Banks’ decision threatens home lending recovery?
Housing finance figures for December 2011 reveal that the November and December official interest rate cuts had a positive impact on home buyer confidence and new home lending, said the Housing Industry Association, the voice of Australia’s residential building industry.
“The 2.1 per cent increase in new home lending in the month of December 2011 suggests the potential of a modest revival in the lending market. Let’s hope, however, that Friday’s decision by two of our big banks to independently lift their variable lending rates does not undo the work of the Reserve Bank,” said HIA Senior Economist, Andrew Harvey. “The improvement in lending for established homes also continued, with the number of loans up by 2.3 per cent in December, again highlighting the impact that the changed interest rate cycle had begun to have on homebuyer confidence,” said Mr Harvey.
The recovery in the aggregate number of loans for first time buyers also continued, with these loans comprising 20.9 per cent of all dwellings financed in December 2011, which compares to 16.9 per cent one year earlier.
“While modest, the improvement in lending following the late-2011 interest rate cuts suggest a growing number of people are preparing to enter the housing market. There is a risk, however, that the recent action of two trading banks could undo the modest improvement in demand,” noted Mr Harvey.
“Effectively the Friday afternoon decision could dash more than four months of work on improving sentiment, and in an economy for which the Reserve Bank has just downgraded its growth forecasts the last thing we need is this additional weight in the saddle-bags already dragging on consumer sentiment,” added Andrew Harvey.
In December 2011 the seasonally adjusted number of loans for new housing (construction and purchase of new) increased by 13.3 per cent in Victoria, 1.1 per cent in Western Australia, 43.7 per cent in the Northern Territory, and 3.9 per cent in the Australian Capital Territory. The number of loans for new housing fell by 3.6 per cent in New South Wales, 4.9 per cent in Queensland, 9.3 per cent in South Australia, and 1.9 per cent in Tasmania.
source - www.hia.com.au
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After months of speculation, ANZ has confirmed it will cut approximately 1,000 domestic jobs.
In a statement from the bank, ANZ chief executive Australia Philip Chronican blamed the job cull on intense pressure on margins associated with higher funding costs, lower consumer and business demand for financial services and increasing global regulation.
“A different and very difficult environment is now emerging for banks globally. Just as we are seeing in other parts of the Australian economy, we are also having to adapt our business to the new conditions and become leaner, more agile and more customer-focused so we ensure the bank remains strong and can grow and invest for the future,” Mr
Chronican said. “At the same time, we know we have to keep working hard to become a better bank, by continuing to improve customer service and innovating faster as technology changes and customers look for banks to provide new banking solutions."
“In this environment, the right thing to do is to be upfront with our staff and with the community about the changes needed in banking and their implications. We are acutely conscious of the impact of these reductions on individual staff members and we will be making every effort to use natural attrition, to redeploy staff, and to utilise our training funds to support those people affected."
"Although we need to make difficult decisions in the short-term to adapt to the new global environment for banks, the economic outlook for Australia remains positive and this helps underpin our continued investment in customer service and in emerging areas of opportunity.”
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