Starting from July, the real estate market will take place earth-shaking changes, those who hold money wait-and-see investors, must pay attention!
A number of Australian banks have raised mortgage rates as financing costs are too high.
One of Australia`s largest mutual banks, Wollongong-based IMB Bank, has become the latest financier to raise mortgage floating rates, a move that they blamed on rising funding costs.
The IMB said the standard floating rate for investment and homeownership loans would increase by 8 basis points and the rate increase would take effect this week.
This measure, for the new and old mortgage customers, all of a net!
Queensland Bank (Bank of Queensland) was the first to bear the brunt of the decision to raise interest rates on investment and homeownership loans by as much as 15 basis points before IMB!
In response, IMB said in a statement:
"like most banks, we use customers` deposits to provide a range of financial support to borrowers` loans and to attract and use these deposits by paying interest."
"but over the past few months, the increase in financing costs has also put a lot of pressure on us, so we have to pass on these additional costs," he said.
IMB has A $4.4 billion in lending accounts and A $4.9 billion in deposits.
On Monday night, Queensland opened the way to a full-cycle rise in interest rates, becoming the first regional bank to raise floating interest rates and credit lines for homeowners and investors.
To cover the rising cost of financing, the second-tier lender has raised interest rates for homeowners by 9 basis points and floating rates by 9 basis points, which are now as high as 4.56 percent.
Homeowners` interest rates will rise by 15 basis points to 5.02 percent, while investors` interest-servicing loans and interest-only loans will both increase by 15 basis points.
Finally, homeowners and property investors` credit lines will rise by 10 basis points.
All of these new rules came into effect on July 2!
Anthony Rose, acting group chief executive of Queensland`s retail banking business, said the move was mainly due to excessive funding costs.
The meaning between the lines is, our bank is also very helpless ah!
"since February, financing costs have risen sharply, mainly due to the 30-and 90-day rise in BBSW (bank paper swap rates) rates and increased competition for time deposits.
"while banks have absorbed some of the additional costs during this period of time, changes in interest rates will help offset the negative impact of rising capital costs."
Any decision to raise interest rates is difficult, Anthony Rose said, and banks have taken a series of steps to strike a balance between borrowers and savers.
At a board meeting on June 5, Australian Reserve Bank (RBA) kept cash interest rates at 1.5 percent, and the directors said the banks` financing costs were slightly higher and appeared to have little impact on mortgage rates.
They believe banks have been competing for high-quality borrowers, causing the average mortgage rate on outstanding loans to fall by about 15 basis points since August 2017.
Conditions in Sydney and Melbourne have continued to moderate, while conditions in his state`s capital city have remained sluggish, and housing credit growth has slowed over the past year, he said.
Money market prices indicate that cash rates are expected to remain unchanged until a 25 basis point increase in the second half of next year.
Other banks responded. Amp Bank raised interest rates on some investors` loans by 40 basis points, while cutting some fixed rates. ME Bank and Suncorp, Australia`s fifth-largest bank, also raised interest rates.
As for the long-term development, what will happen?
At present, investors have yet to wait for a period of time.
