Property Market Updates

The home loan market is always evolving. Lenders are constantly adding new products to entice customers and build their market share in different niches. This blog post will run you through the different specials that are currently available on the market.

Lenders are currently trying to transition Borrowers towards Principle and Interest Loans.

With that in mind, there are number of offers aimed at different segments of the market from First Home Buyers to Sophisticated Investors with both variable and fixed rate options to choose from.

The home loan market is always evolving. Lenders are constantly adding new products to entice customers and build their market share in different niches. This blog post will run you through the different specials that are currently available on the market.

Lenders are currently trying to grow their share of owner occupied Loans.

With that in mind, there are number of offers aimed at First Home Buyers and Owner Occupiers to entice them away from their existing lenders.

APPRA’s rules which were toughened in March 2017 are aimed at improving banks’ balance sheets in order to allow them to withstand future financial shocks similar to the Global Financial Crisis 10 years ago.

The tighter rules include limiting new interest only loans to only 30 per cent of the market, at Loan to Value Ratios (LVRs) above 80%. At the same time, borrowers are being assessed on higher interest rates and higher deemed expenses. This will ensure borrowers have a much bigger buffer to service their loans should rates go up. Dramatically!

The home loan market is always evolving. Lenders are constantly adding new products to entice customers and build their market share. This blog post will run you through the different specials that are currently available on the market.

As a result of APRA and ASIC’s directives to reduce the effect of Investors on the property market, Lenders are trying to grow their share of owner occupied Loans. With that in mind, there are number of offers aimed at First Home Buyers and Owner Occupiers.

The after effects of the directives handed down by the Australian Prudential Regulatory Authority (APRA) and the Australian Securities and Investments Commission (ASIC) are starting to take effect in the property market.

Lenders are using higher rates and more onerous qualification criteria to reduce the number of Investors in the property market and limiting their effect.

The Australian Prudential Regulatory Authority (APRA) and the Australian Securities and Investments Commission (ASIC) are doubling their efforts to reduce the growth in property prices. Especially in Sydney and Melbourne.

Once again, they are looking to do this by reducing the number of Investors in the market and reducing their collective capacity to borrow. They are targeting interest only lending hoping to reverse the growth of interest only loans in the market.

The Australian Prudential Regulatory Authority (APRA) is applying pressure to the major Lenders to reduce the number of investors and in turn slow the growth in property prices in Australia’s capital cities.

Interest only home loans have grown substantially. When ASIC reviewed the market in 2015, it found that the total value of new interest only home loans issued by banks, credit unions and building societies had expanded to account for 43% of all new home loans issued and rising.

ASIC is thus forcing banks to reduce the number and size of Interest Only loans in an effort to minimise the impact on the wider housing market.

The RBA has chosen to keep official interest rates frozen at 1.5% for another month following their meeting on Tuesday, December 6. Much to the delight of all mortgage holders.

Having said this, Australia’s banks source about 40% of the funds they lend on residential property from local bank deposits. The remaining 60% of funds are sourced from the international investment markets. Mostly through bond issues and the like.

On August 2, the RBA announced that it would cut the official cash rate by 0.25% to a record low 1.5 per cent

Home loan customers of Commonwealth Bank, Westpac, National Australia Bank and ANZ Bank will receive only part of last Tuesday’s cut in official interest rates, with the lenders blaming higher costs and tougher regulation.