UBS is out with another of its evidence lab reports surveying a statistically valid 1008 of mortgage applicants. The results are not good (or are good depending on your perspective):
…in the final quarter of the survey (April-July 2018) there was a statistically significant increase in mortgage accuracy. During 4Q a record 76% of respondents stated they were “completely factual and accurate”, up sharply from 65% in the prior 3 quarters.
This rise in mortgage compliance leads Jonathon Mott to conclude that credit crunch risks are intensifying:
With the Royal Commission taking a much more rigorous interpretation of the Responsible Lending laws and limits on “very high” Debt-to-Income (DTI >6x) lending, credit conditions are expected to tighten further. In addition, bank Boards are becoming more risk adverse, likely changes to broker compensation may reduce broker penetration and Comprehensive Credit Reporting will provide a more complete picture of a borrower’s indebtedness.
Add negative gearing reform, migrants to regions, fleeing Chinese, more bank mortgage rate hikes, the interest-only reset and supply deluge and “don’t buy now” springs to mind.
