Digital Finance Analytics (DFA) Blog
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The latest data from APRA shows a small fall in mortgage delinquencies and a rise in offset balances. The question is, is this significant or not?
http://www.martinnorth.com/
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The latest data from APRA shows a small fall in mortgage delinquencies and a rise in offset balances. The question is, is this significant or not?
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
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As foreshadowed, housing has become a major battleground for the main parties, as record prices, an acute shortage of rental properties and high interest rates combine to significantly reduce affordability. We know that on an international basis, household debt to income ratios in Australia are significantly higher, than even New Zealand and Canada, who both have severe housing crises. Well, done Australia, a direct result of 30 years of bad policy, and overleverage. And weirdly even now, according to IFM data the surge in average loan sizes is behind the inexorable growth in Australian home prices.
Today I want to look at the latest data on new loans from the ABS, in a release which has now gone from monthly to quarterly, so data released this week covers the October to December quarter 2024. Talk about lagged data! The RBA gross debt levels for January reported a significant uplift, especially for investor loans, as I discussed in a recent post. “Is The RBA Really All In For A Rate Cut In February?”
On the way to this analysis though we need to pause on The Treasurers recent announcement that It will soon become easier for Australians with student loan debt to get a mortgage after Treasurer Jim Chalmers instructed the prudential regulator to relax how HECS was treated when banks conducted mortgage serviceability tests.
So we are seeing mortgage debt ballooning, to the benefit of the banks – see CBA’s recent results. When interviewed conveniently the CEO denied that growth in mortgage lending had any significant impact on house prices. But we know of course the strong credit impulse is one of the main drivers of home price growth, supported by greater demand from high migration, tax breaks for investors (many of whom are losing money on a cash flow basis) and lack of appropriate supply.
The whole housing issue is now an election battleground, with The Coalition opposition promising to allow home buyers to raid their superannuation savings for a deposit, and it has committed to watering down responsible lending obligations.
Both sides have policies which will boost housing demand and increase mortgage debt, driving prices higher. As a result, they would make the affordability situation worse.
Remember the word “mortgage” comes from the Old French phrase “morgage” which translates to “death pledge”. The term refers to the pledge ending, or “dying”, when the loan is paid or the property is foreclosed. Given the longer terms of new mortgages, and the later age of getting one, Mortgage defined as a death pledge has never been truer.
But then does ordinary Australians who want a home have any choice but to play this game? Frankly no, because the game is rigged!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Journalist Dale Webster over at The Regional has rightly launched an attack on APRA, the banking regulator.
https://www.theregional.com.au/post/apra-bogged-in-a-data-mess-of-its-own-making
They released their annual points of presence data that showed an 11 per cent fall in bank branches nationally in 12 months. It triggered HEADLINES around Australia last week screamed out about bank closures. Channel Nine was one of many media outlets that picked up the story, reporting 424 branches had “shut their doors for the final time”.
As Dale writes, the problem is APRA never actually said that.
“The latest statistics show a further decline in bank branches in the year to 30 June 2023, with a reduction of 424 branches across Australia (11 per cent), including 122 branches (7 per cent) in regional and remote areas. This continues a trend that has seen branch numbers decline by 34 per cent in regional and remote areas, and 37 per cent overall, since the end of June 2017.”
What unsuspecting media did not pick up on was that among those 424 branches were a number of sites that had been stripped of branch status because they no longer provided the level of service required to be classified as such by law.
The doors are still very much open but they are among the growing number of banks that have no tellers and customers can only get cash from an ATM.
So we are left with what could be described as a bit of a situation, according to Dale. I think it is more deliberate, as APRA again manages to hide the real story – on this they have form, given their close alignment to the Banks. They are in my view hardly independent, nor an effective regulator.
Journalist Dale Webster over at The Regional has rightly launched an attack on APRA, the banking regulator.
https://www.theregional.com.au/post/apra-bogged-in-a-data-mess-of-its-own-making
They released their annual points of presence data that showed an 11 per cent fall in bank branches nationally in 12 months. It triggered HEADLINES around Australia last week screamed out about bank closures. Channel Nine was one of many media outlets that picked up the story, reporting 424 branches had “shut their doors for the final time”.
As Dale writes, the problem is APRA never actually said that.
“The latest statistics show a further decline in bank branches in the year to 30 June 2023, with a reduction of 424 branches across Australia (11 per cent), including 122 branches (7 per cent) in regional and remote areas. This continues a trend that has seen branch numbers decline by 34 per cent in regional and remote areas, and 37 per cent overall, since the end of June 2017.”
What unsuspecting media did not pick up on was that among those 424 branches were a number of sites that had been stripped of branch status because they no longer provided the level of service required to be classified as such by law.
The doors are still very much open but they are among the growing number of banks that have no tellers and customers can only get cash from an ATM.
So we are left with what could be described as a bit of a situation, according to Dale. I think it is more deliberate, as APRA again manages to hide the real story – on this they have form, given their close alignment to the Banks. They are in my view hardly independent, nor an effective regulator.
Concurrent with the current Regional Branch Inquiry, APRA has announced a review of its Points Of Presence Data. This is welcome, because the current data contains many inaccuracies, and we need good data to ensure adequate transparency in terms of access to banking services.
https://www.apra.gov.au/discussion-paper-adi-points-of-presence-review
You can make a submission to this review.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
On 31st March the RBA and APRA released their latest monthly data to end February. There was significant evidence of loan growth easing back – a consequence of higher rates and tighter underwriting resulting from the change. That said, another record was breached.
We examine the data.
The latest credit data from the RBA and APRA, and retail from the ABS provides indicators of easing trends across the economy..
We look at the latest figures.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Just before Christmas APRA advised the imposition of a 1% Counter Cyclical Capital Buffer on Australian Banks. Interesting timing, seeing as the Bank For International Settlements had set 2023 as the required date. Up to this point APRA has argued a 1% buffer was not needed in Australia – so what changed?
So, we wonder, are they being forced to comply. and what does this mean for our “strong” banks as interest rates rise and lending slows?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest data to end November 2022 from the RBA and APRA shows that the rate of credit growth is slowing – presumably due to higher rates and reduced borrowing power. That said refinancing including equity draw-down is on the rise…
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
