Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
The RBA today published a paper on “Mortgage-related Financial Difficulties: Evidence from Australian Micro-level Data.” Although default rates in Australia are lower than in many other countries, their research paper delved into the different types of mortgage lending, using loan-level pool data provided by MARQ Services and concluded that higher LVR lending, and interest only … Continue reading “High LVR Lending More Risky – RBA”
APRA published their quarterly ADI property statistics today to September 2014. ADIs’ total domestic housing loans were $1.3 trillion, an increase of $103.4 billion (9.0 per cent) over the year. There were 5.2 million housing loans outstanding with an average balance of $239,000. The proportion of investment loans moved higher again to 34% of all … Continue reading “ADI Residential Property Exposures Up Again”
Today, in a speech by Chris Aylmer, Head of Domestic Markets Department, RBA, we got an interesting summary of recent developments in the market. This is important, because as at June, the Bank held about $25 billion of these assets under repo as part of their liquidity management operations. In addition, at the same forum, … Continue reading “Australian Securitisation Under The Microscope”
The CBA advised that its unaudited cash earnings for the three months ended 30 September 2014 were approximately $2.3 billion. Statutory net profit on an unaudited basis for the same period was approximately $2.4 billion, with non – cash items treated on a consistent basis to prior periods. Overall business momentum was maintained. In home … Continue reading “CBA Trading Update Solid”
According to APRA, interest only loans continue to grow as a proportion of all home loans. Recently Moodys warned about the increased risks which may stem from this type of loan. So the question is, should we be concerned, bearing in mind the recent RBA comments “indicative of speculative demand motivating a rising share of … Continue reading “Interest Only Loans – The UK Experience”
The RBA just released their Financial Stability Review for September 2014. They made a number of comments on Housing Lending, which I have collated in a more digestible form here. INVESTMENT LENDING Household credit growth has picked up, almost entirely driven by investor housing credit, which is growing at its fastest pace since late 2007. … Continue reading “RBA On Housing Lending in Financial Stability Review”
An extract from the latest edition of the DFA report, the Property Imperative, released last week. The Australian Residential Property market is valued at over $5.2 trillion and includes houses, semi-detached dwellings, townhouses, terrace houses, flats, units and apartments. In the past 10 years the total value has more than doubled. It is one of … Continue reading “The Current State Of Play In The Property Market”
The RBA has made a supplementary submission to the Financial System Inquiry. Of note, they want to limit the extent to which SMSF’s can borrow, especially for property purchase; acknowledges the potential systemic risk from more housing lending, and the potential impact on business lending; and continues to be skeptical about the potential benefits of … Continue reading “RBA Reinforces Current Policy Settings”
The wind appears to be changing. First the new head of APRA warned at a CEDA event they were watching the mortgage lending of the banks closely, “The Australian banking system clearly has a concentration of risk in housing. If anything was to go wrong in the housing market it would have very severe impact … Continue reading “If The Worm Turns, What Happens To Household Mortgage Stress?”