Mortgag sizes up
The interaction between two interest rate cuts and changes to serviceability assessments increased the propensity of some individuals to borrow in August.
This adds some weight to Grattan's arguments, which admittedly I railed against a bit the other day.
Mea culpa.
This adds some weight to Grattan's arguments, which admittedly I railed against a bit the other day.
Mea culpa.
Excluding refinancing, the average loan size increased to $414,007 in August 2019, up from $399,898 a year earlier.
When it comes to mortgages some of the commentariat seems to have lost its collective mind, in the mad charge to demonise debt.
In reality, though, economies need a flow of credit to thrive, interest serviceability has improved by more than a third, mortgage arrears are very low ex-Western Australia, and Australia's median household wealth is now the highest in the world.
My good pal Stephen 'The Kouk' Koukoulas of Market Economics explored some of these ideas yesterday at Yahoo here.
It's important to note that although mortgage sizes have increased a little, transaction volumes are still low.
Popular narratives this year have included a rush for the exits, or a swathe of forced property sales due to the interest-only reset.
But the truth is new listings have never previously been as low as they are today for this time of year (at least since accurate records began):
Source: CoreLogic
Detailed figures from SQM Research showed that there has been a dramatic fall in the stock on market in Sydney since peaking in October 2018.
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Edit:
Australian Finance Group (ASX: AFG) also released its latest mortgage index for the September 2019 quarter.
And it too recorded a leap in the average mortgage size over the most recent 3-month period.
The jump was driven by a surge in New South Wales, though record average mortgage sizes were actually recorded everywhere except for the Northern Territory.
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Edit:
Australian Finance Group (ASX: AFG) also released its latest mortgage index for the September 2019 quarter.
And it too recorded a leap in the average mortgage size over the most recent 3-month period.
The jump was driven by a surge in New South Wales, though record average mortgage sizes were actually recorded everywhere except for the Northern Territory.
AFG recorded only an 18 per cent market share for interest-only loans, with the rebound being driven by homebuyers, and only 26 per cent of loans going to investors.
First homebuyers saw their highest market share since 2013, while major banks captured their lowest market share since all the way back in 2007.
Overall, there were record lodgements totalling $15.7 billion over the September quarter, up 21 per cent from the prior quarter, and up 11 per cent from the same period a year earlier.
First homebuyers saw their highest market share since 2013, while major banks captured their lowest market share since all the way back in 2007.
Overall, there were record lodgements totalling $15.7 billion over the September quarter, up 21 per cent from the prior quarter, and up 11 per cent from the same period a year earlier.
