Resources: Market Update
September 2009
LOW DOC LOANS REQUIRE MORE DOC.
Posted 24/09/09
Westpac, St. George and RAMS have all tightened up their policy for self-employed borrowers.
St George last week announced that low doc home loan applications must be supported by a BAS for the last 12 months, the last statement being no more than 3 months old at the date of application.
RAMS Home Loans also now require all low doc loan applications to be supported by BAS for the past 12 months, an Australian Taxation Office Lodgement Reference Number and account statements for the last three months that show evidence of tax payments.
Westpac recently implemented similar changes whilst CBA, ANZ and NAB all changed their low doc loan policies six or more months ago.
With these application document requirements it may mean fewer self-employed borrowers would qualify for low doc loans.
ON THE HOME LOAN FRONT.
Posted 23/09/09
First Home Buyer Commitments
First Home Buyer commitments (of all owner occupier commitments) fell from 27.1% in June to 25.7% in July.
Fixed Rate Loans (2 years or more)
Fixed rate loans were 7.2% of all owner occupier loans, down from 8.0% in June.
Average Loan
The average loan size was up from $264,300 to $266,900.
Average loans in each state/territory were: NSW, $285,900, Vic, $258,500; Qld $263,300; SA, $217,100; WA, $285,500; Tas, $190,900; NT, $270,200; ACT $276,500.
Re-financing
The value of refinancing of established dwellings amounted to 27.8% of established dwelling loans in June.
Outstanding Housing Loan Balances - End July 2009 Source: RBA
Outstanding housing loan balances at end July 2009 were $1,048.4 billion inc. securitised compared to $1,043.8b inc. securitised in June 2009 and $969.3b inc. securitised in July 2008.
RAMS TO CUT FEES.
Posted 23/09/09
From the 1st of October RAMS has joined the major banks in reducing fees associated with dishonours, missed payments and arrears. The fee across all home loan products will now be reduced to $15 and this includes cheque dishonour fees, 14-day default notice fees and 30, 60 and 90 days arrears fees.
Joanne Reid Head of Product at RAMS says the action was taken in response to customer feedback.
"While we appreciate that our customers endeavour to avoid exception fees altogether, we believe the new fee structure is more straightforward and easier to understand. We will continue to work with our customers to help them to avoid these fees altogether".
CITIBANK AND VIRGIN JOIN FORCES.
Posted 21/09/09
In a report in The Australian Citibank has formed a strategic alliance with the Virgin Money group in a bid that will re-introduce competition with the big four.
Specific details around the distribution of Virgin mortgages has yet to be confirmed however it is believed that Citibank will provide funding, banking networks and infrastructure while creating mortgages, new credit cards, and retail deposit accounts.
ST GEORGES PROPERTY REPORT.
Posted 17/09/09
St George has just released their National Property Report revealing 24 locations across the nation that are likely to provide the strongest value for home buyers. These suburbs are chosen based on value, demographics and the amenities in the suburb.
Besa Deda chief economist at St George believes the locations should continue to grow which will suit buyers and investors looking to seek capital growth.
Adelaide
Thebarton, Glanville
Brisbane
Kedron, Keperra, Fairfield, Cannon Hill, Margate
Canberra
Dickson
Darwin
Rapid Creek
Hobart
North Hobart
Melbourne
Flemington, Brunswick, Fawkner, Chadstone, Ashburton
Perth
Bassendean, Thornlie
Sydney
Granville, Riverwood, Lidcombe, Waterloo, Rockdale
Regional Australia
Gulliver
RBA STILL WEIGHING UP THE RISKS.
Posted 16/09/09
The Reserve Bank of Australia (RBA) September meeting, weighed the risk of keeping rates too low against the damage that might be done by increasing rates upward too soon.
In its minutes released yesterday Glenn Stevens said "As at the previous meeting members noted that the policy decision in the near term involved balancing the risk of over-staying an accommodative stance, and that of prematurely tightening and adversely affecting confidence and demand."
The RBA believe the global economy is improving, but can it be sustained in the long term without the temporary effect of stimulus that governments and central banks had applied.
The RBA is expecting to raise interest rates, but it certainly has time on its side with many questions still requiring answering about the continued sustainability of the global and domestic economies.
NAB EXPECTS RATES TO RISE.
Posted 10/09/09
With the RBA earlier this month keeping the cash rate at 3.0 % and continued better than expected economic figures, it appears that rates are headed upwards in the very near future.
Lisa Gray Head of Personal Banking for NAB said they are expecting a rise in official rates by the end of 2009. "Our chief economist recently came out and has brought forward some of his increases, so we're certainly expecting one or two before Christmas. That's our expectation in terms of our forecast."
She later went onto say that "We'll look at what our funding costs are at that point in time, what our competitors are doing, but also we're very focused on trying to ensure we can keep interest rates as low as possible for consumers,"
The waiting game continues...
BANKWEST LAUNCHES CAPPED RATE HOME LOAN PRODUCT.
Posted 09/09/09
Bankwest has unveiled plans to introduce a new capped rate home loan.
With the market expecting interest rates to rise, borrowers who take out this product have the security that their home loan won't go higher than the capped rate irrespective of what the market rate is.
The Bankwest product has a 5.4% variable rate with a capped rate of 7.5% until November 2012.
Bankwest's head of mortgages Dean Gillespie said "This product has been specifically designed to offer customers the opportunity to make the most of the current low interest rates, whilst the cap will provide peace of mind for when the rates inevitably start to rise,"
