MORTGAGE LOANS – AUSTRALIA

Foreign banks fill lending void

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Original article by Scott Murdoch
The Australian – Page: 23 : 30-Nov-16

Data from the Australian Prudential Regulation Authority shows that the average mortgage balance has risen from $A244,000 in 2015 to $A255,000. However, the value of new home loans grew by only 0.1 per cent year-on-year in the September 2016 quarter. A recent move by Australia’s major banks to reduce their lending to residential developers has also seen the value of offshore banks’ lending to local developers rise from $A1.49bn to $A2.65bn in the last year. Meanwhile, data from the Housing Industry Association shows that sales of new detached homes and apartments fell by 8.2 per cent and 9.2 per cent respectively in October.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, HOUSING INDUSTRY ASSOCIATION LIMITED, MORNINGSTAR PTY LTD

Get your next home loan by video session

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Original article by James Eyers
The Australian Financial Review – Page: 20 : 24-Nov-16

Hashching is conducting a pilot program for a biometric identity verification service which is to be used in processing mortgage applications. As the program complies with "know your client" banking regulations, it eliminates the need for the presence of the applicant in the bank branch. Hashching co-founder Mandeep Sodhi says he will meet with representatives of the banks to persuade them to make mortgage applications fully digital.

CORPORATES
HASHCHING PTY LTD, ISELECT LIMITED – ASX ISU, MICROSOFT CORPORATION, TYRO PAYMENTS

Investor home loans on the rise as building approvals hit peak

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Original article by Michael Bleby
The Australian Financial Review – Page: 3 : 11-Nov-16

Lending to residential property investors increased by 4.6 per cent to $A12.4 billion in September 2016, from the previous month. Lending to owners-occupiers, excluding refinancing of existing mortgages, declined slightly to $A13 billion. Jo Masters, a senior economist at the ANZ Bank, says house prices continue to rise, auction clearance rates are high and building approvals are also high, but this trend may not be sustainable.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH SECURITIES LIMITED, AUSTRALIAN CONSTRUCTION INDUSTRY FORUM, HOUSING INDUSTRY ASSOCIATION LIMITED

Fewer home loans a good thing: APRA

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Original article by Joanna Mather
The Australian Financial Review – Page: 23 : 21-Oct-16

Australian Prudential Regulation Authority chairman Wayne Byres has told a Senate estimates committee that lending standards in the housing finance sector have improved over the last year. He added that APRA’s move to impose stricter lending standards on the industry has also resulted in slower growth in lending to property investors and to marginal borrowers. Treasury secretary John Fraser previously expressed concern about the cost of housing in Australia when he fronted the committee.

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

Mortgage price war ‘will hurt dividend’

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Original article by Michael Bennet
The Australian – Page: 23 : 20-Oct-16

Scott Manning of JP Morgan says stricter capital requirements and a rise in the customer churn rate contributed to a decline in the four major banks’ return on equity from mortgages between 2010 and 2015. He adds that the return from banks’ non-mortgage products fell to the same level as their cost of capital during this period. Manning warns that banks’ dividends will be vulnerable if the return on equity from mortgages falls any further, and he argues that banks should be offering tailored mortgage interest rates that reflect each borrower’s risk profile.

CORPORATES
JP MORGAN AUSTRALIA LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, DIGITAL FINANCE ANALYTICS, BANK OF QUEENSLAND LIMITED – ASX BOQ

Wrinkles in CBA’s satisfaction crown

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Original article by Vesna Poljak
The Australian Financial Review – Page: 23 : 6-Oct-16

Roy Morgan Research’s latest survey of customer bank satisfaction shows that the Commonwealth Bank of Australia (CBA) ranked first in retail main financial institution customer satisfaction for the six months to August 2016. Customers were less satisfied with CBA’s mortgage products, with CBA ranking third out of the big four banks. CBA dominates Australia’s mortgage market, with a 25.3 per cent market share.

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, ROY MORGAN RESEARCH LIMITED, AUSTRALIAN LABOR PARTY

High reliance on two incomes to repay home loans presents a potential risk

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 20-Sep-16

Roy Morgan Research’s "State of the Nation – Spotlight on Finance Risk" report shows that Australian households with two incomes now account for 67.2 per cent of owner-occupied mortgages. Overall some 9.3 per cent of dual-income households are classified as "at risk" of mortgage stress. Meanwhile, 17.4 per cent of Australians (705,000) who have a mortgage on the home they are living in can be classified as being "at risk", based on an average interest rate of 5.4 per cent. Over the last 10 years, mortgage holders "at risk" peaked in May 2008 (32.7 per cent) when the standard variable home-loan rate was 9.45 per cent.

CORPORATES
ROY MORGAN RESEARCH LIMITED

Rate cuts ‘hurt some but overall we gain’

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Original article by David Uren
The Australian – Page: 21 : 16-Sep-16

A report released by the Reserve Bank of Australia suggests that official interest rate cuts have a net gain for the nation overall, despite the impact on savers. The report argues that each $A1 reduction in home loan repayments results in an average increase of at least $A0.20 in expenditure on consumer durables. However, spending on durables rises by just $A0.04 on average for each $A1 increase in the interest income of net savers.

CORPORATES
RESERVE BANK OF AUSTRALIA

Michele Levine, CEO, Roy Morgan Research, comments on the findings in State of the Nation 25: Spotlight on Financial Risk

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 26-Aug-16

The end of the mining boom in Australia presents the Australian economy with many pressing challenges – and some of the biggest involve the potential for a slowing Australian economy to increase mortgage stress around the country, and also to lead to diminished superannuation balances for Australians heading towards retirement. The casualisation of the Australian work-force with an increasing proportion of Australians working part-time rather than full-time means many Australians are forced to save less for their retirement whilst the ability to pay current bills, including mortgage payments, is also crimped. In addition, the persistently low interest rates in Australia mean the amount required for retirement actually increases as annual returns on investments follow interest rates lower. Follow this link to view the full State of the Nation 25: Spotlight on Financial Risk Powerpoint presentation PDF.

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ROY MORGAN RESEARCH LIMITED

State of the Nation 25: Spotlight on Financial Risk

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 26-Aug-16

Roy Morgan Research CEO Michele Levine this week presented the latest State of the Nation Report in Melbourne and Sydney, with a special Spotlight on Financial Risk including Mortgage debt and stress, Income risks and the adequacy of retirement funding. Key findings of this in-depth industry spotlight include: Home ownership in Australia is likely to continue its downward trend whilst house price increases outpace the increase in household incomes; Mortgage stress levels are likely to remain elevated even with the likelihood of further interest rate reductions by the Reserve Bank of Australia (RBA) over the coming 12-18 months. Official Australian interest rates are already at a record low of 1.5% and likely to converge with the 0% interest rates found in comparable Western economies including the United States, United Kingdom, Canada and the EU; Household debt levels could become a risk for both households and banks should general economic conditions turn down; The reliance on dual incomes for home loans repayments by many Australian families is a risk in itself with the increasing trend towards part-time work throughout much of the economy and with the additional factor of low wages growth and many more. View the full release to see a comprehensive run-down of findings.

CORPORATES
ROY MORGAN RESEARCH LIMITED