Australia’s big four banks continue to manage multiple challenges including falling house prices, a regulatory backlash sparked by the royal commission, and higher funding costs.
A further challenge is that international funding costs have been creeping up in recent months – a trend likely to cost banks hundreds of millions if they are not passed on to customers.
Issues raised by the royal commission will make it much harder for major banks to raise their interest rates independently of the Reserve Bank. At some stage, however, an economic decision will need to be made.
How are you placed should interest rates rise sooner rather than later?
The Australian property market is a restless one that can see things heat up and cool down in a matter of months, and with everyone trying to get a slice of a property market worth $7.5 trillion it pays to keep up to date.
Whether you are a first-time property owner, or you own multiple properties, obtaining sound professional advice, before investing in property, is essential. Wealth creation through property can prove to be a prudent strategy.
Research shows investors who have a close relationship with a qualified professional will be richer than those who do not have that close relationship.
Since the GFC, bank capital levels and the number of bank regulations have skyrocketed. The unquestionable thrust of Basel III has been for banks to massively increase capital, reduce leverage, limit risk-taking behaviour, and adhere to a far more stringent set of banking regulations.
The fallout from the Royal Commission will undoubtedly see a further reduction in risk-taking appetite and yet more regulatory burden placed on the banks.
In Australia, the non-bank lending market is growing rapidly but is still relatively small, with many players fighting for scale. We expect this trend to continue.
It is important to research the market and understand your options when considering how to fund your next property purchase.
It is important to understand how much you’re able to borrow prior to committing to any financial transaction. With the recent evolution of the lending landscape don’t make the mistake of assuming you will automatically obtain finance.
Seek professional advice regarding loan structure and strategy at the outset.
Changes by the Banks in relation to loan term, repayment type, satisfactory security and affordability has redefined the loan approval process.
Whether you are seeking to enter the Residential or Commercial Property Market it is critical that you seek professional advice today.
Strategic Investor Group will crunch the numbers and provide you with the best options, based on your overall financial position, and individual personal circumstances.
We are already seeing the impact with individuals and company’s ability to access Bank loans becoming extremely difficult.
With the loan approval process requiring applicants to evidence the ability to service their borrowings at twice the actual interest rate, have the recent regulatory changes created a barrier for genuine borrowers.
Prudent lending principles are required, however, have the regulators gone too far, and will these actions have a flow-on effect for future economic growth?
Understand your individual position by speaking to a professional today.
http://stratgroup.com.au/wp-content/uploads/2017/03/SIG-WEB-LOGO.png00adminhttp://stratgroup.com.au/wp-content/uploads/2017/03/SIG-WEB-LOGO.pngadmin2018-05-16 02:44:292018-05-16 03:07:02What will be the economic effect of the Banking Royal Commission?