February 26, 2013
Do you know its been 6 years since economic figures pointed so convincingly toward some sort of greenshoots recovery in the general economy. The time may be right to finally rejoice and put the Beast known as GFC to bed for good..
Dwelling prices have bottomed and are slowly recovering - up 1.2% nationally in Jan13 and 1.8% nationally YOY;
Cash rate of 3% is contributing to record low home loan rates - < 5%; Consumer Sentiment up 7.7% this month - the best its been for 26 months;
Unemployment remains comfortably constrained - presently 5.4%; Housing undersupply gap is widening - > 200,000 homes;Net population growth - 1.6%pa for the year to 30/06/12;
China's economic growth forecast for FY13 has given our miners much to celebrate - up from 7.8% in Q412 to over 8.0% in CY13;
With cash deposit rates low and expected to fall further throughout 2013, investors are tipped to return to residential property in search of better long term yields - investors as a % of the ABS Housing Finance Commitments increased from 31.4% to 33.2% in the 6 months to 31/12/12;Pricing for RMBS (Registered Mortgage Backed Securities) has fallen significantly in recent months - this is a key 'cost of funds' component for our lenders and with it falling it delivers them a much improved ROE on their home loans and as such incentivises them to sell more. A report issued yesterday by UBS titled Have Mortgages Ever Been More estimates the Banks are now generating a Net 88bps from originating a new mortgage - the highest profit margin since at least 2004.