Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
The latest Financial Stability Review from the RBA has a different tone to it, compared with previous edition, because whereas they have previously played up the “cushion” some households have by paying their mortgages ahead, now they say one third of households have no buffer and are exposed to potential interest rate rises. What has … Continue reading “One In Three Households Have No Mortgage Buffer – RBA”
Wayne Byres speech “Fortis Fortuna Adiuvat: Fortune Favours the strong”, as Chairman of APRA, at the AFR Banking & Wealth Summit, makes two significant points. First, there are elevated risks in the residential lending sector (even after the recent tactical announcements on interest only loans). Banks remain highly leveraged businesses. Second, despite the delays from … Continue reading “APRA Looking At Capital Ratios For Mortgages”
According to the latest modelling from Digital Finance Analytics, around half of all households in rental accommodation are struggling to pay their rent on time. Across all households, more than 30% are renting, and this has been rising as the costs of property escalate, mirroring the rise in mortgaged households. Within the rental sector, around … Continue reading “Half Of Households Are In Rental Stress”
From The Advisor ANZ CEO Shayne Elliott has explained how the group “looked hard” at launching tracker mortgages before it realised they would not be popular among borrowers. In his opening statement to the House of Representatives economics standing committee in Canberra yesterday, Mr Elliott explained that the bank had taken action on a number … Continue reading “Tracker mortgages ‘commercially unattractive’: ANZ chief”
From The AFR. Exclusive analysis performed for AFR Weekend has revealed that more than a million Australian home owners will struggle with mortgage stress if interest rates were to rise just three percentage points. Data from research house Digital Finance Analytics shows that close to one in three households from Victoria, Tasmania and Western Australia … Continue reading “More than 1 million Australians face mortgage strife”
APRA has updated the mortgage lending guidance, to include more specific guidance on gifts for deposits, off-the-plan lending, allowance for vacant periods on rental proprieties, allowance for irregular income and confirmation of interest rate floor and buffers. There are also important comments relating to brokers, portfolio analysis and management responsibility. For example, banks will need … Continue reading “APRA Updates Mortgage Lending Practices”
We had significant interest in our recent posts on mortgage rate sensitivity in a rising market. One recurring request was for a cumulative view of rate sensitivity. So today we post these views on a segmented basis, using our master household segmentation. A quick recap, we updated our analysis of how sensitive households with an … Continue reading “A Cumulative View Of Mortgage Rate Sensitivity”
From Australian Broker. Suncorp has announced an increase of 0.15% p.a. for its variable interest rates on new and existing owner-occupier loans from 23 January. The changes apply to the bank’s Back to Basics and Standard Variable products, bringing the rates up to 4.97% p.a. and 5.55% p.a. respectively. Suncorp has also increased its small … Continue reading “Suncorp Lifts OO Mortgage Rates”
In our last post for 2016 we have geo-mapped the probability of mortgage default by post code across the main urban centres through 2017. You can read about our approach to the analysis here. We start with Sydney, which is looking pretty comfortable. Melbourne is also looking reasonable, though with a few hot spots. Brisbane … Continue reading “Mortgage Default Heat Map Predictions”
The MYEFO was released today. In essence, it has quite an optimistic tint, but fundamentally growth is too weak, so incomes, business investment and tax takes will be depressed. Whilst there is some chance of a “free-kick” from some commodity prices, the outlook is not great, and net government debt has yet to peak. The … Continue reading “MYEFO – Will Mortgage Rates Rise?”