Australian Economy

Australia’s Property Market “Safe as Houses”: Treasurer.

Earlier this week, Australia’s Federal Treasurer Scott Morrison reassured foreign lenders that “Australian housing values, while high, are still ‘real’.” “Safe as houses still broadly means something in Australia,” He went on to say, “The rise in housing values has been driven principally by genuine economic forces of supply and

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Australian Economy

Australian Banks placed on Credit Watch Negative

Credit rating agency Fitch has placed Australia’s banks on a negative credit watch, citing an increase in macro-economic risks stemming from the property asset bubble. Fitch indicated a key risk for the banking system was the banks’ exposure to the overheated property market. Of special concerned is strong increases in

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Australian Economy

Up, up and away. Why are mortgage rates on the rise?

Australia’s property investors and debt slaves were in shock on Friday, when Westpac joined the ranks of smaller banks, significantly hiking mortgage rates out of cycle, on its fixed term loans. Westpac’s five year fixed investment loan will jump 60 basis points or 2.4 times the standard Reserve Bank increase

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Australian Economy

Systemic mortgage fraud under investigation

Australia’s unprecedented housing bubble has forced a significant number of mortgage applicants to falsify loan applications, simply to get a foothold in the ever challenging market. A recent UBS survey found mortgage fraud in Australia was rife, with 28 per cent of applicants admitting to falsifying loan documents. Many had

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Australian Economy

More homes left empty as rental yields decline

Negative gearing was intended to create more affordable housing, but as house prices surge, causing rental yields to tumble, more evidence is mounting to the contrary. Research by UNSW’s City Futures Research Centre has found a higher concentration of vacant homes in the inner cities. When it investigated further, it

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Australian Economy

Squatters make WA home

Western Australia’s highest residential vacancy rate in decades has turned the state into a hot spot heaven for squatters. Squatters are finding home in some of the tens of thousand vacant properties sitting idle in WA. Some are changing the locks and threatening landlords. Others are conducting their own renovations

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Australian Economy

Australia’s big 4 banks “almost too big to get sick”

Australia’s banking regulator has expressed “perpetual concern” about the dominance of Australia’s big four banks in the lending market. Charles Littrell, Australian Prudential Regulation Authority (APRA) supervision general manager told a Centre for International Finance and Regulation showcase event on Thursday, “In 1990, the four major banks had 40 per

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Australian Economy

OECD: Housing crash could be “dramatic and destabilising”

“Domestically, the unwinding of housing-market tensions to date may presage dramatic and destabilising developments, rather than herald a soft landing.” This is the latest warning from the OECD Economic Outlook and comes after the Reserve Bank of Australia stoked the hot coals last month, slashing the official cash rate by

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Australian Economy

Banks tighten screws on foreign buyers

All four of Australia’s big banks have tightened lending for foreign buyers over the past months, some blaming increased regulatory requirements. Under the Basel III banking reforms, banks will face higher capital requirements on loans reliant on foreign income. Highly elevated house prices and paltry rents in Australia means rental

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Australian Economy

More sizable deposits required as property bubble reaches tipping point

Borrowers are having to pay larger housing deposits in 2016 as lenders re-evaluate their risk appetite, according to Genworth. Genworth Mortgage Insurance Australia Limited is Australia’s largest provider of Lenders Mortgage Insurance (LMI). LMI protects the lender when borrowers default on their home loans. According to the Chief Executive Officer,

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Australian Economy

Australia joins club deflation, cuts cash rate.

The Reserve Bank of Australia (RBA) has today acknowledged the Australian economy is slowing more rapidly than forecast, deciding to slash the official cash rate by 25 basis points to a record low of just 1.75 per cent. It follows ugly stats out last week from the Australian Bureau of

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Australian Economy

ABC Four Corners: Home Truths

The ABC’s Four Corners has aired an excellent story tonight showing how tax distortions such as negative gearing has created one of the world’s largest housing bubbles: Watch the 45 minute segment here.