| Pre-owned home sales up 0.4% nationally
Existing-home sales rose slightly in November, a hopeful sign of stabilization in the wake of mortgage disruptions earlier this year, according to the National Association of Realtors, which performed the study. Across the nation, pre-home sales rose 0.4 percent to a seasonally adjusted annual rate of about 5 million units, up a bit from the 4.98 million units sold in October 2007. Still, the sales figures pale in comparison to the 6.25 million-unit level recorded in November 2006 -- representing a 20-percent drop. "Near term, existing-home sales should continue to hover in a narrow range, just as they have since September," said NAR economist Lawrence Yun in a statement released Dec. 31. "And that's good news because it will be a further sign that the housing market is stabilizing." Mortgage interest rates are near historic lows, and the most current data shows decelerating price declines, Yun said, along with a modest reduction in the number of homes on the market.
US rate cuts to boost house prices in Dubai, Abu Dhabi and Hong Kong
Hong Kong residents are perhaps more used to playing their property market than people living in the Gulf, whose freedom to buy has only emerged from relatively recent market liberalisation. They have therefore been quicker to recognise what lower interest rates mean for real estate and mortgage applications are up by 50 per cent; and to be fair the Hong Kong banks have also been much quicker to adjust mortgage products to take advantage of low interest rates. House price inflationBut lower finance costs ripple across the whole property development chain from land prices right through to secondary sales. If it is cheaper to finance development then profits are bigger. If home finance costs are falling, and look likely to fall further, then more buyers will enter the market. It is an upward price spiral or house price inflation that will result.
Banks engaging in anti-competitive behaviour: Choice
Australian banks and financial institutions are engaging in anti-competitive behaviour in the home loan industry, according to the consumer group Choice. Research from Choice shows extremely high mortgage exit and entry fees are often preventing borrowers from switching to a better deal on their home loan. Choice's director of policy and campaigns Gordon Renouf says these high fees are undermining the competitive interest rates being offered by independent lenders. "The problem is that if you see someone else with a quarter or a half a per cent better mortgage rate, you're going to be reluctant to change if you're going to be paying $1,000 or $2,000 to get out of your mortgage contract," he said. "It's going to take a while before you reap that money back from a lower rate." But the Australian Bankers Association chief executive David Bell says Australian mortgage fees exist to ensure proper background checks on borrowers take place.
Interest rate chest-beating is a con
Or are they playing to the crowd in the hope no one notices the holes in the arguments they make?Mortgage lenders deal in the commodity of money. Their business model is to lend monety to home buyers for more than they pay to borrow it themselves. The spread between their borrowing and lending costs, less their expenses determines their profits - which some say are too much.Wholesale money market rates are not set by the Australian Treasury or the Austyralian Reserve Bank.If the politicians really want to keep interest rates down, maybe they should arrange for the government to lend to home lenders at below market rates. Otherwise they should put up and shut up and let the market do its job of deflating the housing market.If house prices drop by an average of say 20% , they will be a lot more affordable to people, even if interest rates go up a few more times.
Lewis Hamilton plc - fans may get to buy a share in his success
The 22-year-old is apparently considering floating himself on the stockmarket, giving those same fans the chance to buy shares in his life – or at least his future earnings, which could be vast. The first black star in Formula One, his impact on the sport in his debut season has been compared to that of Tiger Woods in golf. A new set of deals look set to make Hamilton an unprecedented $1bn over the course of his career. And last night he revealed that fleeing the taxman is another reason for going to live abroad. His father, Anthony, and specialist advisers are considering a range of business moves. In one remarkable plan, a new company would be set up with the driver as both its major asset and shareholder – and sell off 10 per cent of its stock on the London stock exchange for about $100m.
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