Tags: Interest Rates
Financial crisis didn’t stop flow of housing credit, Reserve Bank says
April 1st, 2010THE 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 Mortgage Innovation Forum in Sydney on Tuesday.
“The larger banks have filled the gap left by the decline of the wholesale lenders, so that there has not been a material [...]
Interest rates set to rise after Easter – Economists
April 1st, 2010By Stephen Johnson
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 clients.
“Against this backdrop there is little doubt that the Reserve Bank will wish to rapidly unwind its current expansionary policy settings.”
Related Coverage
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Interest rates: Another step to ‘normality’
March 9th, 2010• The Reserve Bank has lifted the cash rate from 3.75 per cent to 4.00 per cent. If banks fully pass on the rate hike then repayments on an average $300,000 loan would lift by just over $47 a month.• The Reserve Bank has given no guidance on future rate decisions other than highlighting the fact that borrowing rates should “be closer to average”. Overall, that suggests rates have another 35-70 basis points to go.
What does it all mean?
• It’s important not to over-analyse the latest interest rate decision. The Reserve Bank has lifted the cash rate for the simple reason is that it is still too low for an economy that is getting back to normal. And if the economy continues to improve, then we can expect the Reserve Bank to lift rates further.
• Certainly the rate decision will be ‘live’ for the next few months. The Reserve Bank [...]
Tags: Interest Rates, reserve bank
Why Median House Prices Could Well Be Over One Million Dollars By The End Of This Decade
January 22nd, 2010Michael Yardney
The latest forecasts from Metropole Property Investment Strategists Research suggest to me that median house prices will be well over $1 million in every capital city at the end of this new decade, and in many cases they will be considerably more.
Now, I know this is a bold forecast but a lot can happen in 10 years. Let’s look at what happened to property values over the last 10 years:
I clearly remember the year 2000, the beginning of the last decade. While some were celebrating a new millennium, others had concerns that property values could not increase any further. At the time we were paying less than $300,000 for an average house in Sydney, $230,000 in Melbourne, $145,000 in Brisbane, $149,300 in Perth, $188,000 in Darwin, $134,000 in Adelaide, $160,000 in Canberra and $112,500 in Hobart.
Fast-forward 10 years to today and look at what we paying for the average [...]
Insurance Can Help Cover Your Bet On The House
January 21st, 2010WITH three interest rate rises behind us and more forecast for later this year, more homeowners are considering insurance to help them meet their repayments if they fall into financial difficulty.
Resi Mortgage Corporation head of consumer advocacy Lisa Montgomery says many people are unaware of the types of insurance policies that can help pay the mortgage if you lose your job or can’t work because you are ill or injured.
“When you’re getting a mortgage you are usually very stressed and just focused on getting that loan approved and the whole moving process,” Ms Montgomery says.
“Insurance is something that most people decide to leave until later but many never get around to it. That could be an expensive mistake especially with repayments on the rise.”
The types of insurance that property owners and investors should understand include:
1. Income protection insurance, which will pay out a proportion of your income, usually up to [...]
Chapman Commentary
December 18th, 2009Interest rates for home buyers are relatively cheap (albeit rising); however the banks’ appetite for funding developments is still limited. In other words, developers either need to pay a higher interest rate or need to pre-sell more properties in each development to get the funding. Therefore it’s less profitable for the developer to build and so they are simply better off holding the land until they can make a suitable profit. Fair enough…
Regarding population growth, it’s simple supply and demand. Our population is growing due to an increased birth rate, decreased death rate, increased migration, and fewer people moving overseas (Australia maybe more attractive for job prospects).
According to RP Data’s most recent Property Pulse, almost 158,000 more babies were born than deaths in the past 12 months, and we had over 285,000 more immigrants arrive than emigrants leave our shores in the 12 months to June 2009; this represents a [...]
