Looks like we're in a mortgage recession Australia!

Sales of mortgages continue to fall, prompting Australia's biggest mortgage broker to declare the nation is in a "mortgage recession".Australian Finance Group (AFG) says a count of mortgages brokered by its nationwide network fell sharply in June.The AFG Mortgage Index dropped 9.2 per cent to 5,939 mortgages in the month from in May, the company said.Over the year ended June sales fell 22 per cent, building on a 31.5 per cent fall in the May year.AFG, which has 10 per cent of the broking market, said its data showed that mortgages sales nationally had now had two successive quarters of negative growth.This suggested the market was in "mortgage recession", after sales fell from 23,143 at the end of the December quarter, to 20,543 in the March quarter and to 19,755 in the June quarter."We are calling it a mortgage recession," AFG general manager of sales and operations Mark Hewitt said."Interest rates are higher and the cost of money has risen because of the sub-prime crisis in the US, which has spread to the rest of the world."It means borrowers are really sitting on their hands and holding back in terms of major purchases like buying a home," Mr Hewitt told AAP.The 5,939 mortgages AFG sold in June totalled $2 billion, down from $2.6 billion a year ago.The Reserve Bank of Australia (RBA) has raised interest rates four times since August last year and the official rate now stands at 7.25 per cent, its highest in 12 years. At the same time, the commercial banks have raised their rates independently of the central bank, to offset their higher funding costs.Mr Hewitt said, with the RBA less likely to raise rates again this year, he was hopeful that the decline in mortgage sales had bottomed out."We're hopeful it has bottomed out or very close to bottoming out," he said."We're not forecasting anything but very modest growth over the next 12 months."The AFG data showed also that the average mortgage size increased by 7.5 per cent to $341,000 in June, from $317,000 a year ago.The biggest mortgage increases were in South Australia, which was up 13.5 per cent, and Queensland, up 11.7 per cent.New South Wales followed with mortgage size growth of 7.6 per cent, then Victoria with 6.1 per cent and South Australia with 2.6 per cent. Growth was steady in Western Australia.Mr Hewitt said the overall rise in the average mortgage size reflected bigger loans at the well-heeled end of the mortgage market."The upper end of the market is proving the most resilient - that is, buyers with significant equity in their homes and investment properties," he said."Many people who would normally be taking out smaller or medium size mortgages just can't afford to."AFG's figures showed also fewer people were taking out fixed rate loans, indicating most borrowers thought interest rates are likely to remain steady or fall.The proportion taking fixed loans fell to 11.5 per cent in June, from 13.7 per cent May.Demand for standard variable loans rose to 40.8 per cent, from 39.9 per cent.

Ian Usher

Unlike Ian Usher I am not interested i n selling my life. I am happy with this "work in progress" as I am learning many new things along the way.
The latest study I am undertaking in the field of property development is creating a "Rich life Mindset"
Regardless of what you have whether it's millions or zip, if you have a poverty mindset then thats where you remain.
So, Ian Usher, I ask you a question.
Will you be "wealthy" after you have sold your life or will you still remain poor?

New home sales

HIA chief economist Harley Dale said higher interest rates and rising petrol and grocery prices were affecting housing affordability and "at best" new homes sales would remain flat during 2008-09. The state with the biggest fall in April was Queensland, where new home sales slumped 9.4 per cent. For the three months to April, sales were down 7 per cent and were 14 per cent lower than in the year-ago period.In contrast, West Australian sales jumped 21.8 per cent in April. For the three months to April, WA new home sales were down 11 per cent and were 9 per cent lower than the same period a year earlier.Housing Industry Association WA executive director John Dastlik said it appeared the WA housing market had stabilised. WA's second biggest home builder, Dale Alcock, said falling house and land prices in the past few months had lured back first home buyers.New home sales in NSW eased 0.4 per cent in April and fell 4 per cent for the three months to April, but were 1 per cent higher than a year ago. In South Australia, sales climbed 14.7 per cent in April but were down 5 per cent in the three months to April.

from the Sydney Morning Herald

Bleak outlook for petrol prices.

Leading expert Richard Hindburg has predicted that oil prices will go over $200/barrel in 2 years (I predict much sooner than that) as global oil reserves have already peaked and production will (or already has) started to decline. The only answer to this situation is to redesign the economy to use less oil and allow the use of alternate technologies where oil or any other non renewable resource is not allowed.
But will our money based governments and economies allow such a drastic change to occur?

Job V Investment

Very few millionaires achieve their wealth from savings earned from a high paying job. In fact, it is difficult to get rich from your work. What are they doing that you're not?
The reality is that most millionaires are either investors or business-owners, not employees.
Saving your earnings to reach the $1 million mark is almost impossible. The low rates offered by banks, combined with rising inflation, make saving a poor strategy to reach the seven figure threshold. There is a reason that very few people ever actually save their way to a million dollar net worth.
The millionaire mindset expresses a completely different ideology towards an investment.
Millionaires look for the best possible return with minimal risk, while most investors simply look for the best returns. Wealthy people spend money differently... The millionaire views each and every purchase like an investment. They purchase assets.
Millionaires do work, but not for money. They work on systems, ideas, concepts that can leverage their time.
We all have one thing in common with everyone else... The same amount of time available.
Most people in the seven figure club got there by earning more than they needed to survive for
a number of years, while supplementing their fortune with consistent returns from quality
investments. Remember, the investor can make an infinite amount of money each year by putting money to work.
On the other hand, the employee who "saves money" is left with a job that can only pay so
much per hour and offer so many hours. Your opportunities are slim in the professional
world, but huge profits can be obtained with each investment dollar.
The investor can earn more in a year with a modest retirement portfolio than can be made
with a college education! Furthermore, future growth in earnings by investments is set by you.
Each time you roll your money over year after year, your principal grows, and the yearly
payouts rise as well. Very few professions accommodate for a 12% pay increase year over year.
Ultimately, there's only one solution. You either understand the fundamentals of investing and work towards becoming excellent... Or you can whinge and moan, working for a living for the rest of your life. Be prepared to put your ego aside, admit to yourself that life is not going as well as it should and start investing in your own financial intelligence now.

Will there be another interest rise?

Soaring food and fuel prices and interest rates have forced house hold grocery spending to be cut, the biggest cut in 20 years. Declining retail sales and softening property purchases, weaker credit growth is evidence of demand growth slowing under pressure from the tightest financial conditions in more than a decade. This evidence may be sufficient for the Reserve Bank of Australia Board to leave interest rates on hold. Food prices have soared by 12% in 2 years. The hospitality industry has been hardest hit with sales plunging by almost 6%.

Business visas

China is restricting business visas. The Chinese have been angered by the anti China sentiment from the west over Tibet and in retaliation anti west sentiment amongst the Chinese is growing. Foreign business people have been told that their business visas will expire on July 1, 2008 and as such must leave the country.
How can this impact on the Australian economy?
Taken to extremes if trade with Australia is cut drastically we will have to start relying on our own ingenuity and granted that prices will not be as cheap as products from China but I believe our quality will be superior and we will have a resurgence in new businesses and entrepreneurial projects.