The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Friday, December 2, 2011

Told you so #24: Rate cut triggers boom-time mortgage conditions; biggest approvals since '09

If Glenn Stevens cedes to the financial markets and supplies them with the insurance--or put option--they are so desperately baying for, house prices will respond much more quickly than most people think. From Australia's largest mortgage broker today:

Record 2 in 5 new mortgages for investors

Mortgage borrowers defied the global gloom in November with the RBA’s quarter of a percent rate cut seeing the number of mortgages processed increase by 18.4% over October figures, according to AFG, Australia’s largest mortgage broker. AFG processed over $2.9 billion of mortgages in November, its highest such figure since March 2009. AFG has 10% of the national mortgage market (Source: ABS data and AFG figures). The company’s data is usually indicative of the data published by the ABS six weeks later. Growth was particularly strong in Victoria, where mortgages processed leaped 26.7% and Queensland (20.8%). Elsewhere, growth was recorded in NSW (16.4%), WA (15.8%) and SA (8.7%).

Mark Hewitt, General Manager of Sales and Operations says: ‘While November is seasonally a strong month for mortgages, the rate cut has certainly stimulated demand. We’re experiencing the paradox that weaker global economic conditions and lower rates, is good news for Australian property buyers - at least for now. It’s significant that investors and first home buyers are leading the action. Many had been fearful that we were locked into a scenario of constant rate hikes. The November rate cut proved to be a real a turning point and the outlook is very different now.’ Property investors accounted for almost 2 out of every 5 mortgages sold in November (38.4%) – an all time record for the AFG Mortgage Index, which goes back six years. Investors were especially active in New South Wales (44.6%) and Victoria (39.8%), but also strong in Queensland (37.7%), Western Australia (32.1%) and South Australia (30.0%).