BUDGET CHANGES FOR FIRST HOME BUYERS

NSW is set to have the most generous first home buyer scheme in the country - provided you buy a new house or apartment.

The state government announced changes in the budget to more than double the first home grant to $15,000 for buyers of new property priced up to $650,000.

However, buyers of existing property are in for a nasty surprise. The $7000 first home owner grant - in operation since 2000 - will cease to exist.

This move is designed to motivate buyers to buy new rather than existing properties.

First home buyers of new houses and apartments will also continue to be exempt from stamp duty and it will now apply to properties worth $650,000, rather than the $600,000 previously.

The budget changes mean that, from October 1, first home buyers who purchase a new home priced at $550,000 can save up to $35,240, which is close to $20,000 more than the previous saving.

As expected, the government has now ended the stamp duty concessions for non-first home buyers of new properties.

But by way of compensation, it will offer a $5000 grant to purchasers other than first-timers - investors, upgraders and downsizers - for new properties priced up to $650,000.

RESERVE BANK INTEREST RATE ANNOUNCEMENT

The Reserve Bank has cut interest rates today by 0.25 per cent.

The official interest rate is now 3.5 per cent.

The 25 basis point fall comes after a big 0.5 per cent cut last month that, as yet, has failed to make an impact.

The softness in the non-mining sectors of the economy has forced the Reserve Bank to move again today.  Many people are hurting and have been hoping the Reserve Bank would make the decision it has.

Each 0.25 per cent drop in interest rates slices about $60 off the monthly interest cost of an average Australian mortgage.

The cut may not be the last for the year. It has been predicted the Reserve Bank will cut rates by as much as 1 per cent this year, taking the official rate as low as 2.75 per cent.

The big question now is, just how much of today's rate cut will lenders pass on?

Last month the average cut delivered was 0.38 per cent, despite the Reserve Bank slashing rates by 0.5 per cent.

HOW TO WARM YOUR HOME

Oh to live in Darwin at this time of the year! Temperatures in that city this week are expected to average 32 degrees, with overnight lows of 21.
For the rest of us, the pre-winter chill is certainly starting to bite. As we move into the colder months, here are 10 ways to warm up your home.

1. Prune those sun-suckers

Shady plants are great in summer, especially on the north and western sides of your property. But at this time of the year you want to get as much sun into your house as you can. Now is the time to prune plants blocking out your sunlight, if possible.

2. Let the sun in
When the sun is shining, remember to open curtains and blinds during the day, especially on the northern side of your home, but also the east (in the morning) and the west (in the afternoon).
However, you might consider leaving south-facing blinds and curtains closed on days when it is colder outside than in as the sun won't hit those windows.
It's very common to see homes shut up all day long with the curtains drawn. But before you head off to work or out for the day, opening the blinds and curtains on windows that get the sun can mean coming home to a much warmer property.

3. Block the cold out
Overnight you want to stop the warm air from inside your home being lost through the glass of your windows. It's important to cover the windows to do this.
Either use thick curtains and a pelmet overhead to stop the air from getting to the window, or consider good-quality honeycomb (also known as cellular) blinds, which pull up almost out of sight during the day to let maximum sunlight in, but do a fantastic job of blocking the windows overnight, or on colder days when there is a lot of cloud cover.
The great thing about honeycomb blinds is you don't end up with the heavy look of thick curtains but still get the insulating effect. They do look a bit like they belong in an office and not a home though, and if that bothers you, you can layer them behind a very light sheer curtain to soften their impact. Or of course, for even more insulation, a heavier curtain.

4. Fan-tastic
If you have ceiling fans, now is the time to switch them over to winter mode so that they run backwards. Put them on their lowest speed and they will direct the warm air from across the ceilings where it sits high up, and down the walls.
If you get condensation on your windows overnight, you'll probably notice that leaving a fan on in winter mode during the day can help to dry the windows out faster.

5. Draughts be gone
Gaps around doors and windows can let in a lot of draughts. Block them up with an appropriate draught-sealer. Your local hardware store will have plenty of options.
Consider also a good old-fashioned door snake if you find it hard to seal the bottom of doors, which is often the case in older houses where steps may have worn, or doors are not quite square.
If you have particularly cold rooms in the home – the spare bedroom or laundry, for example, consider draught-sealing the door that separates that room or rooms from the rest of the home.
However, it is important to note that if you use unflued gas heating or an open fire, you will need to ensure you have adequate ventilation at home.

6. Monitor it
If you happen to be someone who is at home during the day, you'll have the opportunity to throw open the windows and let the warmth in on the days when it becomes hotter outside than in, which can often happen at this time of year.
It can be helpful to have a thermometer with an outdoor sensor set up in a prominent spot in the home to let you know when it is warmer outside than in. Hardware stores often stock them - I have one a bit like this. 

It will also come in handy in summer when you've got the opposite problem and you want to know when it has cooled enough to open the windows in the evening.

7. Go passive
A few months ago we installed a solar heater, which draws the warm air from the roof cavity into the home. 
I'm pleased to say it seems to working well at this time of year (when we hoped it would) helping to raise the home's temperature by a critical three-four degrees, meaning the heater has pretty much stayed off so far, even on cooler nights.
Because our home is well-insulated, draught-sealed and has honeycomb blinds on almost all windows, when it warms up during the day it manages to hold the temperature overnight.

8. They mightn't be pretty but...
Okay, I'll admit that old-style aluminium roller shutters are butt-ugly.
When we inherited two shutters on the '50s brick box we bought a year or so back, I was tempted to rip them off. But instead we gave them a paint job (a marginal improvement) and now find in winter, we wouldn't be without them.
When the shutter goes down about the same time as the sun it's like instant double-glazing, you can feel the difference because the shutter helps to provide an air pocket between our old single-pane glass windows and the cold night air.
They work so well I'm even tempted to put them on a few more windows.

9. Cook up a storm
It really is a time of year for baking and slow cooking. The house will definitely warm up, but will you be able to resist all that yummy food?

10. Control the thermostat
Running your heater at 18-21 degrees will keep you comfortable without toasting, and will also keep your winter heating bills down. Just one degree more in temperature can increase your heating costs by 15 per cent.

Reserve decision will boost rate of recovery

The Reserve Bank's decision this week to reduce official interest rates by 50 basis points is good news.
Falling rates and solid signs of an improving local economy provide the Sydney housing market with the prospect for increased buyer activity and further increases in median house prices this year.
Australian Property Monitors has recently reported that the Sydney median house price rose strongly by 1.4 per cent in the March quarter.

The city's suburban regions also recorded encouraging increases in median house prices during the quarter.
The only exception was the northern beaches, where prices were down marginally, by 0.5 per cent.
The top performer was the central coast, where median house prices rose by 5.7 per cent. The next best were Sydney's south, up 5 per cent, Canterbury-Bankstown, up 4.8 per cent, and the western suburbs, where median house prices increased by 4.3 per cent.
Despite the increases, price levels in some areas are still below those recorded a year ago.
The worst performer over the past year was the lower north shore, where median house prices were down by 6.6 per cent.
The city and east region fell by 5.3 per cent and the northern beaches was down 4.9 per cent compared with March 2011.
Several regions, however, have recorded increases in the median house price in the past year. The best was the upper north shore, which was up 1.9 per cent.
Sydney's west was up 1.8 per cent, while house prices in the south-west rose by 1.5 per cent over the year to March.

INTEREST RATE ANNOUNCEMENT

The Reserve Bank has cut interest rates by 0.5 per cent today.

The 50 basis point fall comes on the back of evidence the economy is struggling with weaker-than-expected inflation figures released late last month. The official interest rate is now 3.75 per cent.

It is good news for mortgage holders who were earlier this year hit with out-of-cycle rises by many lenders.

Each 0.50 per cent drop in interest rates slices about $120 off the monthly interest cost of an average Australian mortgage.

All eyes will be on the financial institutions to see if they follow suit. It is possible lenders could pass on a smaller proportion of the official drop to their own customers.

At least one bank will hold off announcing a decision for more than a week with the ANZ Bank set to release its move next Friday, the second Friday of the month.

If lenders do make cuts,  it is a smart idea for borrowers to maintain their current repayment levels.

Many institutions don't automatically adjust repayments down in line with lower rates, and if you think yours might, you should speak with them and ask for your repayment amounts to be kept as they are.

"It is inevitable that rates will rise again in the future, so this is a golden opportunity to pay some extra money off your loan if you can afford to do so."

The Reserve Bank has kept interest rates on hold today

The move was expected after the Reserve Bank governor, Glenn Stevens, recently indicated he is comfortable with lending rates at the moment.

Rates will remain at 4.25 per cent.

"We may well see further cuts this year but the Reserve Bank has decided that this month is not the time to deliver them. The move follows back-to-back rate cuts in November and December last year, and a decision to keep rates on hold in February.
Each 0.25 per cent drop in interest rates slices about $60 off the monthly interest cost of an average Australian mortgage.

After many major lenders lifted their rates out of cycle last month, all eyes will be on the financial institutions to see if they plan to deliver a second round of raisings.
The ANZ Bank will announce its move this Friday, the second Friday of the month. In February, lenders waited for the ANZ Bank to announce its decision before following suit. "Time will only tell if the same pattern is to be repeated," says Boyd.

INTEREST RATE ANNOUNCEMENT

In its first meeting of the year, the Reserve Bank has kept interest rates on hold today.

Many economists had bet the Reserve Bank would cut rates by 0.25 per cent due to worries about the economic situation in Europe. However, rates will remain at 4.25 per cent.

"Today's decision leaves the gate open for the Reserve Bank to cut rates should the situation in Europe sour," says Domain property expert Carolyn Boyd. The move follows back-to-back rate cuts in November and December last year.
Each 0.25 per cent drop in interest rates slices about $60 off the monthly interest cost of an average Australian mortgage.
Boyd says although rates have remained on hold today, mortgage holders might still be able to win themselves a rate cut by shopping around for a better deal from lenders. Some lenders are offering more than 0.9 per cent off their standard variable rate for borrowers who ask.
"Keep in mind what it might cost you to switch though," Boyd says. "While borrowers with new loans may no longer be liable for early exit fees (also called delayed establishment fees), people who took out their loan before July 1 last year could still be charged an exit fee by their lender. The ban on exit fees only applies to loans taken out since July 1, 2011. There are also other costs associated with refinancing such as government charges to discharge and register a mortgage."
However, securing a cheaper rate cut from another institution may mean you can recoup the amount you have to spend to refinance quite quickly, or you may be able to use the cheaper offer to negotiate a better deal with your existing lender.