{"id":14881,"date":"2017-12-04T01:00:05","date_gmt":"2017-12-03T14:00:05","guid":{"rendered":"http:\/\/www.realestatetalk.com.au\/?p=14881"},"modified":"2017-12-04T01:00:05","modified_gmt":"2017-12-03T14:00:05","slug":"what-is-causing-the-slowdown-andrew-mirams","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/what-is-causing-the-slowdown-andrew-mirams\/","title":{"rendered":"What is causing the slowdown? \u2013 Andrew Mirams"},"content":{"rendered":"

The housing markets around the country are moderating so have the APRA interventions been the cause or are there more compelling underlying reasons.\u00a0 Andrew Mirams<\/strong> gives us his view.
\nTranscript :\u00a0<\/strong>
\nKevin:<\/strong>\u00a0 We continue to see the housing market moderate around Australia, so I wonder, given that we\u2019re talking here about investors whether APRA\u2019s intervention has actually had the desired effect. Andrew Mirams from Intuitive Finance joins me.
\nGood day, Andrew. How are you doing?
\nAndrew:<\/strong>\u00a0 I\u2019m doing really well, Kevin, thank you, and you?
\nKevin:<\/strong>\u00a0 Good, mate. So, this screwing down by APRA, is that what\u2019s happening here? Is that what we\u2019re seeing?
\nAndrew:<\/strong>\u00a0 Oh, that\u2019s an affectionate term, Kevin, \u201cscrewing down.\u201d
\nKevin:<\/strong>\u00a0 I look at it as like tightening the screw down on this a bit.
\nAndrew:<\/strong>\u00a0 Yes, very good. They\u2019ve largely achieved what they\u2019ve wanted to achieve, and to the point that even Wayne Byres, the chairman of APRA, came out a couple of weeks ago saying that the whole ideology behind it was a temporary measure, just to make sure that investors weren\u2019t getting out of check, as they probably were in Melbourne and Sydney predominantly, and they just needed to regulate markets to make sure we have a balanced housing market and to make sure that first-home buyers did have opportunities to buy in the market where the investors, in Sydney in particular, were really running ahead and making it hard for people to just get into the market.
\nI think what they\u2019ve been able to do is limit loan-to-value ratios \u2013 what we call LVRs \u2013 to investors, not putting much in. They\u2019ve been able to reduce some interest-only lending and the potential that when people come out of their interest-only loans that they won\u2019t be exposed and unaffordable in terms of their new rates and their new rate payments that they\u2019re going to be up for.
\nSo, yes, a lot of their measures have absolutely had the desired effect. We\u2019re not seeing the markets just moderate, which is, for all property investors, a good thing. None of us want boom-bust cycles, Kevin.
\nKevin:<\/strong>\u00a0 Are we likely to see more toughening measures from APRA?
\nAndrew:<\/strong>\u00a0 I think they\u2019re quite comfortable, now that we\u2019re seeing actual signs in the marketplace of the markets moderating. I believe that they\u2019ll just sit and watch. I still think \u2013 and we\u2019ve spoken about this before \u2013 that a little bit of work about the people\u2019s living expenses and just doing really due diligence and analysis around what people are actually spending and what\u2019s going in and out of bank accounts, I still think there might be a little bit of work still just to play there.
\nBut otherwise, the banks have really responded really well to the regulatory requirements. They\u2019ve put all their measures in place. They\u2019re within all of their caps, to the point now that we\u2019re starting to see a little bit of interest rate action and rates actually starting to decrease so that they can attract new business.
\nKevin:<\/strong>\u00a0 Really? So, you\u2019re getting that feedback from the banks, eh? Is that what they\u2019re doing?
\nAndrew:<\/strong>\u00a0 Yes. Now that their 10% year-on-year investor caps are all in order and the interest-only caps are in order, we\u2019re starting now to see that the banks are\u2026 They\u2019ve always been open for business; they\u2019ve just had to follow the regulator\u2019s rules. And now that they\u2019ve done that, they have their houses in order, so to speak, yes, absolutely, they\u2019re open for business \u2013 to the point that I even suspect that we\u2019re going to see a little interest-rate war early in 2018, with the banks really actively competing for new business and looking to just manage their volumes, but certainly where they have room to move it, there will be some attractive offers out there.
\nKevin:<\/strong>\u00a0 You and I discussed this in a recent video interview, and that is the health of the Australian banks, how healthy they are, given the fact that they are so heavily regulated. How does the banking system in Australia compare to some of the overseas markets, Andrew?
\nAndrew:<\/strong>\u00a0 Yes, really well. I think our Big Four consistently rank in the top ten banks in the world, based on their strengths, their profitability. Everyone has a go at our banks making money, but we\u2019d much rather them making money than being closed, because at the end of the day, if we don\u2019t have a sound banking system, none of us can borrow for our homes, for our investment properties, to try to leverage and enjoy the lives that we have. If you can invest and get ahead and enjoy that lifestyle, well, we all need leverage and the lenders to assist us with that.
\nSo, we want a very sound banking system, and our banks stand up as well as any of those around the world. The regulators have been asking them to put more capital aside, so that they have nice big buffers so that should we have a little jolt in any of the markets, or we\u2019re seeing sales of people who are over-committed, they\u2019re pretty well positioned to be able to fund that.
\nKevin:<\/strong>\u00a0 Yes, you\u2019re right; we are very critical of the banks and their profit levels. We can always hear the community moan when they do talk about their profit levels, but you have to take your hat off to them; they balance it well. And I think if you dig a little bit deeper, you\u2019ll see they also do a lot of really good community work. So, it\u2019s not just the banks screaming out for money.
\nAndrew:<\/strong>\u00a0 Absolutely. And the Big Four, Kevin, just remember they all employ about 25,000 to 30,000 Australians, so they\u2019re quite large employers and really good contributors to our economy.
\nKevin:<\/strong>\u00a0 Well, apart from that, too, they also have shareholders, and they have a responsibility to their shareholders to return those profits.
\nAndrew:<\/strong>\u00a0 And their actual return on investments\u2026 Everyone focuses on the billions of dollars, but the actual return on the investment isn\u2019t as massive as what\u2026 The average business owner is making the same return. They might find they might not be able to get money from the bank.
\nKevin:<\/strong>\u00a0 It\u2019s a good opportunity, too \u2013 I know we\u2019re talking to investors here \u2013 to maybe go and buy some bank shares. You could do a lot worse, Andrew.
\nAndrew:<\/strong>\u00a0 Yes, you always can.\u00a0[5:47 inaudible]<\/strong>\u00a0paid dividends. They\u2019ve always been quite a sound investment.
\nKevin:<\/strong>\u00a0 It\u2019s always good talking to you, too, mate.
\nAndrew Mirams, of course, is one of our contributors, a regular contributor, and a supporter of the show, too. We like you to support our supporters, and you can do that by contacting Andrew and his team by using any one of the buttons on Real Estate Talk.
\nThanks, Andrew. All the best, and talk to you again soon.
\nAndrew:<\/strong>\u00a0 My pleasure, Kevin, and all the best to you, too.<\/p>\n","protected":false},"excerpt":{"rendered":"

The housing markets around the country are moderating so have the APRA interventions been the cause or are there more compelling underlying reasons.\u00a0 Andrew Mirams gives us his view. Transcript :\u00a0 Kevin:\u00a0 We continue to see the housing market moderate around Australia, so I wonder,…<\/p>\n","protected":false},"author":176692471,"featured_media":14883,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[34,10,11,13,36,22,25],"tags":[103],"class_list":["post-14881","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","category-sponsored-channels","tag-podcasts"],"yoast_head":"\nWhat is causing the slowdown? \u2013 Andrew Mirams - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/what-is-causing-the-slowdown-andrew-mirams\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is causing the slowdown? \u2013 Andrew Mirams - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"The housing markets around the country are moderating so have the APRA interventions been the cause or are there more compelling underlying reasons.\u00a0 Andrew Mirams gives us his view. 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