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CBA Reduce Lending Margins - 09/03/2010
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CBA have announced reduction to their lending margins (LVR) on all investment loans with personal investment loans now capped at 80%. Furthermore they have capped owner occupied secured lines of credit to 90% LVR and 80% where they propose to purchase shares. The policy is very complex depending on security offered, purpose, existing customer status and loan type, we can expect some confusion.
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RBA Increases Cash Rate to 4.0% - 02/03/2010
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At todays meeting the RBA increased the cash rate by 0.25 per cent to 4.0 percent. In the annoucement Governor Stevens stated that the risk of serious economic contraction in Australia has passed. It also suggests that more rate will follow "it is appropriate for interest rates to be closer to average. Today’s decision is a further step in that process. "
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The Evolving Financial Situation - 16/02/2010
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Extract from RBA Guy Debelle today
This illustrates that the models and statistical distributions used to assess and manage risk were, in many cases, plain wrong. This applies to models used by investors, issuers and regulators...
.. a significant risk, in my assessment, is that we are still yet to see the full impact of the weakness in the North Atlantic economies on the loans on the books of financial institutions... While these risks are there in the North Atlantic, they are not present in our part of the world. In Asia, bank balance sheets have remained in sound condition throughout and hence are no impediment to credit provision. Indeed, there is a marked contrast between the balance and nature of the risks in Asia and the North Atlantic. While the near-term risks may be on the downside in the US and Europe, they would appear to be on the upside in Asia. The interplay between the contrasting fortunes of these two parts of the world is likely to be the critical factor in determining the evolution of the global economy, and Australia is now more tied into one than the other.
But the above are risks, not the central case. The central case is that financial markets have improved considerably over the past year. This improvement has allowed a sizeable portion of the interventions in financial markets undertaken by central banks over the past three years to be unwound. This is particularly true in Australia, where the measures we undertook were considerably less and have been unwound.
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Westpac Group Fixed Rate Increase - 11/01/2010
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Westpac and St George today announced increases across the board on their fixed rate products due to 'increases in the long term money market rates' - so while ING has a new 3 year fixed rate of 6.45 per cent Westpac's offering is now 7.79 per cent and 8.14 per cent for 5 years. With another announcement from Westpac's wholly owned RAMS that they are taking 10 days to assess new loan applications.
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AMP Expert Predicts 4.75% - 29/12/2009
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AMP's chief economist, Shane Oliver has predicted that the cash rate will peak at 4.75 per cent in the coming year. He suggests that widening rate margins by the dominant lenders will reduce the need for the RBA to push the cash rate higher.
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CBA & Westpac Domination - 03/12/2009
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Latest APRA figures confirm the domination of Westpac and CBA who accounted for 80 per cent of credit growth for the 6 months to October 09. It's no coincidence that these two have benefited enormously from the GFC and the resulting reluctance of ACCC to intervene in the spate of takeovers of lenders such as Bankwest and St George, mortgage managers and broker groups. It would appear that competition in the Australian market is nearing a crises point however the regulators and the government appear to show little interest in the situation.
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House Prices Rise Despite Slow Demand - 30/11/2009
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Latest HIA figures suggest that house prices continue to increase despite a 6 per cent decline in new home sales for October. Melbourne prices have increased 14.9% over 10 months with Sydney 9.9% These rises are attributed to delays and costs with compunded by land shortages. In another report the Australian average new house in now larger than in the USA at 214.6 Sq Mts - and double the average size in the western world.
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Why lenders don't like small apartments - 30/11/2009
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Studio apartments may seem an ideal way to get a foot in the property market, or an attractive high yield addition to an investment portfolio, but lenders aren't very keen on them. A person might find getting finance on a 2 br unit or a house no problem at all, but the same person looking at a studio will have to find a bigger deposit and face less favourable terms. Why is this so? Read our latest newsletter
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ING Announce 100% Offset - 16/11/2009
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ING have finally announced their long awaited loan product with a 100 per cent offset facility - the Orange Advantage ( yet another Advantage product) the Orange Everyday transaction account is linked to the new loan product whoch also offer great flexibility with an annual fee of $199 with no extra charge on splits. Unlike other transaction accounts ING actually pay you a 50 cent bonus every time you withdraw $200 or more via EFTPOS.
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