One of Australia's big four has raised mortgage rates for landlords… Australia moving to stabilise Sydney market… GST rise on new homes will harm affordability...
ANZ ups mortgage rate for landlords
Australia & New Zealand Banking Group Ltd. is raising the mortgage rate for landlords, the first major Australian lender to do so amid a regulatory crackdown to temper soaring home prices, according to an article in Bloomberg.
The country’s fourth-largest mortgage lender will increase its variable rate by 27 basis points to 5.65 per cent and fixed rate by 30 basis points from Aug. 10, it said in a statement recently. This is the first time since 1997 that owner-occupiers will get better rates than investors, Melbourne-based spokesman Stephen Ries said in an interview.
ANZ’s move is the latest in a series of steps by lenders after a 43 per cent surge in Sydney’s home prices since May 2012 fueled concerns of a property bubble. Banks have also removed interest-rate discounts on home loans to investors and this month lowered the amount they can borrow relative to the value of the property.
“The decision to raise interest rates for residential investment lending has been difficult but necessary,” Mark Whelan, the chief executive officer of ANZ’s Australian unit, said in the statement. “This is a considered decision that takes into account our customers’ position and the criteria we look at when setting rates including our competitive position, our regulatory obligations and the state of the residential property market.”
Australia moving to stabilise Sydney market
Fast-rising house prices are prompting regulators in New Zealand and Australia to try, or consider, measures to prick nascent bubbles in single cities, an unusual move for any country, according to an article in the Wall St. Journal.
In Auckland, New Zealand’s biggest city, property prices have jumped 17 per cent over the past year, compared with a nationwide average of 9.3 per cent, and now are more than 50 per cent higher than eight years ago. Sydney prices have risen about four times as fast as those in almost all other Australian state capitals in the past 12 months.
Until now, Australian policy makers have sought to temper house-price growth by restricting lending to speculators and making it costlier to provide mortgages to residential buyers generally, anywhere in the country. In the past several weeks, however, the central bank has made clear it sees the issue as essentially a local one, describing soaring prices in the nation’s most populous city as “crazy.”
The narrowing focus on Sydney has triggered speculation that similar moves to New Zealand’s may be in the offing, steered by the banking regulator. “The boom is now quite singularly in Sydney,” said George Tharenou, an economist at UBS AG. “It’s difficult and very micro to target Sydney house prices, but it’s getting to the point where it needs to be considered.”
GST rise on new homes will harm affordability
Increasing the GST on new homes will add tens of thousands of dollars to new home prices and make owning a home even more out of reach for many Australians, says a major housing association.
According to Housing Industry Association chief executive of industry policy and media, Graham Wolfe, new housing is already weighed down by the burden of tax, so increasing the GST will destroy housing affordability in an already unaffordable market.
“Adding another five per cent, or more, on top of the price of a new home will put housing out of reach of many people that are trying desperately to get into the market,” he said.
“An increase of five per cent in the GST on a typical house and land package in Sydney will increase the cost of a mortgage by around $60,000 over the life of the loan.”
Australia & New Zealand Banking Group Ltd. is raising the mortgage rate for landlords, the first major Australian lender to do so amid a regulatory crackdown to temper soaring home prices, according to an article in Bloomberg.
The country’s fourth-largest mortgage lender will increase its variable rate by 27 basis points to 5.65 per cent and fixed rate by 30 basis points from Aug. 10, it said in a statement recently. This is the first time since 1997 that owner-occupiers will get better rates than investors, Melbourne-based spokesman Stephen Ries said in an interview.
ANZ’s move is the latest in a series of steps by lenders after a 43 per cent surge in Sydney’s home prices since May 2012 fueled concerns of a property bubble. Banks have also removed interest-rate discounts on home loans to investors and this month lowered the amount they can borrow relative to the value of the property.
“The decision to raise interest rates for residential investment lending has been difficult but necessary,” Mark Whelan, the chief executive officer of ANZ’s Australian unit, said in the statement. “This is a considered decision that takes into account our customers’ position and the criteria we look at when setting rates including our competitive position, our regulatory obligations and the state of the residential property market.”
Australia moving to stabilise Sydney market
Fast-rising house prices are prompting regulators in New Zealand and Australia to try, or consider, measures to prick nascent bubbles in single cities, an unusual move for any country, according to an article in the Wall St. Journal.
In Auckland, New Zealand’s biggest city, property prices have jumped 17 per cent over the past year, compared with a nationwide average of 9.3 per cent, and now are more than 50 per cent higher than eight years ago. Sydney prices have risen about four times as fast as those in almost all other Australian state capitals in the past 12 months.
Until now, Australian policy makers have sought to temper house-price growth by restricting lending to speculators and making it costlier to provide mortgages to residential buyers generally, anywhere in the country. In the past several weeks, however, the central bank has made clear it sees the issue as essentially a local one, describing soaring prices in the nation’s most populous city as “crazy.”
The narrowing focus on Sydney has triggered speculation that similar moves to New Zealand’s may be in the offing, steered by the banking regulator. “The boom is now quite singularly in Sydney,” said George Tharenou, an economist at UBS AG. “It’s difficult and very micro to target Sydney house prices, but it’s getting to the point where it needs to be considered.”
GST rise on new homes will harm affordability
Increasing the GST on new homes will add tens of thousands of dollars to new home prices and make owning a home even more out of reach for many Australians, says a major housing association.
According to Housing Industry Association chief executive of industry policy and media, Graham Wolfe, new housing is already weighed down by the burden of tax, so increasing the GST will destroy housing affordability in an already unaffordable market.
“Adding another five per cent, or more, on top of the price of a new home will put housing out of reach of many people that are trying desperately to get into the market,” he said.
“An increase of five per cent in the GST on a typical house and land package in Sydney will increase the cost of a mortgage by around $60,000 over the life of the loan.”
