Australian Property

No wonder house prices are falling faster.

Via Moody’s: Summary Australian mortgage delinquencies will increase over the next two years as a record number of interest-only (IO) mortgages convert to principal and interest (P&I) loans, a credit negative for residential mortgage-backed securities (RMBS).

By Leith van Onselen With the volume of residential property transfers and sales crashing across NSW: And Sydney dwelling values falling: NSW real estate numbers have fallen for the first time in five years, chart from The AFR: Yet another partial indicator confirming Sydney’s housing correction.

Via S&P: Arrears on the mortgages underlying Australian residential mortgage-backed securities (RMBS) increased marginally during the second quarter of 2018, according to S&P Global Ratings’ latest edition of “RMBS Performance Watch: Australia.” Prime mortgage arrears have averaged around 1.37% for 2018.

So says RBA and APRA: …the adjustment in the Sydney and Melbourne housing market was “being well managed to help create a sustainable housing market” and while global growth was growing above trend, there were three main downside risks.

By Leith van Onselen Back in May, The AFR reported that “mortgage revaluations of second-hand homes in inner Brisbane are 20 to 30 per cent below their exchanged prices as oversupply fears continue to hit the Queensland capital city”.

Via ABC: Westpac will increase its variable mortgage rates to counter rising funding costs that are threatening the bank’s profit margins.

Via the AFR today: Immigrants are underpinning Australia’s largest house and land market, with more than 65 per cent of second-quarter greenfield land sales in Melbourne to buyers born outside Australia, figures from consultancy Oliver Hume show.

By Leith van Onselen Reverse mortgages have yet to take-off in a big way across Australia.

Ding, ding, ding.

Yep, it’s a secular decline in house prices ahead.

By Leith van Onselen As Australia’s credit crunch lakes hold, a generation of mortgage prisoners has been born: At the weekend, I ran into a very worried developer who in June and July had been selling his land as fast as he could get it on the market.