Fixed rates slashed
A lot of what gets reported on the housing market relates to or is driven by what was happening 6-12 months ago.
Some lenders were virtually on strike last year, and indeed well into 2019 as the banking Royal Commission dragged on.
But in real time we're now just beginning to see a behavioural change, with banks offering tasty discounts on their mortgage products, and with special offerings often kicking in from around just 3½ per cent.
The trend towards lower mortgage rates shouldn't be too much of a surprise.
Bond yields have plunged, while the crudest measures of short-term funding costs have continued to collapse to the lowest levels we've seen since 2017.
In particular there are now some very tasty fixed rate mortgage deals on offer, so now might be a good time to have a yarn with your friendly mortgage broker.
Tapping the accelerator
Perhaps more important than the discounted mortgage rates on offer is simply the observable change in behaviour.
Don't forget that banks have been severely chastened, and some have seen other parts of their business quashed (e.g. wealth management, advice, etc.).
So ultimately they will need to get lending money again to make money, and specifically on property.
And it will likely come from the very top, since the Big 4 lenders have been losing market share in recent years.
CBA and ANZ saw their respective share prices up by 2 per cent today, and the other majors notched notable gains too.
It's not all just about the largest lenders, though, and rate wars are returning across the spectrum.
Pendulum swings back
Bit by bit the paranoia is thawing out, and the pendulum is now swinging back in the other direction towards equilibrium.
There will be some pull-forward of demand from housing market investors in H2 2019, as borrowers rush to beat the proposed 1 January 2020 deadline for Labor's tax changes.
That said, if investors are borrowing for 3 years on interest-only terms from 3.69 per cent, negative gearing shouldn't be featuring too much in their strategies anyway (which, incidentally, is another whack to Labor's controversial costings).
