MORTGAGE LOANS – AUSTRALIA

New housing loans drop 7.4pc in quarter

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Original article by Samantha Bailey
The Australian – Page: 19 : 13-Dec-18

A new report from the Australian Prudential Regulation Authority shows that $89.2bn worth of new mortgage loans were written in the September quarter, which is 7.4 per cent lower than previously. However, authorised deposit-taking institutions have reported a 5.4 per cent increase in the total value of housing loans in the year to September. Chris Bedingfield of Quay Global Investors says the annual rate of house construction is now too high, given that banks are tightening their lending criteria. He adds that the Reserve Bank is now more likely to reduce rather than raise the cash rate.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, QUAY GLOBAL INVESTORS, RESERVE BANK OF AUSTRALIA

ACCC hits big banks, ports, tech

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Original article by James Frost
The Australian Financial Review – Page: 1 & 8 : 11-Dec-18

The Australian Competition & Consumer Commission has concluded that the nation’s four major banks engaged in "synchronised pricing" with regard to increases in interest-only home loan interest rates in June 2017. The big four banks raised their interest rates following the Australian Prudential Regulation Authority’s decision in mid-March to cap interest-only loans at 30 per cent of all new loans from the September quarter. The ACCC estimates that the rate rises boosted the banks’ profits by around $1.1bn.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. PRODUCTIVITY COMMISSION, RESERVE BANK OF AUSTRALIA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Affordability issue persists in spite of falls

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Original article by Su-Lin Tan
The Australian Financial Review – Page: 33 : 7-Dec-18

The proportion of income needed to meet mortgage repayments fell by 0.8 per cent Australia-wide in the September quarter, according to the latest Adelaide Bank/REIA Housing Affordability Report. However, despite falling house prices, particularly in Sydney and Melbourne, housing affordability is down when compared to 2017. UBS has suggested that a looming credit crunch and more stringent lending conditions could restrict future buyers to loans that are no more than six times their household income; this means housing affordability may not improve even if house prices continue to fall.

CORPORATES
UBS HOLDINGS PTY LTD, MIRVAC GROUP – ASX MGR, STOCKLAND – ASX SGP, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, THE REAL ESTATE INSTITUTE OF AUSTRALIA LIMITED, ADELAIDE BANK

Mortgage customer satisfaction highest when obtained directly from bank branch

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Original article by Roy Morgan
Market Research Update – Page: Online : 7-Dec-18

New research from Roy Morgan shows that Australian home loan customers who obtained their loan in person at a bank branch had a satisfaction rating of 78.7% in the six months to October 2018, compared to 74.2% for customers who used a mortgage broker. Other channels also had lower satisfaction, including mobile bankers (75.3%) and telephone (77.7%). It is important to note that even among more recent home loans (held for under six years), satisfaction with going into a branch to obtain the loan was 80.9% compared to 76.1% for mortgage brokers. The satisfaction of mortgage broker customers of the big four banks is well below the rating given by those that have obtained their loan in person at a branch. The biggest gap in satisfaction is among ANZ mortgage customers, where those using a broker have only 63.4% satisfaction, compared to 76.2% for those who used a branch directly. Of the major home loan banks, Bendigo Bank is clearly the satisfaction leader when dealing in person at a branch with 91.2%. Satisfaction with home loan customers using mortgage brokers is highest for St George (86.9%). Roy Morgan’s Single Source survey is based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes, including over 12,000 mortgage holders.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BENDIGO BANK, ST GEORGE BANK LIMITED

No credit crunch: RBA blames investors for property slowdown

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Original article by Andrew White
The Australian – Page: 17 & 21 : 27-Nov-18

A regulatory crackdown on investor and interest-only property loans has seen growth in housing credit fall below five per cent in 2018, compared with around seven per cent in 2015. However, the Reserve Bank of Australia’s assistant governor Christopher Kent says high-quality borrowers can still gain access to credit at competitive rates. He notes that there appears to have been a larger fall in the average interest rate for investors than owner-occupiers in the last year.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. DEPT OF THE TREASURY

RBA in housing market warning

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Original article by Michael Roddan
The Australian – Page: 1 & 6 : 16-Nov-18

Apartment developers are increasingly having to seek funds from non-bank lenders as the major banks cut back on lending to the sector. The Reserve Bank’s deputy governor Guy Debelle says it is a trend that the central bank is keeping an eye on, warning that if it is overdone it could lead to a downturn in the housing market. Urbis recently reported that only 46 units were sold in new Sydney projects during the September quarter, compared to 381 sales of units in the previous corresponding period.

CORPORATES
RESERVE BANK OF AUSTRALIA, URBIS PTY LTD

Nearly one million mortgage holders experiencing mortgage stress

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Original article by Roy Morgan
Market Research Update – Page: Online : 22-Oct-18

New research from Roy Morgan has assessed the number of Australian mortgage holders who are in "mortgage stress", using a formula that takes into account household income, costs, and mortgage repayments. The research shows that 20.8% (949,000) of mortgage holders were "At Risk" in the three months to August 2018, down from 21.3% (974,000) In the three months to August 2017. Over the same period, the proportion of mortgage holders that are "Extremely at Risk" decreased from 14.9% (658,000) to 13.5% (596,000). These are the latest findings from Roy Morgan’s Single Source Survey, which is based on in-depth personal interviews conducted face-to-face with over 50,000 Australians per annum in their own homes, including over 10,000 owner-occupied mortgage holders.

CORPORATES
ROY MORGAN LIMITED

House prices about 30pc inflated with a loan cap

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Original article by Su-Lin Tan
The Australian Financial Review – Page: 38 : 16-Oct-18

Modelling by LF Economics suggests that house prices in Sydney and Melbourne could be "overinflated" by up to 30 per cent if mortgage loans were capped at 30 per cent of household income. Other capital city house prices are not as inflated under LF Economics’ modelling, which used data from CoreLogic and the Australian Bureau of Statistics. The modelling is line with other forecasts that Sydney and Melbourne house prices are set to continue to decline.

CORPORATES
LF ECONOMICS, CORELOGIC AUSTRALIA PTY LTD, AUSTRALIAN BUREAU OF STATISTICS, BRONTE CAPITAL MANAGEMENT PTY LTD, VARIANT PERCEPTION

386,000 mortgage holders have no real equity in their homes

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Original article by Roy Morgan
Market Research Update – Page: Online : 15-Oct-18

New research from Roy Morgan shows that 8.9% (386,000) of mortgage holders in Australia have little or no real equity in their home, an increase from 8.0% twelve months ago. This is based on the fact that the value of their home is only equal to or less than the amount they still owe, placing them at considerable risk if they have to sell while prices are trending down. Western Australia is the state at the highest risk, with 16.5% (90,000) of mortgage customers having no real equity in their home, an increase of 2.5% in the last year. New South Wales has the lowest proportion of mortgage holders with little or no equity in their home, at only 6.1% (82,000). These are the latest findings from Roy Morgan’s Single Source Survey, which is based on over 50,000 Australians per annum in their own homes, including more than 10,000 with owner- occupied mortgage holders.

CORPORATES
ROY MORGAN LIMITED

Westpac slashes new borrower rates

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Original article by Duncan Hughes
The Australian Financial Review – Page: 21 : 20-Sep-18

Westpac will increase its standard variable mortgage interest rates for existing customers by 14 basis points on 20 September, with several of its major rivals to lift their rates in coming weeks. However, Westpac will also target new home loan customers, offering rate cuts of up to 110 basis points for the first five years. Customers will then be offered a discount of 80 basis points for the life of their loan. National Australia Bank has yet to announce any changes to its interest rates for existing customers.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF MELBOURNE LIMITED, ST GEORGE BANK LIMITED, BANK OF SOUTH AUSTRALIA LIMITED