RBA quantifies the home loan loyalty tax

Bankers have rejected the idea that long-standing customers with mortgages are paying a “loyalty tax” in the form of higher rates than the rates new customers pay. But Reserve Bank analysis shows that is exactly what is happening. According to…

Kavanagh

Treasurer Josh Frydenberg isn’t getting any support from the Reserve Bank for his argument that the banks should not apply responsible lending laws “too stringently”. Frydenberg said in a speech last week: “The risk that the provision of credit may…

Kavanagh

An investment in the Australia equity market has been remarkably consistent over the past 100 years. Investors can expect a total return of around 10 per cent long term A paper in the latest Reserve Bank Bulletin is based on…

Surviving the deposit rate crash

Banks and other deposit takers made their call on a Reserve Bank cut well before the central bank got around to last week’s 25 basis point cut, with a large number of them cutting their term deposit rates. The rate…

RBA rate cut will hurt bank profits

The problem for banks, following last week’s cash rate cut, is that they can’t cut the rates on all their deposits, in line with the cuts to mortgage rates. Their margins are being squeezed. In its commentary on the impact…

Margin lending out of favour with investors

Margin lenders are sharing the pain their peers in the mortgage and personal loan markets are feeling; no one wants their product. The latest Reserve Bank margin lending figures show falls in account numbers and balances in the March quarter,…

Negative equity incidence ‘low’ and not a risk

The Reserve Bank has rejected suggestions coming from some quarters that around 10 per cent of mortgage borrowers are in negative equity. A review of house price falls and negative equity in RBA’s latest Financial Stability Review says the incidence…

Kavanagh

If we accept the proposition that the slowdown in mortgage lending over the past couple of years has been a big factor in the fall in house prices, then the latest mortgage market figures suggest the residential property market recovery…

Kavanagh

One of the big concerns heading into 2019 is the high level of corporate and consumer debt around the world. Household debt is high in Australia and is a worry, given housing price trends. A few months ago, the Reserve…

Kavanagh

A big concern for investors over the past year has been the slowing home loan market. A slowdown in mortgage lending is bad news for bank earnings and for property prices. The latest Reserve Bank figures, released on Friday, show…