Australian banks

As we know, the Australian Prudential Regulator, APRA, is corrupt.

APRA chairman Wayne Byers today in parliament: “It’s not our job to solve house prices and its nor our job to solve house pricing affordability.

Late last year, the Reserve Bank of New Zealand (REINZ) announced plans to increase tier one capital requirements for all systematically important banks to 16% of risk weighted assets, up from 13.5%.

Mwahaha.

The AFR is today reporting that house price controls are imminent from regulators: Apparently “pressure” is building on the RBA to slow house prices though from where that pressure is coming the article does not say (because let’s face it, there isn’t any).

CoreLogic has released its March Housing Market Update report, which contains the below chart showing the sharp fall in mortgage rates over the past year across various owner occupied and investor loan types and terms.

In recent weeks we have seen mortgage rates ratchet lower despite no change in the RBA cash rate. Westpac last week announced that it slice its two and three-year fixed mortgage rates by up to 20 basis points to a record low 1.79% (two-year), 1.88% (three-year), and 1.89% (four-year).

A lack of support in the Senate has prompted the Morrison Government to put its draft legislation to abolish responsible lending laws on the backburner until at least June.

The Morrison Government recently put its proposed changes to responsible lending laws on hold, with the Senate now scheduled to vote on the bill in June.

Despite the RBA cash rate remaining at a record low 0.1% for five consecutive months, Australian mortgage rates continue to drift lower.

Via George Tharenou at UBS: Higher risk home loans up significantly in Q4 across DTI, LVR and IO shares We previously argued that macroprudential policy tightening by regulators (via the CFR, which includes APRA and the RBA) is just a matter of timing (& is instead of rate hikes).

Having swung from beloved Premier to banking lobbyist, it is clear that “Evil” Anna Bligh is the greatest public policy apostate in the Australian political economy (and that’s saying something).

The floor continues to fall out from under the mortgage market, especially with respect to fixed rates.

Economists and consumer groups have warned that the Morrison Government’s announced axing of responsible lending laws will fuel property inflation by enabling borrowers to take on more debt and bid up prices.

History doesn’t repeat but it sure does rhyme.

As we know, the RBA is on record saying that it won’t raise interest rates before 2024 and that it is quite happy for house prices to rise for the economy to enjoy the economic spillovers.

Record low interest rates and households awash with stimulus money is having interesting effects on Australian borrowing habits.

The Australian mortgage market has continued its record run, according to new data released today by the Australian Bureau of Statistics (ABS). Total mortgage commitments (excluding refinancings) rose another 10.5% in January to be up a whopping 44.3% year-on-year.

The Reserve Bank of Australia (RBA) has released mortgage growth figures for January, which continued to strengthen on the back of owner-occupiers. Quarterly mortgage growth rose to 1.14% in January – the 6th consecutive monthly increase – and is now experiencing its strongest growth since September 2018 (see next chart).