

INFRASTRUCTURE. It is not a sexy word. But it will turn property pundits’ heads like nothing else in 2009, experts claim.

Close proximity to major shopping centres, good schools, transport and places to work and play will create a safety-net for real estate values next year, they say.

Median home values in inner and middle-ring suburbs should hold ground in 2009 if recent economic waves subside, a Sunday Herald Sun survey of senior industry figures revealed.

But homes in suburbs with a saturation of similar properties and inner east suburbs with inflated prices are poised to suffer value drops.

“Follow the infrastructure trail in 2009,” Barry Plant Group boss Barry Plant said.

“Next year and for the next two decades, convenience will guide the market.

“People will no longer travel more than 45 minutes to work and this will put a high value on access to infrastructure.”

To get a list of expert predictions, go here: http://www.news.com.au/heraldsun/story/0,21985,24846944-5013926,00.html

Beach Box 28 on the Esplanade in Brighton, to sell in February

ONE of Melbourne’s smallest addresses is likely to draw one of its biggest crowds when the first beach box sale of the summer takes over Brighton Beach on February 7.

Beach Box 28, Esplanade, at the southern end of the Dendy St beach boxes, is selling for the first time this decade.

The vendors, a Brighton family, bought the “all original” box about 15 years ago, when the average price of a box was “about $12,000”, Hocking Stuart agent Kate Strickland said.

She said the 3.5m by 5m weatherboard box had “no special features” but it did have a sofa bed, a table that extended from the wall and an oar decoration on the wall.

“It is definitely old school, a beach box ready for someone to put their stamp on,” Ms Strickland said.

Hocking Stuart last sold a Brighton beach box in summer 2007, for $200,000.

“There have been heaps of inquiry but these boxes never go before auction because it’s the kind of thing that must sell under competition,” she said.

“We’ve had inquiries from people in Florida but, of course, we must sell it to someone paying bayside rates, so that tends to rule out the overseas parties.”

Ms Strickland said she’d be on the beach every Friday night and Saturday afternoon in January, hosting open for inspections.

The yellow and blue bathing box is quoted to sell for “high $100s to low $200s”.

Read the full article here: http://www.news.com.au/heraldsun/story/0,21985,24852052-5013926,00.html