Moody: House prices won’t be affected by loan cap… ‘Overboiling’ not an issue for PEP director… Australians to make extra payments with low rates...
Loan cap won’t hurt house prices: NAB
The banking regulator's 10 per cent-a-year cap investor credit growth will have little impact on house prices, which are being driven by strong demand and a lack of supply, says National Australia Bank.
After a recent crackdown on bank lending to landlords, NAB's head of retail banking Gavin Slater said slower growth in investor lending would not significantly affect the property boom gripping Sydney and Melbourne, according to an article in the Sydney Morning Herald.
Slater said the Australian Prudential Regulation Authority was not trying to influence price growth by imposing a 10 per cent annual speed limit for investor credit growth, and he thought average prices would continue to be supported by strong buying, including from overseas.
"I don't think where we're heading, around looking to moderate growth to under 10 per cent, at an industry level, will have a significant impact on asset prices themselves, but that's not the intent of the action," Slater said in Sydney recently.
The 10 per cent cap on investor credit growth is a key plank of the policy response to the red-hot housing market, according to the article.
‘Overboiling’ not an issue for PEP director
The property market is not even close to overboiling based on traditional financial measures, but Australian households and businesses are nevertheless "extremely vulnerable" to global interest rate rises and sharemarket fluctuations, Pacific Equity Partners managing director Tim Sims says.
"We are quite responsible at managing our book quite carefully," he was quoted to saying in an article in the Sydney Morning Herald. He was talking at The Australian and Deutsche Bank Business Leaders Forum in Sydney on Wednesday.
"If you study the statistics on it and affordability levels and other elements that go to build it up, they are actually reasonably encouraging that we are not anywhere close right now to overboiling on any traditional measures that you would worry about."
The banking system was sound, but 45 per cent of its capital was sourced from money markets offshore, making the 90 per cent of Australians on variable rate mortgages "almost directly vulnerable" to international rate changes, Sims said.
"That gets you into a discussion about global vulnerability and what is going to happen in other markets," he said. "That is before you reflect on the fact that the other great big piece of value in most Australians' portfolios is their pension fund, which, because of regulation, is largely concentrated in public equities in this country."
Australians to make extra payments with low rates
A survey by Australia's biggest credit union, CUA, shows more than three quarters of people with mortgages are likely to make extra payments on their home loans with interest rates falling, according to an article from Yahoo.
Only about a third of the 1,000 people surveyed said they would be likely to use the extra cash to treat themselves to a holiday, dining out or a hobby. And three quarters said they were unlikely to put the money in shares or investment funds.
CUA head of product Mark Petty said mortgage holders were prioritising paying down their home loan debt rather than spending.
"Mortgage borrowers are very debt focused and want to get ahead financially by repaying their mortgage as quickly as possible, which is a responsible thing to do," he said. "The current low interest rates are helping people along that journey."
The banking regulator's 10 per cent-a-year cap investor credit growth will have little impact on house prices, which are being driven by strong demand and a lack of supply, says National Australia Bank.
After a recent crackdown on bank lending to landlords, NAB's head of retail banking Gavin Slater said slower growth in investor lending would not significantly affect the property boom gripping Sydney and Melbourne, according to an article in the Sydney Morning Herald.
Slater said the Australian Prudential Regulation Authority was not trying to influence price growth by imposing a 10 per cent annual speed limit for investor credit growth, and he thought average prices would continue to be supported by strong buying, including from overseas.
"I don't think where we're heading, around looking to moderate growth to under 10 per cent, at an industry level, will have a significant impact on asset prices themselves, but that's not the intent of the action," Slater said in Sydney recently.
The 10 per cent cap on investor credit growth is a key plank of the policy response to the red-hot housing market, according to the article.
‘Overboiling’ not an issue for PEP director
The property market is not even close to overboiling based on traditional financial measures, but Australian households and businesses are nevertheless "extremely vulnerable" to global interest rate rises and sharemarket fluctuations, Pacific Equity Partners managing director Tim Sims says.
"We are quite responsible at managing our book quite carefully," he was quoted to saying in an article in the Sydney Morning Herald. He was talking at The Australian and Deutsche Bank Business Leaders Forum in Sydney on Wednesday.
"If you study the statistics on it and affordability levels and other elements that go to build it up, they are actually reasonably encouraging that we are not anywhere close right now to overboiling on any traditional measures that you would worry about."
The banking system was sound, but 45 per cent of its capital was sourced from money markets offshore, making the 90 per cent of Australians on variable rate mortgages "almost directly vulnerable" to international rate changes, Sims said.
"That gets you into a discussion about global vulnerability and what is going to happen in other markets," he said. "That is before you reflect on the fact that the other great big piece of value in most Australians' portfolios is their pension fund, which, because of regulation, is largely concentrated in public equities in this country."
Australians to make extra payments with low rates
A survey by Australia's biggest credit union, CUA, shows more than three quarters of people with mortgages are likely to make extra payments on their home loans with interest rates falling, according to an article from Yahoo.
Only about a third of the 1,000 people surveyed said they would be likely to use the extra cash to treat themselves to a holiday, dining out or a hobby. And three quarters said they were unlikely to put the money in shares or investment funds.
CUA head of product Mark Petty said mortgage holders were prioritising paying down their home loan debt rather than spending.
"Mortgage borrowers are very debt focused and want to get ahead financially by repaying their mortgage as quickly as possible, which is a responsible thing to do," he said. "The current low interest rates are helping people along that journey."
