We Buy Houses 4 Cash

After you spend half a lifetime paying off a house is it a good idea to then hock that home to a bank to fund your retirement? This is a question being faced by a growing brigade of older folk.

Reverse mortgages have been around for some years now and are slowly being taken up by a limited number of people. About 390 new loans are written across the country per month – a fairly small number compared to about 60,000 new housing loans a month to owner-occupiers in Australia.

In five years, the reverse mortgage market has more than doubled, albeit off a tiny base. As of last year there were about 38,000 reverse mortgages in Australia, up from 17,000 in 2005.

It’s a quandary that may face a growing number of retirees who don’t have adequate superannuation to keep them going after they stop working.

Craig Hall, from the National Centre for Retirement Investments, says the $2.6 billion industry has done a fair bit to clean itself up. It formed an industry body, Sequel – Senior Australians Equity Release Association, and Hall says that as long as the reverse mortgage meets all the requirements in the association’s voluntary code of conduct, it may be worth considering after all other funding avenues have been explored.

Hall isn’t saying reverse mortgages should be a first point of call though – more like a final option when all other ways of raising cash such as downsizing, renting out of the family home and moving into a smaller rental yourself, returning to part time work, selling off other assets, dipping into the Federal Government’s pensions loans scheme, or even borrowing from the family, have been exhausted.

“Providing that the consumer actually understands how the contract works and what these conditions are and they’ve explored other options in terms of raising capital, then it’s an option that we don’t consider is a bad thing, it can be quite a good thing in retirement especially if it is increasing the standard of living,” says Hall.

Some lenders offer a “no negative equity guarantee”. This means that if the balance of the loan exceeds the proceeds of sale of the property, no claim for this excess will be made against the estate or other beneficiaries of the borrower. It is important the contract be examined thoroughly as this guarantee may be subject to certain conditions.

Christopher Zinn, spokesman for consumer group CHOICE, says reverse mortgages can help some people some of the time but there are risks attached to them. “That’s why we’ve developed what we think should be the minimum contract standards to avoid some of the very sticky situations that people have gotten into,” he says.

The CHOICE minimum contract standards are:? 1. The no negative equity guarantee (NNEG) applies even if you’re in default of the contract. ?2. No fixed loan term – the borrower can repay the loan at any time. But unless you’re in default of the contract, the lender can only request repayment when the house is sold, you move into long-term aged care or you die. ?3. The lender can’t ask you for partial repayments during the course of the loan. ?4. You must get independent legal advice before signing. ?5. The mortgage company and the lender participate in an Australian Securities and Investments Commission-approved dispute resolution scheme.??

The CHOICE good-practice standard requires that default conditions are clearly defined and the contract does not include any condition that puts you in the danger of default for breaching a minor, unspecified clause in the terms and conditions or contract. Some providers’ contracts and terms and conditions are complicated and at times difficult to understand, which could lead to catastrophic consequences if failure to adhere to a minor clause is considered a default condition. If you’re in default, the lender can potentially force you out of your home and sell it.

How will you fund your retirement? If you are nearing retirement, have you saved enough, or will you be forced to sacrifice your house?

BANKS will be forced to slash excessive home mortgage exit fees as part of a joint crackdown being planned by regulators and the Rudd Government.

As part of the moves the Australian Securities and Investments Commission will outline a new fee structure for banks to stop them charging what are deemed excessive mortgage exit fees that can be as high as $1000.

Banks that continue to charge excessive fees will be prosecuted under new consumer credit laws due to take effect from July 1.

It follows a class action announced last week against banks over other fees that has attracted thousands of bank customers eager to solicit damages from the case.

The Sunday Mail believes the new exit fee regime will allow banks to charge only what it costs them when a loan is paid out or face prosecution for having an unfair contract.

Treasurer Wayne Swan is also understood to have requested a review of the powers of the Australian Competition and Consumer Commission in relation to banks.

The review is designed to take steps to ensure the competition watchdog has all the powers it needs to control anti-competitive practices between the banks. The Government is believed to be concerned about the ability of smaller banks to compete.

A spokesman for Mr Swan said the Government’s goal was to make the banking system work for families not against them. Mr Swan promised to do something to make it easier to switch mortgages two years ago and has faced criticism from consumer group Choice for failing to act.

Victorian first homebuyers buying newly constructed homes will have up to $4000 extra to put towards a deposit from July 1.

In its 11th budget, released on Tuesday, the Victorian government has announced it will extend the first homebuyers bonus for another 12 months.

The first homeowners scheme has been revised so that money currently available to all first homebuyers will be channelled exclusively to those building or buying newly constructed homes. Those buying existing homes will be $2000 worse off under the new changes.

An extra $4000 will be available to first homebuyers buying newly constructed properties in regional areas, taking their total entitlement to $26,500. Those buying in metropolitan Melbourne will receive $2000 extra, up to $20,000.

First homebuyers purchasing existing properties will still be eligible for the $7000 first homebuyers grant under the federal scheme.

Police and hospitals have emerged the big winners in the 2010/11 election year budget as the government makes a bid for a fourth term.

The government is forecasting an $872 million surplus next year on the back of an economy recovering strongly from the global financial crisis.

Business is also a winner, with $461 million in tax cuts announced to help stimulate jobs growth. From July 1 the payroll tax rate will be cut from 4.95 per cent to 4.9 per cent, saving business $193 million over four years.

WorkCover premiums will be slashed by 3.5 per cent over the same period, delivering savings of $240 million.

The government also has announced land tax exemptions during the construction phase of new retirement villages, residential care facilities and homes for people with disabilities.

Treasurer John Lenders said 31,000 businesses would benefit from the payroll tax cuts.

“Victoria will now have its lowest rate of payroll tax in 35 years,” he said.

Health will receive a record $4 billion boost, including $1.7 billion for more hospital services and better healthcare and $1.2 billion for cancer treatment.

More than a year on from the Black Saturday disaster that killed 173 people, the government has committed $136 million to prepare the state for the next bushfire season.

The money includes a $35 million upgrade of incident control centres across Victoria and $28 million to improve bushfire warnings.

The government earlier committed an extra $561 million to recruit 1700 new police over five years. More than $100 million will be used to redeploy an extra 266 desk-bound police to the frontline.

The government will embark on a $9.5 billion infrastructure program next financial year which it says will help secure and create 30,000 jobs.

The biggest component of the infrastructure splash is $4.3 billion for a dedicated line for regional trains travelling through Melbourne’s western rail corridor.

More than $270 million will be invested in a schools package, delivering building projects for 553 schools across the state.

Mr Lenders said a strong investment in infrastructure had enabled Victoria to bounce back from the global recession stronger than any other world economy.

* Article contributed by AAP

Update The Reserve Bank has again slugged the nation’s borrowers, raising its key interest rate today for the third month running as it moves to keep inflation in check.

The central bank lifted its cash rate by a quarter of a percentage point to 4.5 per cent, its highest level since the end of 2008. The move was tipped by a majority of economists after surges in consumer price inflation and house prices in the March quarter.

For mortgage holders on variable lending rates, today’s 25-basis-point increase will add about $46 to the average monthly payment for a typical 25-year, $300,000 home loan, if it is passed on in full by the commercial banks.

The Commonwealth Bank was the first to move, announcing its standard variable mortgage interest rate will rise 25 basis points to 7.36 per cent from Friday. The ANZ is among banks saying it is reviewing interest rates.

The RBA has again showed its readiness to act regardless of the political cycle, raising its rates even as the federal government readies its budget ahead of next Tuesday’s release. Australia was one of the first economies to begin raising interest rates as the global economy steadied last year, thanks in large part to the rapid recovery in its main trading partners in Asia, particularly China.

Pause a chance?

The RBA cited increasing demand flowing into the economy from the reviving mining boom as part of the reason behind today’s rate move. It hinted, though, that it may take a breather to monitor the effects of the string of six rate rises since October.

”The (RBA) Board expects that, as a result of today’s decision, rates for most borrowers will be around average levels,” RBA governor Glenn Stevens said in a statement accompanying today’s decision.

The RBA slashed its key cash rate to just 3 per cent last year, its lowest in almost 50 years, as Australia joined all major economies in stoking demand to counter the global financial crisis.

”There might be scope now for the bank to pause and assess what the impact of these recent increases have been on the economy,” said Robert Brooker, NAB’s head of Australian Economics & Commodities.

”They say they’ll continue to assess the prospects for demand and inflation but they haven’t made any clear statement that a further upward adjustment is imminent,” Mr Brooker said.

Even if the RBA does hold off in June, the pause may only be temporary as the central bank adjusts to a higher inflation rate than it had been tipping. Its own inflation gauge remained just above its 2-3 per cent target range at the end of March – even before the economy’s recovery hits full stride.

“Importantly they are now talking about inflation in the upper half of the target range over the coming year, so that is an important shift,” JPMorgan chief economist Stephen Walters told Reuters.
 
”Before they were talking about inflation around the middle, so they have clearly upgraded their inflation projections. They are talking now about average, that interest rates are back to average.”

Mr Walters predicts the RBA will lift its key cash rate to 6.25 per cent by end of next year: ”There is still a long way to go, but stage one is finished.”

Outlook improves

Signs of a strengthening domestic economy include a falling unemployment rate and rising prices, particularly on the home front. House prices jumped 20 per cent in capital cities in the year to March, the biggest jump in 20 years, the Australian Bureau of Statistics reported yeseterday.

The RBA noted that the outlook internationally is also on the improve, even though conditions in Europe ”remain quite weak.” It cited the Greece bailout – which now totals about $160 billion – but said ”to date, there has been very little contagion outside Europe” from that country’s troubles.

”In Asia, where financial sectors are not impaired, growth has continued to be strong, contributing to pressure on prices for raw materials,” Mr Stevens said in the RBA statement.

The terms of trade – the relative prices of Australia’s exports to its imports – are rising more than the RBA expected and this year ”will probably regain the peak seen in 2008,” prior to the financial crash, the bank said.

The RBA made no mention of the federal government’s proposal for a ‘’super profit tax” of 40 per cent on mining companies, announced by Prime Minister Kevin Rudd on Sunday.

The central expects rising commodity prices to ”foster a build-up in investment in the resources sector,” helping the overall economy to expand faster this year than last.

The banks are easing the credit squeeze for dome domestic borrowers, although conditions for some sectors “remain difficult,” the RBA said.

Credit for housing, meanwhile, has been expanding at ”a solid pace,” even though new loan approvals for housing have ”moderated over recent months as interest rates have risen and the impact of large grants to first-home buyers has tailed off,” the bank said.

”Nonetheless, at this point the market for established dwellings is still characterised by considerable buoyancy, with prices continuing to increase over recent months,” the central bank said.

Sixth since October

Today’s interest rate rise marks the sixth increase since October. The string of rate hikes – broken only by the summer break in January and February’s pause – is aimed at discouraging excessive borrowing as economic growth returns to more normal levels.

Before today’s rates verdict, investors were pricing in at least four interest rate increases over the next 12 months, which would bring the RBA’s cash rate – the starting point for banks when they calculate standard variable and other lending rates – to 5.25 per cent.

Financial markets took today’s RBA move in their stride. The Australian dollar lost ground at around the time of the RBA release but bounced back to 92.4 US cents. Stocks retreated in late afternoon trading, easing to be about 0.8 per cent down for the day.

More young Australians see themselves as lifelong renters as the dream of home ownership fades, a new survey has found.

The prospect of onerous debt has soured the hopes of more than half of Generation Y members surveyed in an April poll of new home buyers and perspective purchasers.

Data released by the Mortgage and Finance Association of Australia and Bankwest show that is up more than 10 percentage points on the same survey carried out in November. Respondents who said they were woried about debt rose to 52.8 per cent from 39.9 per cent over that period, the data show.

“We have never seen such pessimism amongst prospective first time buyers throughout the past five indexes,” said Vittoria Shortt, chief executive of Bankwest Retail. “Seventy per cent of respondents were very concerned about the level of debt they will be committed to if they buy a property.”

One in three Generation Y respondents, those born between about 1980 and the early 1990s, said they expect to be permanently locked out of housing market.

Young Australians’ fading home ownership hopes come amid a 12.7 per cent increase in home prices in the year to February, which have taken the national median home price to $455,000, according to RP Data/Rismark.

The average income-to-loan size ratio today is almost 6 times, compared to 3.5 times in 1998 on Fujitsu Consulting calculations, as home-price rises outstrip gains in income.

Young would-be buyers appear to be giving up on hopes of scratching together a deposit for a home loan, as well.

“Of those delaying home purchases, fewer are asking families to help fund a home loan deposit,” said MFAA chief Phil Naylor, noting that the figure has dropped from 20.4 per cent in November to 14.7 per cent in April.

The poll, commissioned by MFAA and Commonwealth Bank-owned Bankwest and conducted by market research group brandmanagement, is based on the responses of 900 existing home owners and prospective buyers taken from March 9 to March 18.

The boom is coming but you’ll just have to be patient, and it won’t be like the last one, a leading economic forecaster says.

With the resources industry in full swing again, many have already used the “b” word to describe economic conditions in the state.

But leading economic pundit BIS Shrapnel has been less bullish than most.

Its latest report on civil construction work, released today, shows that while the state will see $25 billion in work done this financial year, a 12 per cent rise on 2008-09, the value of that work will drop in the next two years.

It won’t be by much – about $1 billion – but it will be in the period where one big gas project is completed, and another even bigger one starts.

BIS economist Adrian Hart said the pause was due to the Pluto project finishing, with a lull before the mammoth Gorgon project starts.

In effect Pluto, and iron ore expansions, had tided over the state through the global financial crisis.

“The strong growth occurs a little bit later than most people are talking about, but it’s an issue for contractors and construction companies now, to have enough resources when the work ramps up again,” he said.

The value of construction work in WA had snowballed from about $3 billion a year in 2000, to $22 billion last year.

“We’re starting the next cycle at a much higher level than it has ever been, but to expect the growth levels we’ve had in recent years over the next five years is fanciful. We just won’t have the resources or people to bring it all on,” Mr Hart said.

“We would be happy to eke out single-figure (percentage) growth. The years of double-digit growth year after year after year are over.”

Fear of missing out has buyers paying inflated prices, reports Chris Vedelago.

The numbers
It’s official. Melbourne’s property market is booming. Improbably, wildly and recklessly booming.

Buyers, spooked by last year’s soaring prices and the threat of more to come, are swarming into the market in record numbers and they’re willing to pay often vastly inflated prices to avoid missing out.

“We’ve just seen the strongest March quarter since 2003,” said Enzo Raimondo, chief executive of the Real Estate Institute of Victoria.

“Things usually ease off in the first months of a new year, but this time the market really hasn’t taken a break. It’s picked up pretty much where it left off at the end of 2009.”

Historically, the March quarter is the weakest time of the year, with both buyers and vendors cautious about jumping into the market after the Christmas hiatus.

Stock levels are typically low, the properties for sale are in the lower price ranges, competition for what is available is weak and, consequently, Melbourne’s median house and apartment prices fall.

But the opening months of 2010 have set this trend on its head. Across virtually every market indicator — price growth, sales volumes and the auction clearance rate — the March quarter of 2010 has posted the strongest performance of any March quarter in the past seven years and, in some cases, set records.

Melbourne’s median house price fell just 2 per cent to $524,500 in March, compared with a drop of up to 8.9 per cent seen in previous years. The last time the market better weathered the December to March doldrums was in 2003, when the price fall was just 1 per cent.

Even more impressive, the median apartment price grew by 2 per cent — the highest growth rate on record for March since 2002 — to hit an all-time high of $450,000, according to the REIV.

Another new benchmark was set in the auction market, with the clearance rate rising to 85.5 per cent this year. The previous high of 80.7 per cent was set in 2007.

Reports coming in from estate agencies also confirm just how unusually active the market has been. Property listings are up, open-for-inspections are overflowing, and auctions are pulling in huge crowds, with some numbering in the hundreds.

Hocking Stuart reportedly sold $450 million worth of property in March, up 68 per cent on 2009 and falling just shy of the agency’s sales record set in October 2007. “From our numbers, it was certainly our strongest opening quarter,” chief executive Nigel O’Neil said. “It would be the strongest opening quarter ever for market as well, I would imagine.”

And this stunning performance has come despite the Reserve Bank of Australia raising the official interest four times between October and March, and the commercial banks adding even more on top. This stronger-than-expected quarterly showing has also had a dramatic impact on longer-term price growth.

Melbourne’s median house price rose by nearly 30 per cent from $405,000 to $524,500 in the year to March, according to REIV figures.

The result was almost as impressive for apartments, with the metropolitan median price growing by 25 per cent from $360,000 to $450,000. “You have to remember that March 2009 would have represented the bottom of the market with the global financial crisis,” Mr Raimondo said. “That’s a very significant increase in 12 months.”

Much of the growth at the metropolitan level was driven by rising demand — and therefore sharp price rises — for properties valued above $500,000, which was a stark reversal on buying patterns the year before.

Back then, the lower end had acted as the engine of growth, thanks to low interest rates, the boosted first home owners grant and the battering delivered to the pricier inner-city markets during the financial crisis.

In fact, prices at the top end of the market grew at more than double the rate of those at the lower end in the year to March. The strong performance shows that any potential tempering effect from rising interest rates hasn’t yet been enough to outweigh the enormous pressure put on the market by soaring demand, which is being driven by rapid population growth (1800 people a week come to Melbourne), the relaxation of foreign investment rules and the continuing shortfall in new housing construction.

The reaction
Numbers alone can’t convey just how heated things have become at the coalface, especially the sense of desperation and panic-induced buying that seems to be gripping the market right now.

Sales in the high-value, auction-dominated inner and middle suburbs have become brutal slugging matches that routinely involve up to a half-a-dozen bidders, many of whom show a disturbing willingness to push prices well above any reasonable assessment of a property’s true market value. And that’s the key point that many buyers seem to be missing: what you pay for a property is not necessarily what it is worth.

“The strength of prices has gone beyond what’s been anticipated or justified,” said Charter Keck Cramer analyst Robert Papaleo. “There’s a real urgency to get into the market. A fear of the unknown: Will the market keep rising?

If it does, am I going to be locked out again? Just as much as there has been an overreaction on the downside [during the global financial crisis], there’s been an overreaction on the upside.” Unrealistic, unjustifiable, unsustainable are the words frequently used to describe the prices being paid in this market, a warning that things just can’t continue in the same way.

“What is happening now is not natural,” said Craig Dres, chief executive of mortgage brokers Alliance Financial Group. “A property that sells for 20, 30, 40 or 50 per cent above its reserve — that’s just not sustainable. “The RBA governor [Glenn Stevens] has warned people, more than once, what lies ahead. That he doesn’t like what he sees and he’s going to put on the brakes.”

It’s expected that the RBA will move the official cash rate from 4.25 per cent to somewhere above 5 per cent over the next year, depending on inflation, the general economic situation and the pace of house price growth.

That would raise mortgage lending rates to at least 8 per cent. “I think [the interest rate] will be fairly well tolerated into the mid-to-high 8s. If it goes into the 9s that would be the beginning of the tipping point,” said Monique Sasson Wakelin, director of Wakelin Property Group.

“Prices won’t drop, but the level of growth will start to stagnate. That’s a [good] scenario because it means the market becomes predictable . . . and it makes it easier for someone to buy into the market.”

Then there’s the issue of worsening affordability, which can also play a big role in putting the brakes on the market. “Price levels will get to a point where people start dropping out of the market,” Mr Papaleo said.

“The best example of that is what happened in Sydney in the middle part of the decade. It got to a price point that was too expensive for most people, became static and stayed static for a good couple of years.”

House prices

Unit Prices

Source: REIV

The stress associated with moving is drastically reduced with careful planning. If you fail to plan you plan to fail, regardless of how far you’re planning to go. These handy tips will help is run smoothly.

It’s possible a move ‘around the corner’ could be more stressful than a move interstate if it hasn’t been planned properly.

Start planning your move as soon as possible. It’s generally more appropriate to divide your moving plan into timeframes. Remember this helps because there will always be delays so it’s best to prepared and build this into your plans.

Confirm your moving date and work backwards. Think in terms of time chunks:

* Three months to go
* Two months to go
* One month to go
* Two weeks to go
* The day of the move

A number of reputable removalist companies have excellent planning services to assist you and organisations, such as the Australian Furniture Removers’ Association, (AFRA) also offer invaluable advice – especially with regard to commonly asked questions, and what you should expect from a moving company.

Dramatically higher resource prices have emboldened the Reserve Bank to lift interest rates for the fifth time in seven months, making it clear there is no end in sight.

The bank’s decision to lift its cash rate from 4 to 4.25 per cent pushes most bank standard variable mortgage rates well above 7 per cent, adding a further $48 to the monthly cost of repaying a $300,000 mortgage and $64 to the cost of repaying a $400,000 mortgage. This brings the total extra costs since October to $187 and $250 a month.

Acknowledging that the process would continue, Treasurer Wayne Swan said the economy was strengthening and the Reserve Bank would ”continue to take its decisions as it assesses economic conditions month by month”.

”I know that’s cold comfort for a lot of families and a lot of people in business,” Mr Swan said. ”But it is a painful and uncomfortable fact that with a strengthening economy, unfortunately we see rates returning to more normal levels.”

The Reserve Bank was heavily influenced by two massive resource deals – BHP’s 55 per cent increase in the price of coking coal sold to Japan and the Brazilian producer Vale’s 90 per cent increase in the price of iron ore sold to China.

It believes that if these price-rises hold or are extended, the economy will be exceptionally strong in the two years ahead and will not need support from below-average interest rates.

”There is barely a word of weakness in the bank’s statement,” said IPAC Securities economist Adam Carr. ”It thinks the housing market is still buoyant and that’s the only sign of weakness in an otherwise bullet-proof economy.

”If the bank isn’t going to pause now, then logically there is little to prevent a May, and even a June, hike. Clearly the risk to this view is more rather than less. The one thing I think we can rule out is sustained pause from here.”

Westpac economist Bill Evans agreed. ”They haven’t finished raising rates. The statement points to concerns with the stimulatory impact of the rising terms of trade overriding any doubts about the housing and consumer sectors.”

Each of the big four banks will lift its mortgage rates by 0.25 points, with most lifting their credit card, business rates and deposit rates as well.

An earlier outsized move by Westpac leaves its standard variable mortgage rate the most expensive at 7.26 per cent and National Australia Bank the only bank below 7 per cent with a rate of 6.99 per cent.

Credit Union Australia remains far cheaper than any of the majors after cutting its rate by 0.25 points late last month. Late yesterday it was considering how to respond to the Reserve Bank’s move, but should it merely pass on the 0.25 point increase as the banks have done, its standard variable mortgage rate will be 6.62 per cent.

Ahead of the banks’ moves Mr Swan warned that any bank that did more than pass on the Reserve Bank increase would be ”arrogant in the extreme” and suffer retribution from customers.

He said that while someone with a $300,000 mortgage would be paying more, they would still be paying $500 less a month than before the Reserve Bank began cutting rates in response to the global financial crisis in late 2008.

Mortgage rates peaked at an average of 9.36 per cent in September 2008 and had reached 8.57 per cent when the Coalition left office in late 2007.

Job advertisement figures released as the Reserve Bank board met showed reliance rising a further 2 per cent in March, with newspaper ads slipping just 1 per cent after climbing a record 13 per cent in February.

Source: The Age

You know there’s a shortage of land when people are camping out for days just to get their very own bricks on a piece of earth. What happens if you’re not a camper I wonder, are you destined to rent forever? Live in a caravan?

Around the country, vendors are hoping that if the population keeps growing at twice the rate of the rest of the world and housing supply keeps up not keeping up, that purchasers will soon be camping out for established homes too. If it gets to that, let’s pray they are homes with big front yards, or at least very wide nature strips to fit all those pop out tents. And, ahem, that there is some public conveniences nearby. Otherwise it won’t just be the neighbourhood dogs who are unpopular.

Of course, that would need a switch from home auctions and back-and-forth phone bids to a supermarket-deli-style take a ticket. That’s not likely to happen for established houses, so the nature strips of Australia will be safe for while yet. Except perhaps those in Bondi and other popular beach suburbs habituated by grey nomads who really have opted to live in a caravan.

There’s no doubt that in Australia’s bigger cities, at least, a lack of supply and soaring demand is pushing house prices further higher. It’s a scene that would hardly have been fathomable 12 to 14 months ago.

With rates back on the agenda when the Reserve Bank board meets next week, on the first Tuesday in April, continuing strong demand for property and the prices people are paying are certain to be issues discussed around the table. The board has already indicated house prices played a strong role in last month’s 25 basis point increase. And the Reserve Bank governor has been on television this week, warning about high property prices. Glenn Stevens said “high” property prices were an issue of concern, especially as they are creating an affordability issue for younger Australians.

Camping out for land though, isn’t necessarily about getting the cheapest plot. The developer has already done their sums and put a firm figure on it, they are just holding out for the converted to take a ticket.

Let’s wait until next week to see where interest rates are headed. Although, it’s not so much a question of where, more a matter of when, unless the economic problems that are still plaguing much of the rest of the world suddenly start to impact Australia again. At this stage, the Reserve Bank is talking about normal rates of 5 per cent. We are at 4 per cent now, after last month’s 0.25 per cent increase.

In the meantime, I’m pondering how most people got their place? Did you have to resort to desperate measures to get a deal? Our first house we picked up before the last boom. The silly season was in full swing and most other people were busy partying. We put an offer in and negotiated between Christmas and New Year. The vendor held out, but so did we. Eventually, probably seeing a dry couple of months ahead as other would-be buyers took off on summer holidays, they gave in. We were lucky, we picked the smallest house in the street of family homes.

Our second place, we loved the area, loved the street. The place was partly a “renovator’s delight” that we were way too keen to buy. I still wonder what the rush was, we probably could have got it for a better price had we held back. But that’s what happens when you fall in love.

Would you camp out for a block of land? Or are you the type who just stumbles upon gold nuggets of properties in the middle of a rush?