Trending News 1 May 2019

ANZ admits to investor loan mistakes

ANZ chief executive Shayne Elliott said his bank had been too cautious in lending to property investors.

“Being more risk averse in the current environment is prudent,’ said Mr Elliott, “however we could have done a better job implementing our new risk settings.”

Mr Elliott said ANZ is “taking steps to improve processes” for homebuyers and investors looking to apply for loans but he remains worried about families doing it tough. ANZ had assisted about 500 or 600 families in financial difficulty with loan repayments in the last six months, a big increase over previous periods.

ANZ reported a profit of $3.56 billion in the first half, up 2 per cent. ANZ’s interim dividend of 80 cents will be fully franked and paid on 1 July 2019.

ANZ reported a profit of $3.56 billion in the first half, up 2 per cent. ANZ’s interim dividend of 80 cents will be fully franked and paid on 1 July 2019. Compare investor home loans here

Buyers bonanza as prices drop again

Australian capital city property prices fell 0.5 per cent on average in April and are now down 7.2 per cent over the last 12 months, according to new data from CoreLogic. Only Canberra bucked the trend and recorded a rise in property prices of 0.4 per cent for the last month.

CoreLogic's head of research Tim Lawless said the big price falls of recent months may be starting to ease.

“Housing market conditions may have moved through the worst of the downturn,” said Mr Lawless, “the rate of decline isn't quite as quick as what we've been seeing over previous months.”

Average home prices in Sydney fell 0.7 per cent in April 2019. Average home prices in Melbourne fell 0.6 per cent in April. Brisbane and Perth home prices fell 0.4 per cent, while Adelaide prices were relatively stable, falling just 0.1 per cent.

The biggest falls in home prices in April were in Hobart (down 0.9 per cent) and Darwin (down 1.2 per cent).

Lenders cut rates as competition gets “fierce”

Teachers Mutual Bank (TMB) and its’ subsidiaries, Firefighters Mutual Bank, UniBank and Health Professionals Bank are the latest lenders to announce big home loan rate cuts, following recent cuts from the Commonwealth Bank, NAB, Westpac, ING, Virgin Money, Bendigo Bank and others.

TMB has cut fixed rates by up to 0.23 percentage points for owner-occupiers and up to 0.34 percentage points for investors. Macquarie Bank, ME, HomeStart Finance and Adelaide Bank have also reduced their fixed rates by up to 0.92 percentage points. 

Analysts are pointing to easing funding pressures for banks.

How to dump your bank account for a better deal

About 40 per cent of Australians still use the bank account they were signed up to at school or as a child by mum and dad. If you are one of these people, you are almost certainly NOT getting the best deal available.

Banks don’t reward loyalty said Doctor Rob Nicholls from UNSW’s Business School,

“People are more likely to get divorced than change banks,” said Dr Nicholls, “It’s a real issue.”

It’s an issue because millions of Aussies are paying monthly fees, unnecessary ATM fees, transaction fees that you don’t need to be paying, or not getting the latest apps or payment options from their main banking account.

Choice’s Xavier O'Halloran told ABC that people think changing banks is too much hassle “but in recent years it has been made easier” because financial institutions must connect all your direct debits for you.

First, choose an account that suits you, look for features and fees that suit your lifestyle, think about how you use your money. Open the new account and fill in the form to transfer direct debits from your old account.

Compare transaction savings accounts from all the major Australian Deposit Taking Institutions here.

RBA likely to cut rates to new record low in May, or June

The Reserve Bank of Australia is expected to cut official interest rates in May or June 2019 after weaker than expected inflation data in March.

Currently the central bank board has the Australian official cash interest rate set at 1.50 per cent, an historically low stimulatory setting that the board has maintained for almost three years. Cutting the rate to 1.25 per cent would represent a new record low setting for official cash interest rates in Australia.

Consumer prices have not risen in Australia in 2019, according to new CPI data released last week by the Australian Bureau of Statistics. The official inflation rate in Australia is 0.0 per cent for the last three months and just 1.3 per cent over the last 12 months, well under the RBA’s target range of 2 – 3 per cent.

Some economists have tipped the RBA board to avoid cutting rates in the middle of a federal election campaign and postpone the announcement of a new record low setting until June – after election day on 18 May 2019.

Compare variable rate home loans here

What are the new credit card rules?

Aussies are being caught out by new credit card rules that limit how much credit you can be approved for by applying a new ‘three-year rule’.

The new credit card three-year rule was announced by the Australian Securities and investment Commission in September 2018 and took effect from the 1 January 2019.

The bank or other credit card issuer must be satisfied that you could readily repay the entire credit card credit limit within three years. And they must take into account all your other cards, debts, bills and expenses.

“More than one in six consumers are struggling with high credit card debt,” reported ASIC. The industry watchdog has responded to that finding by telling banks and credit card companies to “take proactive steps to address persistent debt, low repayments or poorly suited products.”

Estimate your repayments and what you can afford with Infochoice’s credit card repayment calculator here.

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