Australia is on the brink of a new mortgage war, says banking analyst | The Business | ABC NEWS
The National Australia Bank is the last of the big four to cough up its earnings. It’s reported a four per cent lift in third-quarter cash profit to $1.83 billion.
While profits are holding up, all of the big four – NAB, ANZ, Westpac and Commonwealth Bank – are reporting a sharp pull back in home loan applications.
Banking analyst with MST Financial, Brian Johnson, says this could mean the start of a new mortgage war.
He says this is due to strong competition coming from Macquarie, for example, to the big four banks, especially CBA. In the last week of June, the Commonwealth started to cut its front book pricing (interest rates or product prices offered to new customers). Then the other banks followed suit.
NAB’s mortgage lending rates are down 15 per cent compared to the second quarter, in line with the other banks.
Mr Johnson says it’s a combination of the adverse impact of higher interest rates coming through, plus, what he called the most significant thing, much less interest from the investor cohort because of the changes to capital gains tax.
He anticipates house prices will probably fall further than they have since the May budget.
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