Source: Your Mortgage.
Building approvals surged in November, spurred on by a sharp increase in new apartment buildings in NSW according to the latest data from the Australian Bureau of Statistics (ABS).Total units approved jumped by 8.9% after dropping by 3.6% in October. There were 14,620 dwelling approvals in November - the highest result in three and a half years. On a year-on-year basis, this represents 14.6% growth in new buildings approved. Detached housing remained in the doldrums however, notching up a small gain of 0.30%.CommSec chief economist Craig James says that the trends are very "encouraging". "For the first time in almost three years, the number of approvals can be finally described as 'above-normal', that is, above the longer-run averages," he says. "Overall, we believe that there's a light at the end of the tunnel for the beleaguered home building industry. Demand for accommodation is soaring, with population growth at the strongest pace in 18 years, while supply of new homes has been struggling to keep up."The strong numbers are also seen as a sign that investors may be shifting their attention from the sharemarket following a massive decline in the recent weeks."It may be the case that investors are warming to higher house prices and surging rents, and starting to shift attention from the sharemarket to the property market," says James. "Property will be seen as an especially favourable investment destination if the sharemarket continues its soggy performance in coming months."Housing Industry Association (HIA) chief economist Harley Dale says the strong numbers from the unit sector may indicate that the bottom of the cycle has passed, however he warns that there is a long recovery road ahead following four years of weakness."The first half of 2008 is going to be a challenging period for new home building amidst upward pressure on interest rates. It will be difficult for a sustained recovery in new home building to emerge," says Dale.
If you are looking to purchase a home make sure you choose the best loan for you. Visit www.goodloanguide.net for simple home loan help and tips in choosing the right mortgage for you.
Monday, January 14, 2008
Friday, January 11, 2008
CBA increases home loan rates
Source: LendingCentral.com.au
All eyes are on Westpac Banking Corporation Ltd and St George Bank Ltd after the Commonwealth Bank of Australia Ltd (CBA) succumbed to the global credit crisis and lifted interest rates.
CBA, the third major bank to lift rates, has increased its standard variable rate on home loans by 0.10 per cent to 8.67 per cent, effective from January 11.
The move by CBA follows in the footsteps of Australia and New Zealand Banking Group Ltd (ANZ) and National Australia Bank Ltd (NAB), which increased their variable interest rates independent of any action by the Reserve Bank of Australia.
Westpac and St George remain the only two major banks that have not increased their standard variable home loan rates - but analysts tip it is only a matter of time.
"We believe the other majors will follow shortly with similar standard variable mortgage rate increases," Macquarie Research Equities said in a January 8 client note.
A Westpac spokesman told AAP today that "rates remain under review".
CBA chief financial officer David Craig said the bank had been exposed to additional funding costs of about $100 million since the start of the credit crisis.
"The impact of the cost of the wholesale fund is something that is impacting all Australian banks," Mr Craig said in a statement.
CBA group executive of retail banking services Ross McEwan said the "modest increase strikes a good balance between the needs of our customers and shareholders".
"We have given careful consideration to the size of this increase and while a higher increase could be justified, we believe that the current level of wholesale funding rates will moderate from the high level experienced pre-Christmas," he added.
In addition to its standard variable interest rates, CBA is also lifting its variable business loans by 0.15 per cent.
A St George spokeswoman told AAP the bank was "still monitoring the market".
AAP
If you are not sure what type of loan is best for you in the current market, visit www.goodloanguide.net for help on choosing a loan structure that will work best for you.
All eyes are on Westpac Banking Corporation Ltd and St George Bank Ltd after the Commonwealth Bank of Australia Ltd (CBA) succumbed to the global credit crisis and lifted interest rates.
CBA, the third major bank to lift rates, has increased its standard variable rate on home loans by 0.10 per cent to 8.67 per cent, effective from January 11.
The move by CBA follows in the footsteps of Australia and New Zealand Banking Group Ltd (ANZ) and National Australia Bank Ltd (NAB), which increased their variable interest rates independent of any action by the Reserve Bank of Australia.
Westpac and St George remain the only two major banks that have not increased their standard variable home loan rates - but analysts tip it is only a matter of time.
"We believe the other majors will follow shortly with similar standard variable mortgage rate increases," Macquarie Research Equities said in a January 8 client note.
A Westpac spokesman told AAP today that "rates remain under review".
CBA chief financial officer David Craig said the bank had been exposed to additional funding costs of about $100 million since the start of the credit crisis.
"The impact of the cost of the wholesale fund is something that is impacting all Australian banks," Mr Craig said in a statement.
CBA group executive of retail banking services Ross McEwan said the "modest increase strikes a good balance between the needs of our customers and shareholders".
"We have given careful consideration to the size of this increase and while a higher increase could be justified, we believe that the current level of wholesale funding rates will moderate from the high level experienced pre-Christmas," he added.
In addition to its standard variable interest rates, CBA is also lifting its variable business loans by 0.15 per cent.
A St George spokeswoman told AAP the bank was "still monitoring the market".
AAP
If you are not sure what type of loan is best for you in the current market, visit www.goodloanguide.net for help on choosing a loan structure that will work best for you.
Friday, January 4, 2008
NAB increases rates amid credit crisis
National Australia Bank Ltd (NAB) has moved to increase interest rates as Australian households get swept up in the global credit crisis.
NAB has increased its variable home loan rate by 12 basis points to 8.69 per cent amid rising wholesale funding costs from the credit crunch.
The bank said the change equates to about $4.60 per week on the average NAB home loan.
NAB has also increased its HomeSide variable rates by 12 basis points, which will come into effect tomorrow, and its business lending variable rates by 15 basis points.
The hike in business lending variable rates comes into effect from January 7.
NAB said its wholesale funding costs have increased on average by 20 to 30 basis points over the past five months, peaking at 40 basis points in December.
Australia's largest mortgage holder, the Commonwealth Bank, this week also increased its rates when it lifted its fixed-rate home loans by 30 basis points to 8.64 per cent for one to four-year mortgages.
Make sure that you have the loanis best suited to your needs. Visit www.goodloanguide.net for tips on all you need to know about applying for the the right home loan.
NAB has increased its variable home loan rate by 12 basis points to 8.69 per cent amid rising wholesale funding costs from the credit crunch.
The bank said the change equates to about $4.60 per week on the average NAB home loan.
NAB has also increased its HomeSide variable rates by 12 basis points, which will come into effect tomorrow, and its business lending variable rates by 15 basis points.
The hike in business lending variable rates comes into effect from January 7.
NAB said its wholesale funding costs have increased on average by 20 to 30 basis points over the past five months, peaking at 40 basis points in December.
Australia's largest mortgage holder, the Commonwealth Bank, this week also increased its rates when it lifted its fixed-rate home loans by 30 basis points to 8.64 per cent for one to four-year mortgages.
Make sure that you have the loanis best suited to your needs. Visit www.goodloanguide.net for tips on all you need to know about applying for the the right home loan.
Wednesday, January 2, 2008
Families facing credit crunch
Source: Australian IT. January 1 2008
AUSTRALIAN households are about to be swept up in the global credit crunch, with the major banks raising interest rates across the board in an effort to protect their profit margins.
Lending rates for almost all loans - particularly fixed home loans, investment loans and some credit cards - have risen in recent weeks by more than the Reserve Bank's 25 basis-point increase in November.
Most at risk are credit card holders, who owe the banks a record $31 billion and face interest rates of up to 19.9 per cent as the Christmas bills fall due in coming months.
The Commonwealth Bank, the nation's biggest mortgage holder, yesterday became the latest bank to lift rates when it boosted all its fixed-rate home loans by 30 basis points to 8.64 per cent for one- to four-year mortgages.
The majority of fixed-rate loans, apart from the Commonwealth's, remain lower than the standard variable rate, which rose to 8.57 per cent in line with the Reserve Bank's November rate increase to an 11-year high of 6.75per cent.
Economists believe the mortgage rate could hit 9 per cent this year as the central bank is forced to raise official interest rates to contain inflation. Banks and other financial companies are raising rates faster than the Reserve Bank to recoup their higher borrowing costs in global financial markets. Interest rates have risen around the world in response to the crisis in the US sub-prime, or low-quality, mortgage market.
Cannex senior financial analyst Harry Senlitonga said there had been increases in fixed-rate loans by most of the major banks.
The rises come as new figures show the financial future for some families appears bleak, with consumer debt at record levels.
With record spending reported over Christmas, statistics from the Reserve Bank show the five interest rate rises over the past two years have failed to slow spending on credit. Personal loans and credit card debt held by consumers with the banks is at $151billion, up 13.2 per cent compared with a year ago.
According to the Australian Prudential Regulation Authority, the total credit card debt is at least $31.12 billion, with the main four banks dominating the market.
CommSec equities economist Martin Arnold said despite record employment levels, some families would have been forced to borrow to survive over Christmas. "The November rate hike has not dented the desire of households to borrow," he said. "Despite rising petrol prices and interest rates, borrowing remains firm and evidence suggests consumers have been spending heavily."
The ANZ has lifted some of its Gold Visa credit card rates to 19.9per cent, which prompted the NAB and Bank of Queensland to lift rates by 35 and 50 basis points on low-rate cards. The interest rate on BankSA cards was raised by 25 basis points to between 13.5per cent and 17.25 per cent.
The major banks have yet to raise their standard variable mortgage rates because of political pressure during the election campaign. They are also keen to keep pressure on non-bank lenders, such as Wizard, which rely more heavily on international credit markets for their funding rather than customers' deposits.
The variable rate offered at Bendigo Bank is now 8.6 per cent - slightly above the standard 8.57per cent - because of its reliance on the credit market.
Bryan Fitzgerald, a spokesman for the Commonwealth, said the bank was facing higher funding costs because of developments on world financial markets.
The NAB has said its costs are nearly 40 basis points higher than a year ago, before the sub-prime crisis hit. And the ANZ said some of its credit card rates were raised because the full 25 basis-point hike from the RBA was not passed on to customers in November.
Now is a better time than any to take a look at your current home loan structure. For great information on the pro's and con's of different home loan structures, visit www.goodloanguide.net and be an informed borrower.
AUSTRALIAN households are about to be swept up in the global credit crunch, with the major banks raising interest rates across the board in an effort to protect their profit margins.
Lending rates for almost all loans - particularly fixed home loans, investment loans and some credit cards - have risen in recent weeks by more than the Reserve Bank's 25 basis-point increase in November.
Most at risk are credit card holders, who owe the banks a record $31 billion and face interest rates of up to 19.9 per cent as the Christmas bills fall due in coming months.
The Commonwealth Bank, the nation's biggest mortgage holder, yesterday became the latest bank to lift rates when it boosted all its fixed-rate home loans by 30 basis points to 8.64 per cent for one- to four-year mortgages.
The majority of fixed-rate loans, apart from the Commonwealth's, remain lower than the standard variable rate, which rose to 8.57 per cent in line with the Reserve Bank's November rate increase to an 11-year high of 6.75per cent.
Economists believe the mortgage rate could hit 9 per cent this year as the central bank is forced to raise official interest rates to contain inflation. Banks and other financial companies are raising rates faster than the Reserve Bank to recoup their higher borrowing costs in global financial markets. Interest rates have risen around the world in response to the crisis in the US sub-prime, or low-quality, mortgage market.
Cannex senior financial analyst Harry Senlitonga said there had been increases in fixed-rate loans by most of the major banks.
The rises come as new figures show the financial future for some families appears bleak, with consumer debt at record levels.
With record spending reported over Christmas, statistics from the Reserve Bank show the five interest rate rises over the past two years have failed to slow spending on credit. Personal loans and credit card debt held by consumers with the banks is at $151billion, up 13.2 per cent compared with a year ago.
According to the Australian Prudential Regulation Authority, the total credit card debt is at least $31.12 billion, with the main four banks dominating the market.
CommSec equities economist Martin Arnold said despite record employment levels, some families would have been forced to borrow to survive over Christmas. "The November rate hike has not dented the desire of households to borrow," he said. "Despite rising petrol prices and interest rates, borrowing remains firm and evidence suggests consumers have been spending heavily."
The ANZ has lifted some of its Gold Visa credit card rates to 19.9per cent, which prompted the NAB and Bank of Queensland to lift rates by 35 and 50 basis points on low-rate cards. The interest rate on BankSA cards was raised by 25 basis points to between 13.5per cent and 17.25 per cent.
The major banks have yet to raise their standard variable mortgage rates because of political pressure during the election campaign. They are also keen to keep pressure on non-bank lenders, such as Wizard, which rely more heavily on international credit markets for their funding rather than customers' deposits.
The variable rate offered at Bendigo Bank is now 8.6 per cent - slightly above the standard 8.57per cent - because of its reliance on the credit market.
Bryan Fitzgerald, a spokesman for the Commonwealth, said the bank was facing higher funding costs because of developments on world financial markets.
The NAB has said its costs are nearly 40 basis points higher than a year ago, before the sub-prime crisis hit. And the ANZ said some of its credit card rates were raised because the full 25 basis-point hike from the RBA was not passed on to customers in November.
Now is a better time than any to take a look at your current home loan structure. For great information on the pro's and con's of different home loan structures, visit www.goodloanguide.net and be an informed borrower.
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