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Connexus : Issue 37
says his organisation isn't considering double-digit lending growth in its forward planning. "The market is shocking. We're experiencing a real slump, there's no doubt," he says. "I guess the reasons for that are not dissimilar to the others around the country. Just the degree of it is probably different from one state to another. " As the Reserve Bank battles to contain inflationary pressure from the commodities boom, predicted interest rate rises over the next 12-18 months will not help matters, says Nottage. Many of the Society's 100,000 members are struggling to see any flow-on benefits from the mining boom, but he's not as pessimistic as some about the property market's prospects. "We still have population growth and dwelling shortages, and the relative underlying strength of the WA economy. If you look at all those things collectively, they suggest this situation can't continue indefinitely. " Negativity 'overplayed' Mellor says negativity about the property market is probably overplayed. "I think it's a bit of a short-term breather and there's probably just a little bit of a lack of confidence out there," he says. Country First Credit Union general manager Denis Conroy says it's "pretty much a buyer 's market" in Griffith and Leeton, in the New South Wales Riverina. But he puts that down to uncertainty in the local economy, particularly around the lack of clarity over the future of vital water allocations in the area. Customers are streamlining their finances and seeking lower commitment levels to make life a little bit easier, says Conroy. "There seems to be a lot more consolidation or rearranging of the finances. " The news is not all bleak. In April the number of new owner-occupied housing loans rose 4.8 per cent to 47,342 commitments -- the first increase in four months. They were up 2.1 per cent in NSW, 4.1 per cent in WA and Victoria, and 6.2 per cent in Queensland. However, Australian Bureau of Statistics figures also showed the value of investment loans dropped a further 1.6 per cent in April, bringing the year- long plummet to 16 per cent. First home buyers have also failed to return: they slipped in April from 16 to 15.8 per cent of the market. That's well below the 10-year average of 18.2 per cent. Looking around the country, Mellor is tipping house prices in Sydney to significantly outperform inflation in the next three years. Due to previous high construction rates in South Australia, Adelaide prices "won't see significant growth" , and affordability is becoming an issue in Melbourne. "Melbourne will be one of the softest markets over the next three to five years because it has had a phenomenal run in the last 14 or 15 years, " says Mellor. In Queensland, several bouts of strong growth over the last decade mean affordability is a "major problem" . The recent widespread flooding has also rocked buyers' confidence. -- Carolyn Boyd is a freelance writer. "The news is not all bleak. In April the number of new owner-occupied housing loans rose 4.8 per cent. . . the first increase in four months." www.abacus.org.au 14 Connexus NEWS Events July 14 JULY Abacus AML Refresher Workshop, Sydney 18 JULY Abacus AML Refresher Workshop, Melbourne 24-27 JULY World Credit Union Conference, Glasgow, Scotland 27-28 JULY IQPC Payments Australia 2011, Sydney August 30 AUGUST Abacus Chairs' & CEOs' Forum, Sydney September 28-30 SEPTEMBER LexisNexis 21st Annual Credit Law Conference, Gold Coast October 20 OCTOBER International Credit Union Day 22-26 OCTOBER Abacus/AM Institute Convention, Cairns November 30 NOVEMBER Chief Financial Officers' & Financial Managers' Forum, Vic (3 days)