It is being broadcasted on Foxtel Sky News Business Channel (channel 602) on Friday at 8pm. If you are not going to be home, set your IQ box to record it as there will be some interesting topics discussed.

Great article from www.smh.com.au  that goes through things that you need to look at when buying a property.

Click to play video

Use this checklist to identify potential problems or your dream property may prove to be a dud, writes Peter Boehm.

There’s no shortage of horror stories about people who have bought a property that looked fine on the outside but which, in fact, hid serious defects.

Major problems and faults can cost property buyers many thousands of dollars to fix (that’s if they’re fixable at all), not to mention the emotional strain of watching your ”successful” purchase turn into a disaster.

So how can you avoid buying a lemon? The rule, as always, is to buy your first home using your head, not your heart.

Step inside … look for downsides as well as upsides when evaluating a home.

This means ensuring you thoroughly and objectively assess properties for signs not only of existing problems but also problems that may occur down the track.

When inspecting a property, you should do two types of checks. The first is your own initial appraisal and the second – if you’re serious about the property – is to bring in the experts, who can ensure that the home is free from defects.

Informed … Loula Papasoulis with her son Dean outside their Rozelle house. Photo: Steven Siewert

Inspecting a property yourself

When inspecting a property, don’t just look at its upsides but be on the hunt for potential downsides as well. This will not only save you from buying a disaster waiting to happen but can also save you the cost of getting a professional inspection if you decide the problems are severe enough to know the property is not for you.

A good way to go about your inspection is to divide the property into three areas – the inside, the outside and the surrounding land and structures. The following is a list of things to look for; however, you should also add anything else you feel is important to review.

Insider’s tip: If you have friends or family who have recently bought a property or have expertise in this area, ask them to come with you. They may be able to give you some pointers on what to look for and, with less emotional investment in the result, they might be more objective.

Inside the dwelling:

Water pressure: Turn on the taps in the kitchen, bathroom and laundry. Check the pressure and colour of the water and how well it drains.

Damp: Check for stains, water marks and paint damage. Sellers will sometimes paint over damp to hide it, so use your sense of smell.

Cracks in the walls, or doors that stick: These can be signs of subsidence or movement. If the damage is severe, it may indicate a big problem that would cost thousands of dollars to repair.

Sticking windows: If windows don’t open and close properly, the frames may have warped (if they’re wood) or rusted (if they’re metal). New paint jobs can hide both. You can tell if wood is going to rot by pressing it with your finger – if it’s soft, there’s a problem.

Mould: If there’s mould in the bathroom, it’s usually a sign that there’s a ventilation problem that needs to be fixed. In addition, you’ll need to re-grout and repaint.

New paint: Paint is often used to hide faults. Run your hands over the walls and look at them from different angles to see if you can find any problems.

Bathroom: Check for damaged enamel and broken surfaces. Loose grout and cracked or lifting tiles can be signs of water damage. Check the plumbing and pipes for leaks.

Hot-water service: Ask about the age of the unit and how well it performs. Check for leaks and rust and ask when it was last serviced.

Insulation: If you can, look through the manhole into the roof to check the age and condition of the insulation and ask whether the walls are insulated.

Pests: Look for signs of pest trouble, such as rat or mousetraps or poisons. Sagging floors, springy floors and steps, as well as hollow-sounding beams, can all be signs of termite damage. If you’re serious about buying a property, you should think about getting a professional pest inspection.

Electrical wiring: Old-fashioned switches and sockets can be signs of old wiring that could need replacing.

Heating and cooling systems: Inquire about the age of the units, their service records and whether they are running well.

Floor coverings: Check the carpets for wear and tear and decide whether they’ll need replacing. Lift any rugs to make sure they’re not covering any damage.

Fly screens: Make sure fly screens are fitted where necessary and aren’t damaged. They can be surprisingly expensive to replace.

Kitchen and laundry:Check the age and quality of the benchtops and cupboards and make sure there’s room to accommodate all your appliances.

Decor: Changing the wallpaper or repainting is simple to do but can be expensive, especially if you hire someone to do it. Consider how much work needs to be done.

Renovations: If you’re planning to renovate, it pays to go a step further and check the ease with which tiles can be lifted and carpets removed. If you can, and it’s safe to do so, get under the house to see if floorboards can be polished or whether they need replacing. Check the quality of the fixtures and fittings to see what needs to be updated or restored. Think about how much work the kitchen and bathrooms will need.

Room layout: Make sure there are the right number of rooms in the right places, as well as sufficient storage to meet your needs.

Power points: Check that there are enough points in the right places and think about whether you’ll need to add more.

Furnishings: If you already have furniture, think about how it will fit with the property, whether you’ll need to replace it and how much additional furniture you’ll need.

Outside the dwelling

Orientation: Check which direction the house faces and whether the living areas will be too hot or cold.

Plumbing: Check the external pipes for leaks and rust.

Fuse box: Make sure it’s modern and meets safety requirements. If you have doubts, get an electrician to check the box and the house wiring before you buy.

Guttering:Look for leaks, rust, warps, holes and signs that the gutters overflow. Think about whether the leaves from nearby trees will cause problems. Check whether the downpipes and drainage are in order and fixed well to the stormwater drain.

Asbestos: Ask whether and where asbestos has been used. Most often, it’s found in walls, roofing and fencing. It is always best to have asbestos assessed and removed professionally. Inhaling asbestos dust can cause serious health problems so if in doubt, bring in an expert.

Roof: Check for missing, cracked or sliding tiles. A sagging or undulating roof can be a sign of underlying structural issues.

General appearance: Check the overall state of the building and look for damaged windows, cracks in the brickwork or cement work and whether it needs a new coat of paint.

Extensions: Check the quality of the workmanship on any extensions and ask to see the council approvals.

Termites: Ask whether the area is prone to termites or other insects and double-check what you are told with the local council. Check for termite damage wherever any wood touches the ground, such as along side walls, pergolas and decking.

Surrounding land and structures

Trees: Trees nearing the end of their lives can pose a danger and be quite expensive to remove. Check the age, condition and type of trees in the garden and check whether any trees – including those owned by the neighbours – have the potential to damage your property by falling down or dropping branches.

Garden: Check the general condition of the garden and consider how much work will be required to maintain or improve what’s there. Check whether there are sufficient taps for watering and whether the garden’s size and shape will meet your needs.

Privacy: If the property is overlooked by neighbouring houses, it can affect your enjoyment of your outside spaces. If the neighbours can see in, think about whether screens, fences or high-growing plants or trees might fix the problem.

Fencing: Check the fences and gates for damage. If repairs are needed, find out what your share of the cost will be.

External structures: Check carports, sheds, pergolas and decking to make sure they are stable and in good condition.

Pools and spas: Look for cracks or bulges in pool bottoms and sides and check lighting, filtration and heating systems. Check for evidence of leaks or repairs and the condition of the surrounding paving. Ask for evidence of any maintenance and servicing. Pool repairs can be expensive, so bring in an expert if you have any concerns.

Drainage: Wet or muddy patches in the garden can indicate poor drainage. Check for water damage on both the main property and any surrounding structures. These checks are imperative if the block of land slopes or is at the base of a hill.

Insider’s tip: It is often difficult to get approval from the local council to remove trees, something that can affect your landscaping and renovation plans.

After your inspection, reflect for a moment on what you’ve discovered. Document your findings and estimate how much any repairs will cost. Weigh up whether the costs outweigh the benefits of buying the property.

If you still want to proceed with the purchase, it’s time to bring in the experts.

An edited extract from The Great Australian Dream: A Guide to Buying Your First Home,by Peter Boehm (The Slattery Media Group, $25).

When it’s time to call in the experts

Property investor Loula Papasoulis wouldn’t dream of buying without getting a professional pre-purchase building and pest inspection done.

‘‘I wouldn’t drive a car without an insurance policy and I certainly wouldn’t buy a house or apartment without getting it checked out by a professional first,’’ Papasoulis, 40, says.

‘‘I like to go into a sale with my eyes open. It doesn’t usually deter me from buying the property, it just alertsme to any defects or any small maintenance issues that I can fix later.’’

In some instances, she has used the report to negotiate a better price. Before making her most recent purchase, she called on Tyrrells Property Inspections, which identified a leaking roof and a high risk for termites.

Although the report cost $1200, Papasoulis says it was worth it. ‘‘They gave us a written report and we also had access to the inspector prior, during and after the inspection,’’ she says.

‘‘He was really prompt in calling  us and along with some of the issues, he gave us positive buying points as to whether the property was basically sound and what maintenance would be required.’’

Hope you benefited from this post. Regards Justin

The Reserve Bank of Australia has announced their decision to cut the cash rate by a further 0.25% ahead of the Christmas and New Year period, as it seeks to stimulate economic activity amid mounting global headwinds. As Europe’s sovereign debt crisis gains steam and credit markets continue to freeze, the RBA board decided bringing the cash rate down to 4.25% with an extra quarter of a percentage point cut was necessary to buoy the local economy.

As expected, the Reserve Bank Board decided to leave rates unchanged at
4.75% at its October meeting.

However it is our assessment that the Board has now adopted an easing bias.
This is in sharp contrast to discussing the possibility of raising rates as
recently as the August Board meeting. The key to the easing bias has been
an improved outlook for inflation partly as a result of the downward
revision to the June quarter measure of underlying inflation and partly due
to evidence of softening demand. The key sentence in the statement is “an
improved inflation outlook would increase the scope for monetary policy to
provide some support to demand, should that prove necessary.”

That does not mean that the Bank is committing to a rate cut at its next
meeting in November. However, it does indicate that the inclination is now
towards cutting rates. Our view is that typically central banks do not
raise the prospect of lower rates without a strong body of evidence to
support a cut. That key sentence however is not as strong as we saw in
August 2008 when the beginning of the 2008/09 rate cut cycle was signalled
with “On these considerations, a case could be made for an early reduction
in the cash rate.” Accordingly, rates were cut by 25bps at its September
meeting which predated the Lehman Brothers collapse.

The overall commentary in the statement did not indicate to us that an
easing bias was eventually going to be adopted near the end.

Economic conditions were described as soft in both Europe and the United
States and the overall commentary on the Europe/US situation was not
particularly more down-beat than in September.

We were surprised that the recent turmoil in Asian financial markets was
not given more consideration with the theme which we saw in September being
retained, i.e. “It will take more time for evidence of any effects of the
recent European and US financial turbulence on economic activity in other
regions to emerge.”

On the domestic front, the observation made in September that the near term
economic outlook was not as strong as earlier expected was retained but in
contrast with the September statement, where the medium term outlook was
expected to be at trend or higher no commentary was given on the medium
term this time. The commentary on inflation was significantly more
confident than in September. This would partly reflect the downward
revision by the ABS of the underlying measure for the June quarter from
0.9% to 0.6%. The Board is now entertaining the view that the weaker
economic conditions are likely to contain inflation pressures with the path
for inflation now being more consistent with the 2-3% range for 2012 and
2013. The September quarter inflation print which will be released on
October 26 is now assessed as being very important for the inflation
outlook and the policy decision.

Other domestic data was generally softer with labour market conditions
being described as “now a little softer” and the Westpac-Melbourne
Institute Index of Unemployment Expectations getting some indirect
recognition with “households more concerned about the possibility of
unemployment rising.” Financial conditions are described as easing somewhat
due to slightly lower fixed interest rates which are, ironically, possible
due to the market predicting rate cuts, and of course the recent fall in
the exchange rate. However, it is still recognised that credit growth is
low and asset prices have declined.

Conclusion
Back on July 15 Westpac predicted a 25bp rate cut by December 2011. That
was despite all other economic forecasters which contribute to the
Bloomberg poll predicting rate hikes. The evidence from today’s statement
is that a cut as early as November is very much on the cards although a low
read on inflation, which is Westpac’s forecast, will not necessarily lock
the Bank into a cut in November given its emphasis on demand conditions.
With that in mind we are content to retain our December call whilst
recognising that the chances of November have increased substantially.

Reprint by Westpac Institutional Bank 4/10/2011

The RBA Statement in full:

Statement by Glenn Stevens, Governor: Monetary Policy Decision

At its meeting today, the Board decided to leave the cash rate unchanged at
4.75 per cent.

Conditions in global financial markets have continued to be very unsettled,
with uncertainty increasing about both the prospects for resolution of the
sovereign debt and banking problems in Europe, and the outlook for global
economic growth. While temporary impediments that had contributed to a
slowing in growth in some countries over recent months are lessening,
recent data suggest a continuing period of soft economic conditions in both
Europe and the United States. Moreover, the uncertainty and financial
volatility have reduced confidence, which could result in more cautious
behaviour by firms and households in major countries.

It will take more time for evidence of any effects of the recent European
and US financial turbulence on economic activity in other regions to
emerge. Thus far, indications are that economic activity is continuing to
expand in China and most of Asia. Nonetheless, recent events have led
forecasters to reduce their estimates for global GDP growth, which is now
expected to be about average this year and next. Prices for commodities
have declined over recent weeks, though in general they remain high.

Australia’s terms of trade are very high, which has increased national
income considerably. Investment in the resources sector is picking up very
strongly and some related service sectors are enjoying better than average
conditions. In other sectors, cautious behaviour by households and the
earlier rise in the exchange rate have had a noticeable dampening effect.
The impetus from earlier Australian Government spending programs is now
also abating, as had been intended. While there remain good reasons to
expect solid growth over the medium term, the indications are that the pace
of near-term growth is unlikely to be as strong as earlier expected, due
both to local and global factors, including the financial turmoil and
related effects on business confidence.

Underlying inflation stopped falling and began to increase earlier this
year. The Board has been concerned about the prospect of a further pick-up
over the period ahead, but over recent months has been weighing the
question of whether a period of weaker than expected conditions would
contain that pick-up in inflation. Recently revised data show a pick-up to
date in the underlying pace of price rises that was less sharp than
initially indicated. Moreover, with labour market conditions now a little
softer and households more concerned about the possibility of unemployment
rising, the likelihood of a significant acceleration in labour costs
outside the resources and related sectors is lessening.

Taking into account all the recent information, the path for inflation may
now be more consistent with the 2–3 per cent target in 2012 and 2013,
abstracting from the impact of the carbon pricing scheme. This assessment
will be reviewed on receipt of further data on prices ahead of the Board’s
next meeting. An improved inflation outlook would increase the scope for
monetary policy to provide some support to demand, should that prove
necessary.

The Board noted that financial conditions have been easing somewhat, with
interest rates for some housing and business loans declining slightly due
to increased competition and the fall in some funding costs in financial
markets. The exchange rate has also declined from the very high levels of a
few months ago. Credit growth remains low, however, and asset prices have
declined.

At today’s meeting the Board judged the current cash rate remained
appropriate. As always, the Board will continue to assess carefully the
evolving outlook for growth and inflation.

Article from Australian Broker News By Adam Smith | 10/08/2011 5:30:00 AM

St. George and ING Direct have joined the wave of fixed rate cuts, and an MPA Top 100 Broker has predicted an RBA cut may not be far behind.

Following moves yesterday by CBA and Westpac to make cuts to their fixed rate products, Westpac subsidiary St. George and second tier ING Direct have also announced discounts.

St. George has cut 20bps from its two and three-year fixed rate loans, following on from a 10bp cut at the end of July. The price decreases bring the bank’s two-year fixed rate to 6.69%, and its three-year product to 6.79%.

ING Direct has responded to moves from the other lenders with cuts to its entire stable of fixed rate products, with its one-year rate at 6.59% and its five-year product at 6.99%.

MPA Top 100 Broker Justin Doobov of Intelligent Finance said the move portends an RBA rate cut, and betrays uncertainty in the global economy.

“The market has now started to price in reductions of the cash rate in the coming months, hence the lenders reducing their fixed rates according to market indicators. Some of the extremely low fixed rates have further indicated that the market expects the cash rate reduction the next time the RBA meets, or even earlier,” he said.

Doobov, who regularly advises clients to fix part of their loans, nevertheless urged consumers to avoid the temptation of chasing cheap fixed rates.

“Choosing to fix your loans interest needs to be done in relation to your future needs and requirements. Don’t just fix the interest rate because it is cheap, fix it to give you certainty about your monthly repayments,” he commented.

With financial markets once again in turmoil, investors are understandably looking for a circuit breaker and wondering if central banks will once again come to the rescue. While many central banks don’t have much standard monetary policy ammunition to fire at the latest flare-up, the Reserve Bank of Australia is in the fortunate position of having ample ammunition up its sleeve. And the markets are confident that the RBA is about to use this firepower, and at one stage had priced in more than 180bps of easing over the next year. The question is what the RBA will make of all this. In our view, the nature of the current financial market volatility means that an emergency rate cut is very unlikely, and neither is a very aggressive rate cutting cycle in the next few months. But the RBA is likely to cut its growth forecasts, and so there is a small chance that the RBA may now concede that tight monetary policy is no longer required.

The “standard” share market rout

When looking at the financial market carnage unleashed by the downgrade of the US by S&P, the central bank of a small country like Australia will ask itself what is the nature of the crisis (of course the difference between the central bank of a large economy and a small one is that the policy of the Fed can change the direction of global markets whereas the RBA has to take that as given). If it is a “standard” share market rout — such as the tech wreck in 2001 — then the response for the central bank is quite straightforward. While a central bank won’t be concerned about the lower share prices per se, if the loss of household wealth undermines consumer and business confidence, and so presages a period of much weaker growth, then the central bank should cut rates. Similarly, if the collapsing share market reflects a major reassessment of the future profitability of companies (and so their willingness to invest and employ people) then this is relevant new information for the central bank and easier policy should be on the agenda.

Now, it is true that the larger the plunge in share markets, the greater the risk that confidence will be undermined and the more likely it is that central banks will have to respond to the changed circumstances. But in this “standard” share market fall scenario, the process of setting interest rates is no different than usual. That is, the lack of confidence will be reflected in surveys of business and consumer confidence. Retail spending will be softer and employment will start declining. And firms will start trimming investment plans.

In other words, the share market plunge will give the central bank an early warning of what might be about to come through, but the share market plunge itself is simply another one of those factors — along with fluctuating FX rates, commodity prices, inclement weather, government policy — that goes into determining the how fast or weak the economy is. And to be sure, the sensitivity of the central bank to the share market plunge will depend on how strong the economy is when that occurs. Thus, if unemployment is near 10%, then it would make sense for the central bank to react more to downside risks, than if the unemployment rate was 5%.

The “exceptional” share market rout

The second type of financial crisis is where markets themselves become dysfunctional. This was obviously the case in the global financial crisis, when funding markets for the financial system simply dried up. The point here is that the standard monetary policy procedure no longer operates. If a central bank waits to see data showing that retail sales have fallen, then it will be far too late to support the economy. In this situation, central banks have to be very pre-emptive.

With that background, how will the RBA view the current situation? Well, the starting point might well be that the current volatility is more akin to the “standard” share market plunge. Nothing new was revealed by the S&P downgrade. The banks are in a much sounder funding position than they were in 2008 — more capital, more stable sources of funding, better liquidity etc. Exchange settlement balances at the RBA have averaged around $1.1bn in recent days, compared to $6.5bn in mid 2008 and over $16bn at the peak of the GFC. And the RBA said on 9 August that while it is monitoring markets carefully, it has seen no strains in domestic money markets and that its daily operations were proceeding as normal. That is a big difference to 2008.

In this scenario, the plunge in equity values will dent confidence and so will lead to growth downgrades. But it is a judgement call as to whether the Australian growth outlook has deteriorated to such an extent that interest rates cuts need to be made, especially when taking into account other factors such as the much weaker exchange rate. (By the way, Macquarie thinks growth will be much weaker than forecast by the RBA, so we clearly think there is scope to cut rates. The question, however, is whether the RBA’s growth outlook has changed sufficiently). The second question is if the RBA thinks it is worthwhile undertaking a precautionary rate cut (a “just in case” cut). That is, whether it would be a one-off rate cut, as occurred in 1998, or the start of a string of rate cuts, as occurred in 2008.

But while the starting assumption might have been that this was just another “standard” share market collapse, there have been some recent developments which suggest that it could evolve into something more sinister. The VIX has soared, bank CDS have widened substantially and the intra-day moves in equity, FX, credit and interest rate markets are huge. And with such volatile markets, there is a greater risk that some financial institution sustains large trading losses, which heightens risk aversion and reinforces this negative momentum. None of these developments imply that the financial sector is as vulnerable as it was in 2008. But clearly there is a risk that things could continue to deteriorate. And if they did, then the RBA would have to respond.

What will the RBA do?

All that said, what will the RBA do? First, we think the chances of an intermeeting rate cut by the RBA are very low. Even in 2008 when markets were completely dysfunctional, the RBA didn’t change policy outside of its usual meeting timetable. With the acute pressures in the global banking system that were present then, not apparent now, we see no reason to think that the RBA will move policy outside of its scheduled meetings. The one potential exception to this is if the RBA participated in a co-ordinated policy easing by global central banks. But the problem here is that the banks that would lead that monetary policy easing — the Fed, the Bank of England, the Bank of Japan — haven’t got any scope to cut rates. And given that, we don’t think a fall in Australian interest rates would do much to calm global financial markets.

So if the RBA does cut rates, it is most likely to come at a regular policy meeting. But how soon and how far would rates fall? The biggest risk to the RBA’s growth forecast is the outlook for mining investment. As the RBA said in its recent Statement on Monetary Policy, around 2/3 of growth is expected to be driven by mining investment. So from the RBA’s perspective, the key risk is that weaker global growth undermines Chinese activity and commodity prices, and this results in resources companies revising down their investment plans. While global growth expectations will fall noticeably — a decline from 4¼% to 3½% seems distinctly possible — it is less clear how China will fare and whether the demand for commodities will be much affected. At the same time, the RBA has been optimistic that the nature of the investment projects — very large projects with long-term price contracts and scheduled deliveries — means that investment has to proceed despite the vagaries of global growth.

Even so, the RBA’s confidence in those mining investment forecasts must have weakened. And of course, the RBA will be running the red pen through its forecasts for consumer spending and housing activity. That, in turn, means that the employment outlook must also have weakened. The RBA has tried to depict monetary policy as being marginally restrictionary at present. And so, it could be argued that the changed outlook suggests that monetary policy should be at least neutral. That would point to a modest 25-50bps rate cut, but not the very aggressive easing of policy factored in by markets. In effect, the RBA could describe it as a precautionary rate cut that will be reversed if the global economy stabilises. This would be analogous to the RBNZ’s rate cut after the Christchurch earthquake.

The other important factor for the September Board meeting is that the RBA will have the results of the latest Capex survey. Firms were surveyed in July and August about their expectations for the next year. And so while the survey — which will be released on 1 September — won’t fully capture the impact of the latest financial market volatility there will be some impact. And a sizeable downgrade in investment expectations would provide evidence that easier policy was warranted. It should also be noted that the two previous occasions when financial market volatility triggered RBA interest rate cuts — in 1998 and 2008 — they also followed a substantial downgrade to the investment outlook in the Capex survey.

In summary, the current outbreak of financial market turbulence clearly has implications for RBA policy. The global and domestic growth outlook will need to be downgraded as consumer and business confidence declines. But while the current crisis could evolve into another global financial crisis, the RBA’s comments about the smooth functioning of money markets (at least so far) indicates that we are not in that position now. This suggests that an intermeeting rate cut by the RBA is not likely. And also that very aggressive rate cuts are not likely at this stage. Indeed, in our view, there is still a sizeable hurdle for the RBA to overcome before it would concede that rate cuts are necessary.

For that reason, we think that the chance of an RBA rate cut at the September Board meeting is probably around 25%. Last week, we would have said that a rate cut in September was very unlikely, so that is a big change in a week, but it’s still far from being the central scenario. At one stage, market pricing suggested the RBA would cut rates by 180bps over the next year, which would have taken the standard variable mortgage rate back down to the lows it reached in 2001 and 2009 at around 6%. But unless the RBA starts to think that mining investment is poised to collapse and is seeing unemployment rising rapidly, we don’t think the RBA would be comfortable in turning the monetary policy lever to maximum thrust.

Policy in 2012 is another story. We think that some parts of the retail sector are near the point at which they will start shedding labour. And as the unemployment rate starts rising, this will force the RBA to confront the prospect of pushing rates into expansionary territory. And if the mining boom also disappoints, then the RBA could easily be entering a standard rate cutting cycle next year.

But why is market pricing entertaining the possibility of such an aggressive easing in the short term? One suggestion is that the Australian interest rate market is one of the few in the world where you can bet on a central bank cutting rates aggressively in response to the current financial market volatility. In effect, global traders could be using Australia as a proxy for the global economy. And that has certainly been a profitable strategy for many investors recently. But, ultimately, the RBA retains control of the cash rate. And while investors have to respect the market, the market has to respect the central bank, as they can remain solvent longer than the market can remain irrational.

This research has been issued and distributed in Australia by Macquarie Equities Limited ABN 41 002 574 923 (“MEL”). MEL holds Australian Financial Services Licence No. 237504 and is a Participant of the Australian Securities Exchange Group. MEL is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959 and MEL’s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of MEL. This research has been prepared for the use of the clients of Macquarie Group Limited and its related entities (the “Macquarie Group”) and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient, you must not use or disclose the information in this research in any way. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. There are risks involved in securities trading. The price of securities can and does fluctuate and an individual security may even become valueless. International investors are reminded of the additional risks inherent in international investments, such as currency fluctuations and international stock market or economic conditions, which may adversely affect the value of the investment. This research is based on information obtained from sources believed to be reliable but we do not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. No member of the Macquarie Group accepts any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. The Macquarie Group or its associates (including MEL), officers or employees may have interests in the financial products referred to in this report by acting in various roles including as investment banker, underwriter or dealer, holder of principal positions, broker, lender, director or adviser. Further, they may act as market maker or buy or sell those securities as principal or agent and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group or its associates (including MEL) may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The analyst(s) principally responsible for the preparation of this research receives compensation based on overall revenues, including investment banking revenues of Macquarie Group Limited and its related entities. This research has been issued and distributed in New Zealand by Macquarie Equities New Zealand Limited (“MENZ”) an NZX Firm. Macquarie Private Wealth’s (MPW) services in New Zealand are provided by MENZ. Macquarie Bank Limited ABN 46 008 583 542 (“MBL”) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. Neither MBL nor any member of the Macquarie Group, including MENZ are registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act 1989. Any Macquarie subsidiary noted in this document is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia). That subsidiary’s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. Disclosures with respect to issuers, if any, mentioned in this research are available at www.macquarie.com.au/disclosures, or can be obtained from your Macquarie representative. © Macquarie Group

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You would think that with so many real estate agents leaving the industry because of hard times, those remaining would be bending over backwards to secure all the business they can.

Going that extra mile, so to speak.

With reports that up to 10,000 real estate agents, about one in six, have had to up stakes and look for employment elsewhere in the last year, industry leaders are wondering what to do to keep morale up.

Advertisement: Story continues below Real estate trainer Glenn Twiddle, who has a passion to make his industry better, argues agents are their own worst enemy – offering poor service to sellers and next to no follow up with buyers.

He set out to prove his point recently with a secret shopper campaign at real estate open houses, and the results are not good.

Glenn and his team visited 102 open homes, primarily in southeast Queensland, posing as buyers with instructions to give the agents whatever contact details they requested.

Here is a summary of the results:

One agent got more details than just a mobile number;
Seventy-two agents made no follow up at all after the open home;
Two followed up on the day of the open home (the standard that is trained);
Two followed up on more than one occasion after the open home;
Eighty-three of the agents made no attempt to try to sell the property in any way;
Most agents handed out property brochures but only one had outstanding property promotional material (extra info, DVD, video tour etc); and
Four agents did not even show for the open home.
These statistics are appalling!

It is a good idea to secret shop the agents in your area before you list.

Statement by Glenn Stevens, Governor: Monetary Policy Decision

At its meeting today, the Board decided to leave the cash rate unchanged at 4.75 per cent.

The global economy is continuing its expansion, led by very strong growth in the Asian region, though the recent disaster in Japan is having a major impact on Japanese production, and significant effects on production of some manufactured products further afield. Commodity prices have generally softened a little of late, but they remain at very high levels, which is weighing on income and demand in major countries and also pushing up measures of consumer price inflation. In response, a number of the countries with stronger expansions have been moving to tighten their monetary policy settings over recent months. Overall, though, financial conditions for the global economy remain accommodative. Uncertainty over the prospects for resolution of the banking and sovereign debt problems in Europe has increased over the past couple of months, which has been adding to financial market volatility.

Australia’s terms of trade are reaching very high levels and national income has been growing strongly. Private investment is picking up, led by very large capital spending programs in the resources sector, in response to high levels of commodity prices. Outside the resources sector, investment intentions have been revised lower recently. In the household sector thus far, there continues to be a degree of caution in spending and borrowing and a higher rate of saving out of current income. The impetus from earlier Australian Government spending programs is now also abating, as had been intended.

The floods and cyclones over the summer have reduced output in some key sectors. As a result there was a sharp fall in real GDP in the March quarter, despite a solid increase in aggregate demand. The resumption of coal production in flooded mines is taking longer than initially expected, but production levels are now increasing again and there will be a mild boost to demand from the broader rebuilding efforts as they get under way. Over the medium term, overall growth is likely to be at trend or higher.

Growth in employment has moderated over recent months and the unemployment rate has been little changed, near 5 per cent. Most leading indicators suggest that this slower pace of employment growth is likely to continue in the near term. Reports of skills shortages remain confined, at this point, to the resources and related sectors. After the significant decline in 2009, growth in wages has returned to rates seen prior to the downturn.

Overall credit growth remains quite modest. Signs have continued to emerge of some greater willingness to lend, and business credit has expanded this year after a period of contraction. Growth in credit to households, on the other hand, has softened, as have housing prices. The exchange rate remains, in real effective terms, close to its highest level in several decades. If sustained, this could be expected to exert continued restraint on the traded sector.

CPI inflation has risen over the past year, reflecting the effects of extreme weather and rises in utilities prices, with lower prices for traded goods providing some offset. The weather-affected prices should fall back later in the year, though substantial rises in utilities prices are still occurring. The Bank expects that, as the temporary price shocks dissipate over the coming quarters, CPI inflation will be close to target over the next 12 months.

At today’s meeting, the Board judged that the current mildly restrictive stance of monetary policy remained appropriate. In future meetings, the Board will continue to assess carefully the evolving outlook for growth and inflation.

Statement by Glenn Stevens, Governor: Monetary Policy Decision

At its meeting today, the Board decided to leave the cash rate unchanged at 4.75 per cent.

The global economy is continuing its expansion, led by very strong growth in the Asian region. The recent disaster in Japan will have a noticeable effect on Japanese production in the near term, although the impact on the broader Asian region is expected to be limited. Commodity prices, including oil prices, have risen over recent months, pushing up measures of consumer price inflation in many countries. A number of countries have been moving to tighten their monetary policy settings. Overall, though, financial conditions for the global economy remain accommodative.

Australia’s terms of trade are at their highest level since the early 1950s and national income is growing strongly. Private investment is picking up, mainly in the resources sector, in response to high levels of commodity prices. In the household sector thus far, in contrast, there continues to be caution in spending and borrowing, and a higher rate of saving out of current income. The natural disasters over the summer have reduced output and the resumption of coal production in flooded mines is taking longer than initially expected. Production levels should, however, recover over the months ahead, and there will be a mild boost to demand from the rebuilding efforts as they get under way.

Asset values have generally been little changed over recent months and overall credit growth remains quite subdued, notwithstanding evidence of some greater willingness to lend. Business balance sheets generally are being strengthened, and the run?up in household leverage has abated.

Growth in employment has moderated over recent months and the unemployment rate has held steady at 5 per cent. Most leading indicators suggest further growth in employment, though most likely at a slower pace than in 2010. Reports of skills shortages remain confined, at this point, to the resources and related sectors. After the significant decline in 2009, growth in wages has returned to rates seen prior to the downturn.

Inflation is consistent with the medium-term objective of monetary policy, having declined significantly from its peak in 2008. These moderate outcomes are being assisted by the high level of the exchange rate, the earlier decline in wages growth and strong competition in some key markets, which have worked to offset large rises in utilities prices. Production losses due to weather are temporarily raising prices for some agricultural produce, which will boost the March quarter CPI, but these prices should fall back later in the year. Overall, looking through these temporary effects, the Bank expects that inflation over the year ahead will continue to be consistent with the 2–3 per cent target.

At today’s meeting, the Board judged that the current mildly restrictive stance of monetary policy remained appropriate in view of the general macroeconomic outlook.

Referenced from www.rba.gov.au