Banks tighten mortgage screw on Sydney leper colony

“Team Australia” has been breaking apart for some time now as premiers and federalies tear at each other’s throats. The media is enjoying the COVID state of origin. Now the banks have joined in:

  • CBA is tightening leading criteria focussed specifically on any loss of income incurred owing to COVID.
  • JobKeeper-syle payments will not longer qualify.
  • Resimac is specifically targeting the NSW leper colony with COVID questions.
  • Lending delays are lengthening as greater scrutiny is brought to bear.
  • Citi has capped DTIs.
  • More lenders are expected to follow suit, according to brokers.

Looks like this will slow leper colony property prices at the margin.

And why not? The banks are no longer getting free money from the RBA so why should they give fee money to anybody else? Or, could the RBA resume the TFF?

Pushing the Reserve Bank of Australia toward the brake pedal on its plans to slowly dial back support for the economy is the delta variant of the virus. A sudden upsurge in infections has dramatically changed the outlook Down Under from the optimism of a swift recovery to the gloom of extended lockdowns and a shrinking economy.

“Current Covid-19 developments and heightened uncertainty suggest the optics around beginning a taper in September are challenging,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada.

“While continuing with the current A$5 billion weekly purchase pace is likely to have limited impact, it’s an important signal as Team Australia — federal and state governments, the RBA and banks — reunites,” she said.

No TFF, no Team Australia from the banks.

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