CPC Property

The Australian Bureau of Statistics (ABS) released housing finance data for November 2011 this week. The data showed that the number of owner occupier finance commitments (excluding refinances) increased by 2.5% over the month, marking the seventh time out of the last eight months in which they have improved. The flurry of refinancing activity over the past 18 months appears to be abating, with refinance commitments down -0.6% for the month, the second successive month in which they have fallen. The data also revealed that first home buyer activity is increasing. First home buyer finance commitments accounted for 20% of all owner occupier finance commitments and there were 10,136 first home buyer commitments over the month. In percentage terms, it was the highest proportion of first home buyers since February 2010 and in volume terms, it was the greatest number since December 2009. It would appear that interest rate cuts at the start of the month attracted a number of first home buyers in to the market.

Westpac and the Melbourne Institute released the results of the January consumer confidence survey this week. The Consumer Sentiment Index rose by 2.4% over the month to 97.1 points, the result shows that respondents remain more pessimistic than optimistic and it would appear that with the Index below 100 points for consecutive months that interest rate cuts alone have not been enough to improve sentiment. Respondents to the survey are most concerned about the state of their family finances over the last 12 months and the economic conditions over the next 12 months and five years.

The TD Securities-Melbourne Institute Monthly Inflation Gauge for December 2011 was released this week, preceding the official quarterly results which will be released by the ABS next week. The result showed a 0.5% increase in inflation in December following a -0.1% fall in November and a 0.1% increase in October. According to the Index, inflation has been fairly benign over the quarter, up just 0.4% and the trimmed mean has risen by just 0.2%. Based on these results it appears that the official rate of inflation is likely to be fairly low over the December 2011 quarter once released next week.

On Melbourne Cup Day, the Reserve Bank (RBA) delivered the first change to official interest rates in 12 months, reducing official cash rate to 4.5% from 4.75%. In their statement following the decision, the RBA Board stated: ‘Over the past year, the Board has maintained a mildly restrictive stance of monetary policy, in view of its concerns about inflation. With overall growth moderate, inflation now likely to be close to target and confidence subdued outside the resources sector, the Board concluded that a more neutral stance of monetary policy would now be consistent with achieving sustainable growth and 2–3 per cent inflation over time.’ Most home owners are likely to be happy about this decision with the average standard variable mortgage rate now recorded at 7.55%.

The Australian Bureau of Statistics (ABS) released building approvals data this week for September. Following a 10.7% jump in the month of August, approvals fell by -13.6% in September. After falling -0.5% in the previous month, private sector house approvals rose by 1.1% in September. Conversely, following a 32.8% increase last month, the more volatile unit approvals fell by -30.7%. Overall, total building approvals in September 2011 were -12.0% lower than 12 months ago highlighting the ongoing weakness in the new home market.

The RBA released lending credit aggregates last week and it showed that growth in housing credit remained fairly benign. Total housing credit increased by 5.7% over the 12 months to September 2011 with owner occupier housing credit rising by 6.1% and investor housing credit up just 4.6%. Although both measures have increased at a rate above annual inflation (3.5%), it is clear that growth in housing credit is fairly limited at this time.

THERE’S small and then there’s this apartment – a woman has spent three years living in a 8.3 square metre room in New York’s Upper West Side – so tiny the ceiling is less than 60 centimetres from her face when she sleeps.

The bathroom is so cramped that Felice Cohen has to sit on her side to use the toilet.

She told the Daily Mail the apartment felt so cramped on the first night she slept there, she suffered a panic attack.

However, three years on Ms Cohen says it’s been worth it, with her rent coming in at just $US700 ($672), while her neighbours pay around $US3000 ($2880) for a small apartment to live in the exclusive Manhattan enclave.

“I wanted to live in Manhattan, but I didn’t want it to take all my money and found this place through a friend,” said Ms Cohen.

“It’s a great location, its right near Central Park.”

Watch YouTube Version Here – http://www.youtube.com/watch?v=JZSdrtEqcHU&feature=player_embedded

Ms Cohen works as a personal organiser and quickly put her professional skills to the test in making the tiny sliver of space liveable. First she installed a desk with draws above and then removed the wardrobe doors and replaced them with a thin curtain. She stores fruit in a toaster oven, owns just two plates, one knife, fork and spoon and has cut down on personal items like clothing.

There is no kitchen but Ms Cohen has a hot pot and a small fridge to compensate.

“I guess I just think that people have too much space and so much stuff. I grew up in a house with two walk-in closets that are about as big as my entire apartment is now, but I’ve cut down,” she said.

“How much stuff do we really need? It’s less than you think.”