Home Loans & Mortgages

Construction loans have fallen steeply over the past 9 months, inline with new home sales. Australian Bureau of Statistics [ABS] show that the number of new homes being constructed fell by 5.3 per cent in the fourth quarter, 4 times worse than economists were expecting. Single dwelling new homes were hit hardest. So it was felt as lower construction loans with mortgage brokers and banks everywhere.

It is beginning to look like Australia will dodge the recession bullet. Australians’ confidence in the future have risen its best level in nearly two years, as home buyers and homeowners grew more optimistic about an early economic recovery. A predicted slide in house values hasn’t happened, and in many parts of the economy its business as usual.

The banks have been tightening their credit guidelines on home buyers for over the last year and this is stangling building companies cashflow and construction activity slowed for the 11th month straight.

The Commonwealth Bank Of Australia is the first bank in Australia to denounce the no deposit loan as not meeting their new tightened guidelines. But will that eventually come back as jingle mail to haunt them if other lenders won’t refinance their bad loans?

The global home loan credit squeeze is a “serious crisis” that is not over yet and will have an impact on government budgets, the IMF’s outgoing head Rodrigo Rato said in an interview published overnight. Speaking to the Financial Times from Washington, IMF Managing Director Rato said: “Policymakers should not think that the problems will [...]