Home Loans, Mortgage Refinance, Bad Credit Home Loans

The president of Australia’s peak real estate industry body is ‘‘astonished’’ that Australia’s top central banker queried the wisdom of going into hock to invest in property.

The comment sparking the reaction came from Reserve Bank of Australia governor Glenn Stevens in an interview aired yesterday.

‘‘I think it is a mistake to assume that a riskless, easy, guaranteed way to prosperity is to be leveraged up into property.

‘‘It isn’t going to be that easy,’’ Mr Stevens told interviewer David Koch on Seven’s Sunrise program.

On the other hand, the real estate industry would prefer it to be just that easy.

In a statement released today, the Real Estate Institute of Australia said its president, David Airey, was ‘‘stunned’’ to hear Stevens had said...

Reserve Bank assistant governor Guy Debelle opened yesterday’s Mortgage Innovation conference in Sydney by declaring that small lenders were coming back and the mortgage market was contestable, and was immediately challenged by a number of industry players.

At issue were different views about the cost of funds for small lenders and their ability to control their margins.

Debelle said the securitisation market had returned as a viable source of funding for lenders.

In the RBA’s view, with spreads for issues not supported by the Australian Office of Financial Management at around 130 to 135 basis points over the swap rate, the cost of issuance was “a little below break-even at 160 basis points”.

ING Direct chief financial...

AN UNEXPECTEDLY large fall in retail sales and lower-than-expected building approvals could see the Reserve Bank hold interest rates steady next week, economists say.

Retail trade fell 1.4 per cent in February to $19.8 billion, from a downwardly revised $20.1 billion a month before, data from the Australian Bureau of Statistics released today shows.

It was far below the market forecast for a 0.3 per cent rise in sales in the month.

Meanwhile, building approvals fell 3.3 per cent to 13,929 units in February, seasonally adjusted, from an upwardly revised 14,405 units in January, the ABS said.

In the year to January, building approvals were up 34.2 per cent.

The median...

RESERVE Bank of Australia assistant governor Guy Debelle says a recovery in the country’s securitisation market has encouraged some small mortgage lenders to return to the market.

Speaking at a conference in Sydney today, Mr Debelle said “smaller lenders’ market shares have risen slightly over recent months, though they are unlikely to return to pre-crisis levels anytime soon” with the country’s four largest banks having significantly improved their market share during the crisis.

Mr Debelle said smaller lenders have become more competitive because securitisation was becoming “a more viable source for...

Competition for small business lending is likely to pick up as the economy strengthens, the Reserve Bank of Australia has told a Senate inquiry.

A slowdown in lending to small business reflected both reduced demand for loans and a general tightening in bank lend standards, it said in a written submission.

“Since the onset of the (global financial) crisis, competition in lending has decreased,” the bank said.

But the easing in competition was to some extent “cyclical”.

“During periods of strong economic growth, banks tend to compete more aggressively for business lending by cutting their margins and relaxing their lending standards,” it said.

“However, when the economic and business outlook is uncertain and loan losses are rising, as has...

THE Reserve Bank says the global financial crisis did not stop the flow of credit to consumers looking to buy houses, although the costs of funding those loans increased and lending standards were tightened.

RBA assistant governor of financial markets Guy Debelle said the GFC had a “material impact in pricing and structure” in the Australian mortgage market, but it did not have a material impact on the quality of housing credit provided.

“Housing finance has been readily available throughout the crisis period, with housing credit growing at about 8 per cent a year,” Dr Debelle said in prepared remarks to the...

BANK of Queensland chief executive David Liddy has taken out mortgages on multi-million dollar properties with a rival lender, citing privacy concerns.

The banker, who currently fronts an advertising campaign wooing customers to BoQ, has Westpac loans over a unit near the beach at Mooloolaba and a waterfront Sydney property.

“You’ll discover our service is so great, you’ll think it’s your own personal bank,” he says in the current advertisements.

BoQ said Mr Liddy’s decision to borrow from another

INTEREST rates could be set to rise again in April after Australians return from their Easter break.

Home borrowers are still dealing with March’s rate increase, on top of three hikes at the end of 2009.

With the economy gathering strength, some experts expect the Reserve Bank to put up rates when it next meets, on April 6.

National Australia Bank chief economist Alan Oster says the Australian economy is expanding more rapidly than expected.

“Over 2010, we now expect soaring bulk commodity prices to bolster economic growth and push unemployment down to four per cent or lower,” he said in a note to...

OFFICIAL forecasts for the nation’s housing shortage have worsened, with more than 100,000 prospective home buyers already locked out of the market by June 30 last year.

The ongoing gap between demand and supply will be greater than previously feared, as all levels of government and the building industry struggle to keep up with Australia’s world-beating population growth, The Australian reports.

By 2029, the combined shortfall could reach 500,000 homes and apartments.

The housing shortage...

Not that the Reserve Bank mandarins plot such things, but they know that if they ever want to generate a rash of headlines, all they have to do is mention housing and mortgage rates.

And to really generate attention, they only have to throw in something about bank margins and profits.

The curious thing is that everyone else seems to care more about those issues than the RBA does itself.

Oh, there’s no doubting that the central bank from Governor down is red hot about the ineptitude of various governments and our need to build more housing to ameliorate an unfortunate surge in prices, but the RBA is interested in bigger fish than the housing red herring.

Assistant Governor Philip Lowe as good as said as much yesterday while fingering the importance of the likely surge in our terms of trade. As if to prove his point, media reporting of...