Trending Financial News 19 July
Hong Kong protests ignite property market in Australia
Foreigners are back in the Australian property market after largely disappearing in 2018 and early 2019 according to quarterly business confidence research by NAB.
“The trend decline in foreign buyers of new property in 2018 and early 2019 reversed [in the three months to June 30),” read the NAB research report.
“Their market share rising to 7.1 per cent in [the last three months], led by a sharp jump in Victoria, up 12.1 per cent.”
“While this may be just a blip,” said the research, “Australian dollar weakness, further falls in local prices (particularly in key cities) and recent political unrest in Hong Kong may have reignited some interest.”
Australia is heading for negative interest rates say experts
The Reserve bank will print more money then slash the official cash interest rate to below zero if unemployment and economic conditions don’t improve quickly, says economist Marcel Thieliant from Capital Economics.
Mr Thieliant said if two further cuts to the cash rate, taking it to 0.50 percentage points (from 1.0 per cent now), don’t stimulate demand and inflation, the RBA will consider loosening money supply.
The next stage contingency plan would involve the RBA cutting interest rates to – 0.50 per cent, or half of one per cent below zero.
Mr Thieliand said there was a 30 per cent chance of the RBA having to resort to unconventional strategies like this.
New bank approved for Australia
A new online bank has been approved and granted a full banking license in Australia. The bank, called 86 400, has been developed by CUSCAL, the operator of many services for Australia’s credit union sector.
86 400 CEO Robert Bell
86 400’s chief executive Robert Bell is ambitious to take market share from the Big Four.
Bell said 86 400’s loans and accounts will be offered via smart phones.
“In Australia there are about nine million bank customers who already predominantly do their banking by mobile phone.
“We’ll have a particular focus on the four million-plus retail banking customers aged between 25 and 45 years.”
Bell said the 86 400 mobile only banking service will be available in app stores in “a few weeks' time”, initially offered for those who have signed up for 86 400's waitlist.
Initially 86 400 will offer a Visa debit card transaction account supporting Apple Pay, Google Pay, Samsung Pay, FitBit Pay and Garmin Pay.
House prices are expected to keep falling
House prices will continue to fall over the next 12 months according to a survey of 350 industry experts released yesterday by NAB. The property professionals expect national house prices to fall -0.2 per cent over the next year. Three months ago the same survey found the property professionals expected prices to fall by 2.2 per cent.
The survey found that the property professionals believe house prices will bounce back and grow by 1.1 per cent in two years’ time.
New NAB boss makes big promises
National Australia Bank has appointed a new chief executive, former Commonwealth Bank and Royal Bank of Scotland executive Ross McEwan as its new chief executive.
New NAB chairman Phil Chronican said: “Ross McEwan is the ideal leader for NAB as we seek to transform our operations and culture firmly around leading customer service, experience and products.”
Mr McEwan said: “We must meet and exceed the expectations of our many stakeholders.
“The community also expects a higher level of accountability and transparency from the banking industry. Australians deserve NAB to be a world class service provider.”