Trending Financial News 22 July
Has Mack Horton started a trade war with China?
China’s state-run media is demanding an apology from Australia after an incident at the World Swimming Championships.
Australian 400m swimmer Mack Horton won silver in the world swimming championships overnight, defeated by a world-class swim from his long-time rival in the pool, Sun Yang from China.
Horton protested his rival’s gold by not taking the podium during the Chinese national anthem and joining with Sun in celebrating their achievements.
Sun Yang faces a possible life ban for smashing a vial of his blood due to be tested for performance enhancing drugs.
“Disrespecting me is okay but disrespecting China was very unfortunate,” said Sun.
“It is not a commentary about China,” said Mack Horton’s father.
In May, former government minister Andrew Robb said Australian – Chinese relations were “toxic.”
Who is National Australia Bank’s new chief?
National Australia Bank has a new chief executive. New Zealander Ross McEwan is former CEO at Royal Bank of Scotland which was investigated over its alleged “constructive defaults” policy for small business borrowers.
The UK Financial Conduct Authority cleared RBS of the charges that it deliberately “distressed” small businesses “to profit from their restructuring or insolvency,” but did find “widespread and systemic” inappropriate treatment of customers.
In September 2018, the UK’s House of Commons Treasury Select Committee accused Mr McEwan of misleading it, whereas McEwan insisted he had misunderstood the MP’s question and the context.
Westpac cuts savings account rates
Westpac has cut the ongoing base rate on its eSaver savings account by 0.15 per cent from 0.30 per cent to 0.15 per cent. The eSaver account proposition is now 2.16 per cent interest for the first 5 months, then an ongoing rate of 0.15 per cent.
Westpac has also adjusted the rates on its Life account. The base rate has been cut by 0.20 per cent from 0.80 per cent pa to 0.60 per cent. Meanwhile the bonus rate has been raised by 0.20 per cent from 0.30 per cent to 1.5 per cent. The bonus rate is payable to account holders who make at least one deposit per month and have a higher balance at the end of the month compared with the beginning of the month.
The Westpac Life account bonus rate of 2.20 per cent is currently the highest savings account rate on offer from a big four bank in Australia.
Bank of Mum and Dad is more popular than ever
Since 2016, the Bank of Mum and Dad has moved into the top ten list of Australia’s top home lenders, according to analysis published in Nine Newspapers.
Parents signing up to be guarantors for children applying for a home loan has been consistently high over recent years, said a Westpac spokesman. What is new is increasing numbers of parents contributing huge amounts of money or finance to children buying their first home.
The Bank of Mum and Dad has provided about $30 billion to first home buyers in Australia over the last five years according to data from the Australian Prudential Regulation Authority and Digital Finance Analytics.
Martin North from Digital Finance Analytics said the Bank of Mum and Dad is currently in ninth place but moving up the rankings quickly.
Auction clearance rates are high, but volumes are low, suggesting a rebound is on the way, but not here yet.
The Melbourne auction clearance rate for Saturday 20 July 2019 was 74 per cent from 360 auctions held, according to Domain. The REIV reports that numbers of auctions were twice as high on the same Saturday on 2018. In Sydney, 267 auctions were held last Saturday with 78 per cent producing a sale.
In Adelaide this week there were 37 auctions of residential properties, producing a clearance rate of 35 per cent. 55 auctions in Brisbane produced a 33 per cent clearance rate.
CoreLogic reports a 70.6 per cent Auction clearance rate nationwide from 901 auctions for Saturday 20 July 2019.
Brokers hit back at criticism from Choice
Consumer group Choice claims the “bar is set low” for training requirements to qualify to become a mortgage broker. Choice claims that broker education actively promotes sales over the customer’s best interests.
Choice has also published claims that commissions can influence the loans that brokers recommend.
A mortgage broker is required to recommend products that “are not unsuitable” to a borrower, rather than a higher “in the customer’s best interest” test, which has been long called for by consumer lobbyists.
MFAA CEO Mike Felton said the Hayne Royal Commission found no evidence of systemic harm to consumers resulting from mortgage brokers.