ENERGY RATINGS AND SUSTAINABILITY ASSESSMENTS FOR EVERY HOME

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The economic indicators in the Noosa hinterland are positive. The number of sales being written by our Cooroy office has increased every month since May. Likewise, the average sale price in the hinterland is on the increase. Previous to the economic crisis it was sitting around $750,000, it dropped to about $550,000 and the 4th quarter 2009 it was back above $650,000. Sellers have embraced competitive pricing to stimulate the interest of buyers. The clearance rate of our Auctions is 50% and I anticipate following the trend set by the Southern markets, this clearance rate will increase in the coming months. The visitations to our open houses are also on the increase and the feedback from the people visiting open houses is that buyers have an intention of buying property in the next 2 or 3 months to take advantage of the prevailing buyers markets as they anticipate upward pressure on prices.

Segmentation is apparent in the marketplace; with the entry level performing at its best for the last 10 years and the middle market strengthening. The top end of the market is adequately supplied, with a small number of discerning buyers concentrating on the prime offerings that are well priced and actively marketed. Our principal, Murray Brown say's that while market conditions were improving, there was increasing competition for saleable listings, and his focus remained on maintaining a dominant position within the Cooroy and hinterland markets and ensuring that his agency offered the best possible option for sellers entering the market.

Rate rise not unexpected

The decision by the Reserve Bank to increase the cash rate from its emergency level of 3 per cent was not unexpected, according to the Real Estate Institute of Queensland (REIQ). The cash rate rise of 25 basis points to 3.25 per cent is a signal that after a year of uncertainty the Australian economy has started to turn a corner. "The historically low rate of 3 per cent was always going to increase once the economy started to rebound," REIQ managing director Dan Molloy said.

"Because we are not out of the woods just yet, the Reserve could have delayed the first increase until after the September quarter inflation figures were announced later this month." However, the Reserve obviously believes that recent economic data - including stronger than expected retail spending figures and the second increase in job ads in two months - was enough of a trigger to raise the rate now. "I don't think we'll see a rapid increase in rates so homeowners will certainly have time to readjust to repayments of a more usual level," Mr Molloy said.

"Lenders have also applied much tighter lending criteria to first home owners over the past six months which will help provide a buffer against rate rises." When the Reserve and lenders finished raising interest rates last year, housing affordability in Queensland was at historic lows. In June last year, 41 per cent of household income was required to meet the average loan repayment; that threshold is now 29.8 per cent.

"Housing affordability is not expected to reach the previous historically low level as interest rates eventually settle well below the 13-year high of 9.6 per cent last year," Mr Molloy said.