Macquarie Bank First To Pass On New Rates
Kanebridge News
Share Button

Macquarie Bank First To Pass On New Rates

With the big four banks likely to follow, now could be an opportunity for refinancing.

By Kanebridge News
Wed, Aug 3, 2022 10:19amGrey Clock < 1 min

With the Reserve Bank announcing a fourth rate rise in four months, and the third consecutive 0.5% rise, many borrowers are readying for repayment pain.

The official interest rate is now at its highest level in six years — 1.85% — up from 0.1% at the start of May.

Following yesterday’s announcement, Macquarie Bank was the first to move on interest rates, handing on the full half a percentage point rise to its standard variable home loan customers.

Further, Macquarie also continued to increase rates by the full amount for savers too in transaction accounts with balances up to $250,000.

The big four banks are yet to announce any changes however are expected to pass on the new rates to borrowers, adding $1000 a month to repayments on a $1 million mortgage from May according to Canstar.

Fixed rates too are rising noticeably.

According to new Australian Bureau of Statistics (ABS) data, the proportion of new home loans with fixed rates is down to 9% from a July 2021 peak of 46%.

Macquarie is seemingly trying to combat the low uptake of fixed loans by decreasing its fixed-home-loan interest rates by up to 0.75 per cent for new customers and existing variable-rate customers who want to fix their interest rate, from 5 August.

The shifting markets could indicate an opportunity for refinancing, as discounts are being offered for lower-risk borrowers.

Research from financial comparison website Canstar indicates on in two lenders are offering loans with a lower rate to borrowers with a 40% deposit or the equivalent equity in their property.

On Canstar’s platform, 49% of lenders are offering an interest rate that on average sits 0.21% lower than the rate being paid by borrowers with a deposit half that size.



MOST POPULAR

Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Related Stories
Property
Hong Kong Takes Drastic Action to Avert Property Slump
By ELAINE YU 01/03/2024
Property
The Australian capitals experiencing world-class price growth in luxury real estate
By Bronwyn Allen 29/02/2024
Property
Futuristic Sydney-Area Home of Late Australian Businessman Lists for A$9 million
By Kirsten Craze 28/02/2024
Hong Kong Takes Drastic Action to Avert Property Slump

The city’s real-estate market has been hurt by high interest rates and mainland China’s economic slowdown

By ELAINE YU
Fri, Mar 1, 2024 3 min

Hong Kong has taken a bold step to ease a real-estate slump, scrapping a series of property taxes in an effort to turn around a market that is often seen as a proxy for the city’s beleaguered economy.

The government has removed longstanding property taxes that were imposed on nonpermanent residents, those buying a second home, or people reselling a property within two years after buying, Financial Secretary Paul Chan said in his annual budget speech on Wednesday.

The move is an attempt to revive a property market that is still one of the most expensive in the world, but that has been badly shaken by social unrest, the fallout of the government’s strict approach to containing Covid-19 and the slowdown of China’s economy . Hong Kong’s high interest rates, which track U.S. rates due to its currency peg,  have increased the pressure .

The decision to ease the tax burden could encourage more buying from people in mainland China, who have been a driving force in Hong Kong’s property market for years. Chinese tycoons, squeezed by problems at home, have  in some cases become forced sellers  of Hong Kong real estate—dealing major damage to the luxury segment.

Hong Kong’s super luxury homes  have lost more than a quarter of their value  since the middle of 2022.

The additional taxes were introduced in a series of announcements starting in 2010, when the government was focused on cooling down soaring home prices that had made Hong Kong one of the world’s least affordable property markets. They are all in the form of stamp duty, a tax imposed on property sales.

“The relevant measures are no longer necessary amidst the current economic and market conditions,” Chan said.

The tax cuts will lead to more buying and support prices in the coming months, said Eddie Kwok, senior director of valuation and advisory services at CBRE Hong Kong, a property consultant. But in the longer term, the market will remain sensitive to the level of interest rates and developers may still need to lower their prices to attract demand thanks to a stockpile of new homes, he said.

Hong Kong’s authorities had already relaxed rules last year to help revive the market, allowing home buyers to pay less upfront when buying certain properties, and cutting by half the taxes for those buying a second property and for home purchases by foreigners. By the end of 2023, the price index for private homes reached a seven-year low, according to Hong Kong’s Rating and Valuation Department.

The city’s monetary authority relaxed mortgage rules further on Wednesday, allowing potential buyers to borrow more for homes valued at around $4 million.

The shares of Hong Kong’s property developers jumped after the announcement, defying a selloff in the wider market. New World Development , Sun Hung Kai Properties and Henderson Land Development were higher in afternoon trading, clawing back some of their losses from a slide in their stock prices this year.

The city’s budget deficit will widen to about $13 billion in the coming fiscal year, which starts on April 1. That is larger than expected, Chan said. Revenues from land sales and leases, an important source of government income, will fall to about $2.5 billion, about $8.4 billion lower than the original estimate and far lower than the previous year, according to Chan.

The sweeping property measures are part of broader plans by Hong Kong’s government to prop up the city amid competition from Singapore and elsewhere. Stringent pandemic controls and anxieties about Beijing’s political crackdown led to  an exodus of local residents and foreigners  from the Asian financial centre.

But tens of thousands of Chinese nationals have arrived in the past year, the result of Hong Kong  rolling out new visa rules aimed at luring talent in 2022.

MOST POPULAR

Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Related Stories
Money
An early Christmas present for mortgage holders as rates hold steady
By KANEBRIDGE NEWS 05/12/2023
Property
The Real-Estate Downturn Comes for America’s Premier Office Towers
By PETER GRANT 31/01/2024
Money
Australian wages grow at fastest pace since 2009
By Bronwyn Allen 22/02/2024
0
    Your Cart
    Your cart is emptyReturn to Shop