MORTGAGE LOANS – AUSTRALIA

Cost of home loan less than 2017: RBA

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Original article by James Glynn
The Australian – Page: 22 : 19-Sep-18

A number of Australian lender have increased their mortgage interest rates since the Reserve Bank’s last board meeting on 4 September. However, the minutes of the meeting note that the cost of financing a home loan remains lower than at the same time in 2017. The Reserve Bank also observed that bank funding costs are still low by historical standards. In addition, the Reserve Bank gave indications that the next movement in the cash rate is likely to be upward, although this is not expected in the near-term.

CORPORATES
RESERVE BANK OF AUSTRALIA

ANZ and CBA hike variable home loans rates

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Original article by Michael Roddan
The Australian – Page: Online : 7-Sep-18

The Commonwealth Bank and the ANZ both announced increases to their variable home loan rates on 6 September. The ANZ will increase its rates by 16 basis points as from 27 September, while the CBA’s 15 basis point increase will take effect from 4 October. Fred Ohlsson, the head of ANZ Australia, said the decision to lift rates was a difficult one, while CBA retail bank boss Angus O’Sullivan said it had lifted its rates after "careful consideration". The announcement by the ANZ and the CBA that they were lifting their rates prompted the Australian dollar to fall from $US0.7202 to $US0.7180.

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

Westpac hit with record fine on loans

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Original article by Clancy Yeates
The Age – Page: 25 : 5-Sep-18

Westpac has been hit with a fine of $35 million after having admitted to breaching consumer credit protection laws. The breaches occurred between 2011 and 2015, when Westpac used an automated system to approve 10,500 home loans. In settling its case with the Australian Securities & Investments Commission, which had been due to go before the Federal Court, Westpac agreed on 4 September that the loans should have been approved by a credit offer. ASIC had launched its case against Westpac over the loans in 2017.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FEDERAL COURT OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

Mortgage rates are going up as house prices are falling and that’s unusual à and a worry

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Original article by Stephen Letts
abc.net.au – Page: Online : 2-Sep-18

House prices are falling at the same time as mortgages are increasing, and this does not happen often in Australia; the last time it occurred was in 2008. Mortgage rates were higher at that time than they are now, while unemployment was lower back in 2008. As is currently the case, the main reason why banks increased their mortgage rates back in 2008 was due to funding costs, rather than because of Reserve Bank action. Paul Dales from Capital Economics says the three conditions that could see Australia face a recession or financial crisis in the next few years are currently all present: higher mortgages; falling house prices; and a tightening of credit.

CORPORATES
RESERVE BANK OF AUSTRALIA, CAPITAL ECONOMICS LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, SUNCORP GROUP LIMITED – ASX SUN, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANKWEST, ROYAL BANK OF CANADA

Watchdog’s growl could keep banks from following Westpac

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Original article by Richard Gluyas
The Australian – Page: 21 : 31-Aug-18

Jon Mott of UBS has suggested that the federal government could potentially increase the bank levy in response to Westpac’s move to increase its variable home loan interest rates. Mott adds that the other major banks may not increase their rates immediately as their net interest margins are under less pressure, while they may also be deterred by the Australian Competition & Consumer Commission’s focus on the banking sector.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, MORGAN STANLEY AUSTRALIA LIMITED

CBA to disclose fees to borrowers

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Original article by Duncan Hughes
The Australian Financial Review – Page: 8 : 31-Aug-18

Morgan Stanley estimates that about 43 per cent of the Commonwealth Bank of Australia’s home loans are sold via its network of mortgage brokers. CBA has advised that from now on its home loan customers will be fully informed as to how much brokers receive in commissions. The bank had previously not done so, telling the banking royal commission earlier in 2018 that the size of such commissions cannot be accurately calculated. CBA’s new disclosure standards will cover both upfront and trailing commissions.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. PRODUCTIVITY COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, COMBINED INDUSTRY FORUM

Move likely to delay RBA hike

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Original article by Ronald Mizen
The Australian Financial Review – Page: 7 : 31-Aug-18

Data from Bloomberg shows that financial markets view the chances of a reduction in the cash rate by the end of 2019 to be just 58.7 per cent in the wake of Westpac’s out-of-cycle increase in its variable mortgage interest rates. Shane Oliver of AMP Capital says the other major banks are likely to follow, which will in turn mean that the Reserve Bank is likely to leave the cash rate on hold until least 2020. Oliver and David Bassanese of Betashares Capital also suggest that the central bank could potentially reduce the cash rate if Westpac’s rivals increase their interest rates.

CORPORATES
AMP CAPITAL INVESTORS LIMITED, BETASHARES CAPITAL LIMITED, RESERVE BANK OF AUSTRALIA, BLOOMBERG LP, BIS OXFORD ECONOMICS PTY LTD, CANSTAR PTY LTD, ST GEORGE BANK LIMITED, BANK OF MELBOURNE LIMITED, BANK OF SOUTH AUSTRALIA LIMITED, RAMS HOME LOANS PTY LTD

Rates on the rise: Westpac takes first shot with interest hike

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Original article by Michael Roddan, Adam Creighton
The Australian – Page: 1 & 2 : 30-Aug-18

Sally Tindall of RateCity expects Westpac’s major rivals to quickly follow its lead in announcing an increase in its mortgage interest rates. Westpac has cited higher funding costs for its decision to increase the rates on interest-only and principal-and-interest loans for owner-occupiers and property investors from 19 September. Westpac CEO Brian Hartzer says the bank is of the view that higher funding costs are likely to be sustained for some time. The Reserve Bank has not increased official interest rates since August 2016.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RATECITY PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RESERVE BANK OF AUSTRALIA, MACQUARIE GROUP LIMITED – ASX MQG, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, AMP BANK LIMITED, BANK OF QUEENSLAND LIMITED – ASX BOQ, ING DIRECT, ME BANK, SUNCORP BANK, CITIGROUP PTY LTD, BEYOND BANK AUSTRALIA, AUSWIDE BANK LIMITED – ASX ABA, MYSTATE LIMITED – ASX MYS, QBANK, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIAN LABOR PARTY

Home buyers falling behind in repayments

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Original article by Michael Roddan
The Australian – Page: 21 : 20-Jul-18

The Northern Territory had the highest percentage of mortgage borrowers who were in arrears among all Australian states and territories in May 2018, according to Standard & Poor’s. Victoria and Western Australia recorded a decline in borrowers who were in arrears, while New South Wales and Queensland recorded an increase. Overall, the number of Australian borrowers falling behind on their mortgage repayments increased by two basis points to 1.38 per cent in May.

CORPORATES
STANDARD AND POOR’S (AUSTRALIA) PTY LTD, RESERVE BANK OF AUSTRALIA

House prices now set for sustained decline

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Original article by Matthew Cranston
The Australian Financial Review – Page: 31 : 12-Jul-18

A survey by the ANZ Bank and the Property Council of Australia has found that confidence in the nation’s residential property market has fallen sharply. The national survey of property professionals shows that there has been a significant rise in the number of respondents who expect a further decline in house prices, particularly in Sydney and Melbourne. Respondents were also bearish regarding the availability of finance, and ANZ’s David Plank says this suggests that building approvals will fall in the next 6-12 months.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, PROPERTY COUNCIL OF AUSTRALIA LIMITED, MIRVAC GROUP – ASX MGR, STOCKLAND – ASX SGP