Articles in Finance
Two of Australia’s Major Banks; National Australia Bank and Westpac Banking Corporation; do not require borrowers to provide a savings history prior to acquiring a mortgage. First home buyers grants are sufficient to cover a whole deposit.
First Home Buyer Government grants of up to $29,000 means borrows can obtain a mortgage up to $420,000 without having to contribute any of their own savings to a deposit, this is provided the borrower meets the usual income serviceability criteria.
Many lenders have introduced ‘genuine savings’ criteria’s asking borrows to provide evidence that they have contributed their own funds to the deposit.
STATEMENT BY GLENN STEVENS, GOVERNOR
At its meeting today, the Board decided to reduce the cash rate by a further 100 basis points, to 4.25 per cent, effective 3 December 2008.
Recent actions by governments and central banks to stabilise their respective financial systems have begun to take effect. Nonetheless, financial market sentiment remains fragile, as evidence accumulates of weak economic conditions in the major countries and a significant slowing in many emerging countries. Commodity prices have fallen further. This, combined with the likelihood of below-trend growth in the global economy, suggests that global inflation will moderate significantly in 2009.
The Australian economy has been more resilient than other advanced economies, but recent data nonetheless indicate that a significant moderation in demand and activity has been occurring. With confidence affected by the financial turbulence and a decline in the terms of trade now under way, more cautious behaviour by both households and businesses is likely to see private demand remain subdued in the near term. With that outlook, and with capacity pressures now easing, it is likely that inflation in Australia will soon start to fall. Global disinflationary forces will assist in this regard, though the depreciation of the exchange rate means that the decline of inflation to the target could take longer than would otherwise have been the case.
Taking advantage of direct property acquisition with your SMSF
This information was provided by Mark Bonney who is director of DAB Financial Solutions. They are chartered accountants, tax agents and financial planners.
The emergence of choice in directing where your superannuation contributions are to be paid, has led to an increase SMSF. One of the advantages our clients suggest for setting up a fund is that their direct involvement gives them control over their long-term wealth creation.
Naturally, taking on the position of trustee of your SMSF brings with it responsibility due to the onerous requirements of legislation.
SMSF can now Borrow
Previously, a SMSF was prohibited from borrowing.
STATEMENT BY GLENN STEVENS, GOVERNOR MONETARY POLICY
At its meeting today, the Board decided to lower the cash rate by 100 basis points to 6.0 per cent, effective 8 October 2008.
Conditions in international financial markets took a significant turn for the worse in September. Large-scale financial failures in several major countries were accompanied by serious dislocation in interbank markets and heightened instability in other markets, including sharp falls in share prices. Official actions in a number of countries have been aimed at restoring stability, by adding to short-term liquidity and laying a foundation for longer-term recovery in the health of balance sheets. Nonetheless, financing is likely to be difficult around the world for some time ahead. This is also affecting Australia, albeit by less than in many other countries, given the relative strength of the local banking system.
STATEMENT BY GLENN STEVENS, GOVERNOR
At its meeting today the Board decided to lower the cash rate by 25 basis points to 7.0 per cent, effective 3 September.
Inflation in Australia has been high over the past year in an environment of limited spare capacity and earlier strong growth in demand. In these circumstances, the Board has been seeking to restrain demand in order to reduce inflation over time.
As a result of increases in the cash rate last year and early this year, additional rises in market interest rates and tougher credit standards, financial conditions have been quite tight. Some further tightening has occurred over the past couple of months. Conditions in international financial markets remain difficult, with heightened concerns over credit persisting.
The evidence is that the tight financial conditions, in conjunction with other factors including higher fuel costs and lower asset values, have exerted the needed restraint on demand. Indicators of household spending have recorded subdued outcomes over recent months, and credit expansion to both households and businesses has slowed. Surveys suggest a softening in business activity and growth in production has slowed.
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