Mortgages – The Truth About Households Paying Ahead

One of the arguments often used to disprove any issues in the housing market is the fact that some households are paying well ahead of required repayments. For example in the recent RBA Bank Stability Report, they say “Outside of investor housing, household sector finances are currently less cause for concern. Household credit growth has … Continue reading “Mortgages – The Truth About Households Paying Ahead”

BOQ 1H Results Supported By Housing Lending

BOQ today announced record interim cash earnings after tax of $167 million for the six months to 28 February 2015, a solid result driven by growing momentum in lending growth, strong Net Interest Margin performance and further asset quality  improvements. Statutory profit after tax rose 14% to $154 million on the prior comparative half. Home … Continue reading “BOQ 1H Results Supported By Housing Lending”

Top LVR and LTI Households By Post Code

We have now finished updating the DFA market model, to take account of the latest DFA survey data, and market data. So we can look across specific households, segments and locations. Specifically we have been looking at average loan to income (LTI – income after tax but before interest) and loan to value (LVR – … Continue reading “Top LVR and LTI Households By Post Code”

Economic Implications of High and Rising Household Indebtedness

The Reserve Bank of New Zealand just published an interesting report on this important topic. High and rapidly rising levels of household debt can be risky. A high level of debt increases the sensitivity of households to any shock to their income or balance sheet. And during periods of financial stress, highly indebted households tend … Continue reading “Economic Implications of High and Rising Household Indebtedness”

RBA On Household Risks

In the financial stability report today, the RBA comments: “Household sector risks continue to revolve largely around the housing and mortgage markets. At this stage, competitive pressures have not induced a material  easing in non-price housing lending standards. The composition of new mortgage finance remains skewed to investors, however, particularly in the largest cities. Ongoing … Continue reading “RBA On Household Risks”

Latest DFA Survey – Other Segments

Today we round out the latest survey results, by updating our other segments. The property as investment bug continues to spread. First, those looking to trade up. Property investment has now overtaken the desire for more space as the main driver to transact. We also see that life style changes and purchase due to job … Continue reading “Latest DFA Survey – Other Segments”

Lazard Warns On Australian Property

According to the Australian today, Lazard Asset Management fund managers are concerned about the banks’ skyhigh valuations and the risks of a housing market correction. “…it’s record high household debt in a hot property market — a more worrying scenario for it tends to cause deeper economic pain. “Property prices, bank valuations — we’re still … Continue reading “Lazard Warns On Australian Property”

RBA Data On Bank Funding

In the latest RBA Bulletin for the March quarter, there is an interesting article on bank funding “Developments in Banks’ Funding Costs and Lending Rates”. It demonstrates mix of forces in play, including competitive dynamics, relative product pricing, and the impact of the global financial system on the banks. The main finding is that the … Continue reading “RBA Data On Bank Funding”

Deep Mortgage Discounts To Be Had

We have updated our survey models, and we note that since January banks have been discounting their mortgage dealss in an attempt to gain relative share. The average discount is more than 100 basis points off the standard advertised rate. So households should be negotiating hard to get the best deal. We also see that … Continue reading “Deep Mortgage Discounts To Be Had”

APRA Waiting For Global Capital Developments Before Acting

In Wayne Byres speech today to the House of Representatives Standing Committee on Economics, there was a clear indication that they would wait for the results of the international work of changes to capital rules before doing much locally. Meantime they will continue to talk to the local banks about sound lending practice. Too little, … Continue reading “APRA Waiting For Global Capital Developments Before Acting”