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Reserve Bank governor Glenn Stevens has signalled interest rates are on their way back up with mortgage rates likely to edge up between half and a full percentage point.

Giving evidence to the House of Representatives economics committee in Canberra, Mr Stevens said the RBA’s focus continued to be on what mortgage rates were offered by commercial banks rather than on the Reserve’s official cash rate.

He said given the commercial banks had lifted rates over and above what the RBA had done, there was still about a half and a full percentage point to go before mortgage rates were back to what the Reserve would consider close to their long term average.

“There’s a little distance to go yet before I think you could characterise the setting of interest rates as normal or average,” he said.

The RBA surprised markets by leaving official rates on hold at its February meeting.

Mr Stevens said on top of the Reserve’s own lift in official rates, the commercial banks actions had effectively delivered three and a half interest rate rises to mortgages cases, and in the case of Westpac customers, four rate hikes.

He said one of the advantages of lifting rates as the RBA did in the last three months of 2009 was that it could hold rates in February and get a clearer picture of how the economy was travelling.

“You get that luxury when you can wait a little a bit further down the line,” he said.

Mr Stevens said Australia had performed much better than even the RBA had expected out of the global recession.

But he warned that meant the economy was now heading into an upswing stronger than otherwise would have been the case.

“With the economy having had only a mild downturn with begin the upswing with less spare capacity than would typically be the case after a recession,” he said.

“There’s less scope for robust demand growth without inflation starting to rise again down the track.

“Monetary policy must be careful not to overstay a very expansionary setting.”

Mr Stevens said the resources sector in particular was looking to grow quickly, with the terms of trade likely to head back to the record highs seen in 2008 this year.

He also highlighted the strength of Australia’s sovereign debt position, hosing down fears the country was carrying too much debt.

“Australia’s position is by any measure very strong indeed,” he said.

The governor also played down fears raised by Opposition finance spokesman Barnaby Joyce that Australia could default on its debts.

Mr Stevens said Australia had never defaulted before and there were no signs it would now.

“I very much doubt there ever will be,” he said. 

“Monetary policy must be careful not to overstay a very expansionary setting.”

Mr Stevens said the resources sector in particular was looking to grow quickly, with the terms of trade likely to head back to the record highs seen in 2008 this year.

He also highlighted the strength of Australia’s sovereign debt position, hosing down fears the country was carrying too much debt.

“Australia’s position is by any measure very strong indeed,” he said.

The governor also played down fears raised by Opposition finance spokesman Barnaby Joyce that Australia could default on its debts.

Mr Stevens said Australia had never defaulted before and there were no signs it would now.

“I very much doubt there ever will be,” he said.

Source www.thewest.com.au

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THE average new mortgage in Australia has hit an all-time high of $367,000 according to mortgage broker Australian Finance Group.

But Queenslanders have been more conservative than the rest of the country, with the average new mortgage in Queensland sitting at $325,000.

The average home loan in New South Wales is now $433,000; in Western Australia it is $391,000 and $386,000 in the Northern Territory.

Australians have been increasingly taking on bigger mortgages, with the average new home loan 6.4 per cent larger than it was in May 2009.

Queensland bucked this trend, however, with new mortgages taken out in November $10,000 smaller than the previous month and close to the state’s January low of $323,000.

Home loans in both Victoria and New South Wales grew since May – up 12.1 per cent and 10.7 per cent respectively.

The news comes after the Reserve Bank of Australia announced on Tuesday that it was lifting the official cash rate for the third successive time.

The latest 0.25 per cent rise, when passed on by lenders, will cost home-owners with a $367,000 mortgage on a standard variable rate an extra $56 a month, while those slugged with a 0.45 per cent rate hike face an increase of $102 per month.

First-home buyers accounted for just 13.7 per cent of all new mortgages in November, down from their peak of 28.1 per cent in March.

Investors have been steadily returning to the property market over the past four months and represent a third of all new mortgages in November.

Of those who took out a new mortgage in November, only 2.1 per cent opted for a fixed-rate, down from 3 per cent the previous month.

Total numbers of new mortgages were lower than previous months.

Mark Hewitt of Australian Financial Group said: “October and November are seasonally strong months in the calendar, but we’ve seen two straight months of decline.

“Larger average mortgages and greater activity by investors are usually signs of a confident market but confidence is still fragile.

“We believe the RBA hiked rates too quickly and too soon.”

Source  :  www.thenews.com.au

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Chefs and hairdressers will top the list of most sought-after jobs as Australia emerges from the wake of the global financial crisis. It is thought that the highly transient nature of these jobs, with a high turnover and burnout rate, contributes to the skills shortage in these areas and the inability of supply to meet demand.

Other in-demand occupations will include health-care workers, educators, automotive and metal tradespeople, and IT professionals. The accounting and IT sectors are expected to experience high demand because of industry growth over the next two years.

Not so lucky are those in advertising, public relations and finance, as yet further job cuts are expected in these industries in the next couple of years. Those in marketing have been particularly hard-hit as companies slash marketing budgets in an attempt to stay afloat.

The construction industry has also been struggling as many building and development projects ground to a halt, leaving many construction workers out of work. However, with the Federal Government expected to fund new projects with its stimulus package until 2011, things could start looking up in the near future for the building industry. Industry insiders predict an impending resurgence and consequent shortage of construction workers and apprentices.
 
Some projections anticipate that unemployment will peak at around 7.5 per cent in mid-2010 to early 2011, but those sectors benefiting from public funding and the stimulus package – such as the health sector, education and infrastructure – should be well-protected and enjoy sustained demand.

Jobs such as chef, cook, hairdresser, automotive electrician, panelbeater, metal machinist, welder, bricklayer, carpenter, electrician, plumber, accountant, computing professionals and a variety of health care professionals (dentists, GPs, nurses and many others) all appear on the current Migration Occupations in Demand List (MODL) as the government attempts to fill in some of the gaps through skilled migration.

Not surprisingly given this outlook, enrolment in vocational courses in hospitality, hairdressing, automative trades and IT are up as students and job-seekers attempt to find work and fill the skills shortage gap. If you are at a career crossroads, trying to decide what to study or just trying to find a job, perhaps you, too, should consider jumping on the skills shortage bandwagon – and land yourself a job in the process.

Source  :  www.careerfaqs.com.au

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With the increasing interest in Britons looking to migrate to Australia, the   perth
health of the economy down under is an important topic.

Prime Minister Kevin Rudd will deliver his 2nd Federal Budget on the 12th
May and he is expected to spend big in order to stimulate the Australian
econ0my that has slowed but not been devastated from the current Economic
Crisis.

In his first budget last year, PM Rudd promised to follow the previous
Howard Government’s prudent economic practise of positive budgets and had
forecast a A$21bn Surplus. Then along came the economic turmoil of 2008 and
PM Rudd went on a massive spending spree to keep the economy afloat and try
and avoid the first Australian recession in over 14 years.

So far this has seemed to work with only a 0.1% retraction in the Australian
economy in the December 2008 quarter, and we can expect to see some major
spending and incentive programs announced in this years’ budget aimed at
further invigorating the Australian economy and maintaining it as one of the
worlds safe havens.

This could be good news for Australian property investors and intended
migrants, that continue to enjoy favourable access to finance and prices
that have stayed firmer than many other countries, including the United
Kingdom, but have come off to offer true value in the current market.

SMATS Group Chairman, Steve Douglas, will be conducting his Annual
Australian Budget Review Seminar in London on the 9th & 10th June and it is
an opportunity for UK based Australians and English citizens with an
interest in Australia, to hear a full analysis of the Federal Budget and
discuss how it may impact on their personal situation.

This seminar is part of a world tour for Mr Douglas who presents this
seminar in Asia, Middle East and the Asia, Middle Eas tand USA as well. “This annual event has
proven popular as we endeavour to explain the complex issues announced in
the budget in simple English that anyone can understand and then discuss how
it may influence property and financial markets so people can use the
knowledge to their advantage.”

SMATS Group is the largest firm in the world assisting Australian Landlords
and Intended Migrants with their Australian Taxation & Finance requirements.

www.australiamagazine.co.uk

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