Macroprudential tools – that is, stricter capital requirements on mortgage banks – is under discussion given Australia's investor-driven growth in home prices. But Glenn Stevens told the Melbourne Economic Forum he was "not naive enough" to believe everything rests on those tools. "At the margin they might be helpful, and that's the kind of thing that's in my mind – nothing more.” The RBA issued an uncharacteristically strong warning this week about the potential of a housing market crash to damage the economy if property investment continues to displace homeowners in the market, particularly in Sydney and Melbourne. Read the full story here.
LJ Hooker up for sale
Investment bank Lazard will help the owners of the iconic residential real estate firm LJ Hooker sell the business. It doesn't appear likely that the firm will be listed on the exchanges, as McGrath Estate Agents is considering, and there's no telling what the firm may be worth. But with a torrid property market, LJ Hooker's valuation may not be this high again soon. LJ Hooker has 700 franchises in Australia and in New Zealand and a growing presence in Asia. Read the full story here.
Lenders and investors tell the RBA to keep their paws off the mortgage market
With talk exploding about enacting new measures to curb speculative investment in property to prevent a bubble from tanking the economy, lenders and investors appear to be pushing back. Australian Bankers Association chief executive Steve Munchenberg warned of unintended consequences, like making the market even harder for first-time homebuyers to enter. Peter Nash, chairman of big four accounting firm KPMG, said he believes the RBA is talking up regulatory moves so that the banks do their job for them to keep the government from cracking down. And Robert Penaloza, head of Australian equities at Aberdeen Asset Management, said a crackdown with tighter loan-to-valuation ratios or capital requirements could damage the nation's pivot away from mining. Read the full story here.
Household balance sheets are getting stronger despite increased debt load
Low interest rates might be fuelling an increase in prices, but for some it's also fuelling improvement to their household finances. The number of mortgage holders pre-paying interest has been rising, with net worth per household also rising, according to figures released by the Reserve Bank of Australia. The RBA's biannual stability review shows 15 per cent of households stashing two years’ worth of repayments or more into their mortgage offset and redraw accounts. Contrast that with delinquencies under 2 per cent. Read the full story here.
Collections: Mortgage News