To our valued customers here is our snapshot of the Australian economy and Melbourne property market today-:

**Board of the Reserve Bank of Australia, decided to leave the cash rate unchanged in June 2011

**Consumer confidence is mildly negative at present, while retail sales improved slightly in April, overall retail spending is lower and we are seeing retailers enter into an earlier than usual end of year sale campaign in attempt to combat a sluggish economy and increased competition from the online sector .

**Consumer savings are at an all time high.

**The residential market has now seen a sustained clearance rate in the high 50% range, which is the lowest level of confidence recorded since the GFC.

**Property values have softened in a number of market sectors and the number of properties sold in Melbourne has hit a five year low.

**Sales of new homes in April 2011 was 10% lower than for the same month in 2010.

**The ANZ Bank has indicated that there is now a glut of student accommodation and that the strong Australian dollar is likely to see apartment values undergoing a correction.

**The ANZ bank has also predicted no house price growth gains for at least a year, with the drivers of growth possibly gone forever .

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Our View

**The last 3 months have represented a great time to be in the newspaper business, there is no doubt in my mind that bad news sells more newspaper than good news.

**What is of interest is not so much the rhetoric being employed, but more the way that language is manipulated or slanted for a more sensationalist view.

**I think we can be sure, the media is extremely negative towards the economy at present and that is really projecting a level of fear.

**CMA believes that the property market is in a state of transition at present, clearly the uncertainty surrounding economic conditions in Europe and the US have compounded what is typically a seasonal slowing in the real estate market due to the colder winter months.

**The mining states of WA and QLD are driving the Australian economy at present, the remainder of the economy is sluggish and is without the direct benefit of government spending in the construction sector.

**Is the market likely to crash, unlikely to our way of thinking, China still requires our raw materials, unemployment remains at an all time low. These fundamentals are unlikely to change significantly anytime soon.

**We feel that activity is likely to remain sluggish until the warmer weather arrives in the spring.

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Property Facts:

**According to a 2005 ASIC survey, 70% of Australian Homes are underinsured.

**The ANZ's property team has indicated its concern about a potential over-supply of apartments in inner-city Melbourne, with 2013 as a most vulnerable period.

**Declining home ownership rates means one in four Australians won't own a home by the time they retire, research from an industry super fund suggests.

**The number of first home buyers taking out home loans has plunged to the lowest level in 17 years.

**Since the beginning of 2007, Melbourne dwellings have increased almost 50 per cent compared with growth of 27.8 per cent across the combined capital cities.

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Property Investment News:

**NRAS properties rent at a 20% discount to market rent and in return investors receive an annual tax free incentive of $9,140 indexed for 10 years.

**15.4% is the average allocation to direct property for DIY super funds.

**Wealthy clients who trade investments more than their peers tend to generate lower returns according to a survey by Barclays.

**Kew recorded an increase in median house prices of 366% for the 10 years to June 2011.

**Changes to the law have made it possible for DIY super funds to borrow to invest, however the average fund has a relatively small proportion of its assets in property.