Trending News 27 May 2019

Big banks announce home loan rule change for self-employed borrowers

Westpac and its subsidiaries, Bank of Melbourne, BankSA and St George Bank have announced major changes to lending rules for self-employed applicants. The Westpac group of banks will now require two years of tax information and business financials from applicants. Other changes will impose stricter income measures and validation of valuations. Applicants will also be required to provide more information and the banks will impose higher expense values for households when assessing loan affordability. Older applicants will face stricter requirements to explain their loan exit strategy.

Confidence returning to the property market

Confidence seems to be returning to Australia’s property markets with some economists predicting a big turnaround in prices in 2019.

Josh Williamson from Citi Research predicted that house prices will jump up three per cent by the end of 2020 because the Reserve Bank of Australia (RBA) is expected to cut interest rates and regulators are proposing to relax mortgage buffers, making loans easier to come by for borrowers. The federal government’s proposed First Home Buyers deposit scheme, due to begin on 1 January 2020 is also expected to deliver a boost to demand and therefore housing prices. Dwelling prices in Australia have been falling since September 2017. The average falls have totalled almost eight per cent. ANZ economists expect a further 5 per cent fall in 2019 before stabilising in 2020.