The housing boom in Sydney and Melbourne could cool off as growth slows…. Banks feeling the crunch of soaring house prices… Broker bashing report debunked by new research...
Regulator: Investor Mortgages see growth decline
According to the Bloomberg Business news, the Australian banking regulator expects to see slower growth in investor mortgages that have helped drive a housing boom in Sydney and Melbourne and warned it will continue to monitor lending standards.
Banks have had long enough to “revise their ambitions” and the Australian Prudential Regulation Authority will “be watching carefully to see a moderation in growth in investor lending in the second half of the year,” Chairman Wayne Byres said in a speech in Sydney Wednesday.
The regulator has agreed plans with banks and will be “monitoring closely to see that they kick into effect,” he said without giving further details. Landlords have fueled a surge in house prices with Sydney homes now costing 40 percent more than they did three years ago.
“Given the importance of housing-related lending, it should not be surprising that APRA supervisors are increasingly vigilant on the risks this lending presents,” Byres said, according to the text of his speech. “Put simply, if all our eggs are increasingly being placed in one basket, we need to make sure the basket isn’t dropped.”
Banks feeling the crunch of soaring house prices
UBS Securities warns soaring house prices in Auckland, Sydney and Melbourne risk making banks vulnerable, according to an article from New Zealand Herald.
In a report UBS indicates that if housing prices continue to rise, the New Zealand and Australian central banks will intervene and there's an increased chance of a future economic shock. Christopher Simcock, head of corporate client solutions at UBS New Zealand, says though the risks are real, the report's conclusions are not alarming. "There's an acknowledged risk of a correction, but no risk of collapse."
Simcock says New Zealand won't follow the path the US housing market went down in 2006, which saw thousands of mortgagee sales, and also bank failures, and triggered the global financial crisis.
The UBS report says the median house in Auckland costs 9.8 times the median household disposable income. In Sydney, the multiple is 10.3. Houses in most other cities in New Zealand are priced at around six times the median income.
Broker bashing report debunked by new research
Brokers have overwhelming support from consumers, according to a new report. An Ernst & Young survey commissioned by the MFAA appears to have debunked a controversial report by consumer group Choice, demonstrating broad support for mortgage brokers.
While Choice's secret shop - the details of which the consumer group has refused to divulge to the companies surveyed - claimed brokers were providing inadequate service and failing to comply to NCCP disclosure measures, the Ernst & Young report found 92% of broker customers were satisfied with the service they were provided. Brokers also saw a net promoter score of 31, with 44 per cent of broker clients saying they would recommend the broker proposition, versus 13 per cent who said they wouldn't.
"Although customers feel they receive a superior experience from brokers, a few areas were highlighted for further development. First, a small proportion of customers felt that the commissions received by brokers influenced the recommendation made, particularly where the broker had a relationship with the lender. Second, customers felt that the broker could play a broader role in arranging other financial products," the association said.
According to the Bloomberg Business news, the Australian banking regulator expects to see slower growth in investor mortgages that have helped drive a housing boom in Sydney and Melbourne and warned it will continue to monitor lending standards.
Banks have had long enough to “revise their ambitions” and the Australian Prudential Regulation Authority will “be watching carefully to see a moderation in growth in investor lending in the second half of the year,” Chairman Wayne Byres said in a speech in Sydney Wednesday.
The regulator has agreed plans with banks and will be “monitoring closely to see that they kick into effect,” he said without giving further details. Landlords have fueled a surge in house prices with Sydney homes now costing 40 percent more than they did three years ago.
“Given the importance of housing-related lending, it should not be surprising that APRA supervisors are increasingly vigilant on the risks this lending presents,” Byres said, according to the text of his speech. “Put simply, if all our eggs are increasingly being placed in one basket, we need to make sure the basket isn’t dropped.”
Banks feeling the crunch of soaring house prices
UBS Securities warns soaring house prices in Auckland, Sydney and Melbourne risk making banks vulnerable, according to an article from New Zealand Herald.
In a report UBS indicates that if housing prices continue to rise, the New Zealand and Australian central banks will intervene and there's an increased chance of a future economic shock. Christopher Simcock, head of corporate client solutions at UBS New Zealand, says though the risks are real, the report's conclusions are not alarming. "There's an acknowledged risk of a correction, but no risk of collapse."
Simcock says New Zealand won't follow the path the US housing market went down in 2006, which saw thousands of mortgagee sales, and also bank failures, and triggered the global financial crisis.
The UBS report says the median house in Auckland costs 9.8 times the median household disposable income. In Sydney, the multiple is 10.3. Houses in most other cities in New Zealand are priced at around six times the median income.
Broker bashing report debunked by new research
Brokers have overwhelming support from consumers, according to a new report. An Ernst & Young survey commissioned by the MFAA appears to have debunked a controversial report by consumer group Choice, demonstrating broad support for mortgage brokers.
While Choice's secret shop - the details of which the consumer group has refused to divulge to the companies surveyed - claimed brokers were providing inadequate service and failing to comply to NCCP disclosure measures, the Ernst & Young report found 92% of broker customers were satisfied with the service they were provided. Brokers also saw a net promoter score of 31, with 44 per cent of broker clients saying they would recommend the broker proposition, versus 13 per cent who said they wouldn't.
"Although customers feel they receive a superior experience from brokers, a few areas were highlighted for further development. First, a small proportion of customers felt that the commissions received by brokers influenced the recommendation made, particularly where the broker had a relationship with the lender. Second, customers felt that the broker could play a broader role in arranging other financial products," the association said.
