Our commentary on issues important to home owners, investors and borrowers
Even before the advent of COVID-19, Reserve Bank governor Philip Lowe told Federal Parliament’s Standing Committee on Economics that the RBA was prepared to do “unconventional things” to kick-start a flailing economy. The RBA cut rates to an unprecedented 0.25% in March this year. At its meeting this week it lowered its cash rate target to 0.1%. That is very close to zero - is it possible for rates to go negative?
Read MoreAmidst the tumultuous times of the current COVID-19 pandemic, we have seen numerous changes in the economy. Unemployment is at a record high, yet there has been a surge in the property market as people move to take advantage of lowering interest rates.
But rather than looking for properties closer to urban areas, housing market data has indicated that there is a rising demand for properties in regional markets of Australia.
Read MoreAt the start of the year, the Australian Government launched the First Home Loan Deposit Scheme as an initiative to support eligible first home buyers to purchase their first home sooner.
Usually, first home buyers who have not met the 20 per cent deposit need to pay lenders mortgage insurance. Under the Scheme, however, eligible first home buyers can purchase a modest home as long as they have a deposit of five per cent or higher (this is subject to lenders’ criteria).
Read MoreRepublished from Michael Matusik.
Whilst most of the housing industry applauds another 10,000 new federal government first home loan deposit scheme placements, some of us continue to shake our heads.
How did come to this, when it seems okay to place the top loan threshold for a first home buyer at $950,000!
Read MoreIn most places, today, more money is lent to investors than first home owners. Western Australia and Northern Territory are the two current exceptions. When I started in this business it was rare than investment loan totals exceeded that lent to first home buyers. Something is wrong here if you ask me.
Read Moren June the Australian Prudential and Regulation Authority (APRA) announced its first relaxation of credit controls imposed on the banks since its imposition of much tighter controls in 2017. These had been imposed to wind back a ramp in lending to property investors, to put a ceiling on interest-only lending, and to force the banks to more thoroughly consider individual borrower’s living expenses.
From APRA’s perspective, this has had the intended effect on the property market. The rampant growth in capital city property prices was controlled, and risks to the financial system implicit in highly geared investors, and even owner-occupiers holding interest-only loans in a property market “bubble”.
Read MoreLoanscape is your information resource about lending and property.
Loanscape has today released its Borrowing Capacity Index for Q3/2024. It shows that the borrowing capacities of Australian individuals and families have started to recover after the sharp decline over the past 2 years. Lower income borrowers continue to be disproportionately impacted by interest rate increases: the family income required to qualify for the average size loan in Australia is 37% higher than 2 years ago.
Loanscape has today released its Borrowing Capacity Index for Q2/2024. It shows that the borrowing capacities of Australian individuals and families have stabilised after the sharp decline over the past 2 years. Lower income borrowers continue to be disproportionately impacted by interest rate increases: the family income required to qualify for the average size loan in Australia is 35% higher than 2 years ago.
Combined dwelling values have re-accelerated across the nation in February, with all mainland capitals soaring in value. It probably comes as no surprise that Perth claimed the top spot by gaining a whopping 1.8% for the month
Loanscape has today released its Borrowing Capacity Index for Q1/2024. It shows that the borrowing capacities of Australian individuals and families continue to decline. The more modest decline in the size of average loans being taken confirms that lower income borrowers are being disproportionately impacted by interest rate hikes: the family income required to qualify for the average loan in Australia is now 32% higher than 18 months ago.
The end of the year is fast approaching, with most capitals experiencing a strong recovery on dwelling values from the downturn that culminated at the start of 2023.
The recovery is mainly due to an influx of immigration and constricted supply, which the Government is trying to remedy with its ambitious goal of building 1.2 million homes by 2029 through HAFF.
Loanscape has today released its Borrowing Capacity Index for Q4/2024. It confirms the forecast trend that borrowing capacities of Australian individuals and families are recovering from their low levels which coincided with the last of the recent increases to borrowing rates initiated by the Reserve Bank of Australia.