1 00:00:00,280 --> 00:00:03,200 Speaker 1: Record numbers of us are refinancing our mortgages with a 2 00:00:03,240 --> 00:00:05,400 Speaker 1: new bank at the moment. Numbers from the Reserve Bank 3 00:00:05,480 --> 00:00:08,399 Speaker 1: show more than three and a half thousand mortgage holders 4 00:00:08,440 --> 00:00:10,959 Speaker 1: switched in the last year. This makes at the highest 5 00:00:11,039 --> 00:00:15,080 Speaker 1: rate of refinancing since twenty seventeen. Calvin Davidson's Totality Chief 6 00:00:15,080 --> 00:00:18,360 Speaker 1: Property Economists with me this morning. Calvin, good morning, Good morning. 7 00:00:18,960 --> 00:00:21,279 Speaker 1: So how many are coming off fixed? You I have 8 00:00:21,280 --> 00:00:23,960 Speaker 1: all the mortgage holders, how many are coming off our 9 00:00:24,000 --> 00:00:25,400 Speaker 1: fixed and the next we are. 10 00:00:26,200 --> 00:00:28,319 Speaker 2: Yeah, it's quite a lot. So well, if you start 11 00:00:28,320 --> 00:00:30,480 Speaker 2: with about ten and twelve percent of the loans, they're 12 00:00:30,520 --> 00:00:32,800 Speaker 2: on flugging rates right now, and then if you look 13 00:00:32,840 --> 00:00:35,400 Speaker 2: at perhaps the next six months, there's about another forty 14 00:00:35,440 --> 00:00:37,760 Speaker 2: percent of debt that's on a fix rate now but 15 00:00:37,880 --> 00:00:40,879 Speaker 2: due to rollover in six months. So by the end 16 00:00:40,920 --> 00:00:43,240 Speaker 2: of the year we're going to have fifty five percent 17 00:00:43,320 --> 00:00:46,840 Speaker 2: of loans seeing a rate change. And so yeah, there's 18 00:00:46,880 --> 00:00:48,800 Speaker 2: there's quite a bit of flexibility there at the moment, 19 00:00:48,800 --> 00:00:51,600 Speaker 2: and that's the thing people have, the flexibility cash backs 20 00:00:51,600 --> 00:00:54,760 Speaker 2: are being offered. So thanks, switching is looking prettyppealing to 21 00:00:54,760 --> 00:00:55,400 Speaker 2: people at the lone. 22 00:00:55,520 --> 00:00:57,720 Speaker 1: Yeah, what are the deals that you've heard about people 23 00:00:57,760 --> 00:00:58,200 Speaker 1: are getting. 24 00:00:59,480 --> 00:01:02,440 Speaker 2: Well, sometimes those are heading a little bit behind the scenes, 25 00:01:02,480 --> 00:01:05,720 Speaker 2: but few anecdotes a bit of personal experience, So it's 26 00:01:05,840 --> 00:01:07,880 Speaker 2: I think it's very easily common to get sort of 27 00:01:07,920 --> 00:01:10,480 Speaker 2: point seven point eight percent of the loan dull as 28 00:01:10,520 --> 00:01:13,200 Speaker 2: a cash back up to certain caps. So it can 29 00:01:13,240 --> 00:01:15,800 Speaker 2: be a decent chunk of money if you're looking at 30 00:01:15,800 --> 00:01:17,920 Speaker 2: a fairly large mortgage. So it con cerdainly makes sense 31 00:01:17,920 --> 00:01:21,360 Speaker 2: for people who are potentially under cash flow stress for sure. 32 00:01:21,280 --> 00:01:23,760 Speaker 1: With fifty to fifty five percent, as you said, coming 33 00:01:23,800 --> 00:01:27,840 Speaker 1: off by year end. At what point do these lower 34 00:01:27,920 --> 00:01:30,360 Speaker 1: rates translate into higher prices for property? 35 00:01:31,920 --> 00:01:34,280 Speaker 2: Well, yeah, so the market in general at the moment 36 00:01:34,400 --> 00:01:37,959 Speaker 2: is we're calling it conflicting forces. So yes, ordinarily it'd 37 00:01:37,959 --> 00:01:40,759 Speaker 2: expect that impact of lower Morgie rates to be pushing 38 00:01:40,760 --> 00:01:43,039 Speaker 2: out house prices, and there's just a leg at the moment. 39 00:01:43,120 --> 00:01:45,120 Speaker 2: I think that's reflecting the other side of the ledge 40 00:01:45,160 --> 00:01:47,760 Speaker 2: of those conflicting forces, things like the weak economy and 41 00:01:47,800 --> 00:01:51,680 Speaker 2: labor market. Even if people have kept their job, perhaps 42 00:01:52,120 --> 00:01:54,080 Speaker 2: still not feeling as secure as they were, and so 43 00:01:54,120 --> 00:01:57,160 Speaker 2: I think that's really holding things back. I think the 44 00:01:57,160 --> 00:01:59,040 Speaker 2: second half of you could still be predy sejured for 45 00:01:59,080 --> 00:02:02,080 Speaker 2: the market, but at those impacts of lower interest rates 46 00:02:02,200 --> 00:02:04,480 Speaker 2: start to come through early next year, but even then 47 00:02:04,520 --> 00:02:07,360 Speaker 2: it's unlikely to be a boom because there's still a 48 00:02:07,680 --> 00:02:10,960 Speaker 2: supply out there and affordability isn't great. Better than it was, 49 00:02:11,000 --> 00:02:13,440 Speaker 2: but still not great. So I think we're looking at 50 00:02:13,440 --> 00:02:14,800 Speaker 2: a flatish market for a while. 51 00:02:14,919 --> 00:02:18,919 Speaker 1: Calvin, what about the loan to value ratio limits? Are they? 52 00:02:19,040 --> 00:02:21,240 Speaker 1: Are we getting close to? Are people getting close to 53 00:02:21,240 --> 00:02:23,320 Speaker 1: that yet? What's the situation with that and is that 54 00:02:23,639 --> 00:02:26,440 Speaker 1: potentially going to act as a ceiling on any future booms. 55 00:02:27,600 --> 00:02:29,959 Speaker 2: I think the old is yeah, that's sort of doing 56 00:02:30,040 --> 00:02:32,120 Speaker 2: this thing they're taking along. It's very tough as an 57 00:02:32,160 --> 00:02:34,160 Speaker 2: investor to get a loan if you don't have a 58 00:02:34,200 --> 00:02:38,520 Speaker 2: thirty percent deposit. Low deposit finance is more available for 59 00:02:38,600 --> 00:02:42,040 Speaker 2: owner occupiers, but even then the limits aren't really being tested. 60 00:02:42,080 --> 00:02:44,919 Speaker 2: I think the credit restraint that people are probably watching 61 00:02:44,919 --> 00:02:48,000 Speaker 2: more closely is the debt to income ratios. Now, they're 62 00:02:48,040 --> 00:02:51,360 Speaker 2: not necessarily doing too much either just yet, because test 63 00:02:51,440 --> 00:02:54,640 Speaker 2: rates inside the bank's still high enough that that's what's 64 00:02:54,720 --> 00:02:58,840 Speaker 2: kepting loan sizes. Those rates coming down is wide and 65 00:02:58,919 --> 00:03:01,360 Speaker 2: mortar rates come down, and that's the point at which 66 00:03:01,480 --> 00:03:04,400 Speaker 2: those formal get to income ratio rules will start to 67 00:03:04,480 --> 00:03:07,040 Speaker 2: kick in. So I think that's the thing that probably 68 00:03:07,080 --> 00:03:09,640 Speaker 2: limits the market over the medium term. And yeah, certainly 69 00:03:09,639 --> 00:03:11,960 Speaker 2: another factor to Adam's that mix of I guess, a 70 00:03:12,040 --> 00:03:12,840 Speaker 2: cautious outlook. 71 00:03:13,880 --> 00:03:18,080 Speaker 1: Calvin appreciate that interesting stuff, Calvin Davidson, Totality, Chief Property Economists. 72 00:03:18,600 --> 00:03:21,560 Speaker 1: For more from earlier edition with Ryan Bridge, listen live 73 00:03:21,720 --> 00:03:24,720 Speaker 1: to news Talks it'd be from five am weekdays, or 74 00:03:24,760 --> 00:03:26,679 Speaker 1: follow the podcast on iHeartRadio.