Good Morning and Happy Monday!
This week in finance news there was quite a bit that happened. With COVID back in the news with VIC now having masks made mandatory and clusters all over VIC and NSW. NSW and QLD also look like they may close their borders again.
The mini budget saw the Govt extend the SME guarantee scheme, Job Keeper and Job Seeker. The SME scheme maximum loan size quadrupling from $250 to a massive $1million dollars. The loan term also increasing from 3 to 5 years. Borrowing is also able to be used for more than just working capital and now includes secured lending not including commercial and residential property.
Job Keeper and Job Seeker changes will see my accounting partners busier with the changes there, with payments being trimmed and fewer people being eligible.
A report by core logic released this week past, spoke about the downturn in housing prices with a return to pre-covid values not expected till the middle of this decade. I know we haven’t seen so much of any downturn in Canberra, with stock levels low and demand still high with many homes hotly contested by buyers. We can only hope that our housing market stays strong in the capital.
When you combine the outlook in this report from core logic and the current credit crunch with reduced debt to income ratio’s being tightened by lenders we may very well be on the cusp of another contraction.
It’s not all doom and gloom out there, while it can be tough and long-winded to get loans approved there are still lenders out there like Macquarie, ING, Bank Australia and others who can turn things around quite quickly. Current market conditions mean that discussions need to be more detailed and client expectations managed more closely than ever.
Rates haven’t changed all that much, another lender moved below 2% on their fixed this week with Loans.com.au moving to a 1yr discounted variable. I am not a fan of this kind of terminology as it’s essentially a one year fixed rate. Still its very cheap money and we may yet see some of the larger lenders move beyond their 2.19% and 2.29% fixed rates.
I hope this week treats you all well. This week I will be on the road quite a bit with clients, however I am always here to help.
JC
Scenarios and interest rates quoted above are suggestions and constitute general advice only.
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