Australian banks

In today’s Macro Breakdown I discuss why I believe that Australia’s household debt load – ranked second highest in the world – poses a problem for the Australian economy in the era of rising interest rates.

The Bank for International Settlements (BIS) has released its global household debt statistics for the September quarter of 2021. This data shows that Australia still has the second highest stock of household debt in the world when measured against the size of its economy, as measured by Gross Domestic Product (GDP).

While economists continue to debate the timing of when the Reserve Bank of Australia (RBA) will begin to lift the cash rate from its all-time low of 0.1%, Australian fixed fixed mortgage rates continue to ratchet higher.

This is some monetary egghead stuff but it is very important.

Last year, Treasurer Josh Frydenberg drafted legislation to wind back of responsible lending laws, telling reporters they are essential to helping the economy recover from COVID: “Ensuring consumers and small businesses can get timely access to credit as the economy continues to recover from the COVID crisis”.

The Reserve Bank of Australia (RBA) has released its private sector credit aggregates data for the month of December.

Lender Firstmac believes that debt-to-income mortgage curbs are on APRA’s agenda: Brisbane-based Firstmac… argued the regulator seemed poised to introduce some new steps.

As regular readers know, I consider the growth in new mortgage commitments to be the key indicator or property prices.

The Bank for International Settlements (BIS) has released its global household debt statistics for the June quarter of 2021. This data shows that Australia still has the second highest stock of household debt in the world when measured against the size of its economy, as measured by Gross Domestic Product (GDP).

The Reserve Bank of Australia (RBA) has released its private sector credit aggregates data for the month of October.

The Australian dollar is sitting right on vital support as markets digest Omicron.

It’s been the bubble that just won’t die.

Research undertaken on behalf of the Finance Brokers Association of Australia shows that an official interest rate rise of just 1% would be enough to push many homeowners into mortgage stress.

Coolabah Capital with the note: Folks are starting to turn their minds to what life looks like after the end of the RBA’s bond purchase program (aka quantitative easing or QE).

The Australian Prudential Regulatory Authority (APRA) has advised banks that it may implement tougher macro-prudential mortgage curbs if they don’t take action to rein-in higher risk lending.

As noted over the past week, the RBA’s bond market back-up is going to kill sub-2% fixed-rate mortgages in short order.

The Reserve Bank of Australia (RBA) has released its private sector credit aggregates data for the month of September.

Without putting too fine a point on it, macroprudential tightening has been bad for Aussie banks in the past.

The Australian mortgage market fell in August amid lockdowns, according to new data released today by the Australian Bureau of Statistics (ABS).

BankingDay with the note: The two-months’ worth of much anticipated industry data on loan deferrals produced by APRA late yesterday can only add to the belief there will be an early shift to macroprudential controls on bank lending in the mortgage market.