Westpac CEO Brian Hartzer grilled over interest-only rate hikes

CTOBER 11 2017 - 12:14PM SAVE PRINT LICENSE ARTICLE Clancy Yeates Clancy Yeates CONTACT VIA EMAIL FOLLOW ON GOOGLE PLUS FOLLOW ON TWITTER 111 reading now Show comments FACEBOOK SHARE TWITTER TWEET EMAIL MORE Westpac chief executive Brian Hartzer has been grilled in Canberra over the bank's move to hike interest-only mortgages, with parliamentary banking inquiry chair David Coleman asking if the lender was using new regulations as an excuse to increase profits. Westpac, like rivals, in June increased rates on interest-only loans, and justified the move by pointing to the Australian Prudential Regulation Authority's cap on new interest-only lending at 30 per cent of new flows. Replay Unmute Current Time 1:44 / Duration Time 1:44 Loaded: 0%Progress: 0% Fullscreen Replay Video MORE NATIONAL NEWS VIDEOSPrevious slide Next slide null Video duration 02:05 Young Australians' home loan hangover Video duration 00:37 Woman throws shark back null Video duration 00:59 Abbott shut down over climate comments null Video duration 02:18 The story of the Bitter Bench null Video duration 00:57 The harmful impact of food marketing null Video duration 02:27 Government says cyber crime is 'booming' null Commission warns GST dividing system ... MORE VIDEOS Commission warns GST dividing system broken A new report threatens to reignite the political brawl over the GST by calling for urgent changes to the way revenue is divided between the states and territories. Vision courtesy Seven News. Mr Coleman repeatedly queried why the 0.34 percentage point rate hike applied to existing customers, given that APRA's restriction only applied to new loans. He noted analysis from Morgan Stanley that suggested Westpac and other lenders would make much higher returns from interest-only loans as a result of the hike. RELATED ARTICLES Westpac, ANZ and CBA move on transaction fees Be alert, not alarmed, about Australia's high household debt While banks have explained the rate rises by pointing to APRA's regulation, Mr Coleman put it to Mr Hartzer that "what the underlying numbers suggest is that compliance is being used as a profit centre." In response, Mr Hartzer insisted the bank's main objective in hiking interest-only loan rates was to give customers a strong incentive to start paying back principal at a time when borrowing costs are still low. Using pricing models was also better than denying credit to customers who wanted interest-only mortgages, he said. Advertisement When Westpac hiked interest-only rates, it also cut rates on principal and interest loans to give people an incentive to switch to paying down their debt. BUSINESS AM NEWSLETTER Get the latest news and updates emailed straight to your inbox. Enter your email address SIGN UP By submitting your email you are agreeing to Fairfax Media's terms and conditions and privacy policy . "We have to reach this 30 per cent cap as we understand it and we want to reshape our balance sheet so that customers are oriented towards paying down principal because rates are low," Mr Hartzer said. SHARE SHARE ON FACEBOOK SHARE SHARE ON TWITTER TWEET LINK http://www.theage.com.au/business/banking-and-finance/westpac-ceo-brian-hartzer-grilled-over-interestonly-rate-hikes-20171010-gyye02.html Brian Hartzer chief Westpac appeared before the House Economics Committee at Parliament House in Canberra on Wednesday. Brian Hartzer chief Westpac appeared before the House Economics Committee at Parliament House in Canberra on Wednesday. Photo: Andrew Meares The number of customers switching to principal and interest loans had jumped 70 per cent in the latest quarter, he said, which dampens the boost to profitability from the interest-only rate hike. It comes as the competition watchdog is carrying out a review of banks' mortgage pricing - and Mr Hartzer indicated the bank had already handed over large numbers of documents to the inquiry. Mr Hartzer said Westpac had updated its internal financial forecasts as a result of the rate hikes, but said boosting profits was not its objective. "Of course we update our forecasts financially as a result of these changes, not the other way around," Mr Hartzer said. Switch to a principal and interest loan, it's cheaper. Westpac CEO Brian Hartzer He said his advice to customers who were upset at having their interest-only loan rate increased was to "switch to a principal and interest loan, it's cheaper." Westpac is the country's largest lender to customers with interest-only loans, which made up about 50 per cent of its mortgages at the latest results. Mr Hartzer has also faced questions from Labor MP Matt Thistlethwaite over the money laundering allegations at CBA, after it was reported some of the syndicates that allegedly washed money from CBA also used Westpac and ANZ Bank to wash funds. Mr Hartzer said he was not aware of lawyers seeking details from Westpac through discovery. The Australian Securities and Investments Commission on Wednesday also said a review of interest-only lending by banks had found the major banks had curbed interetst-only lending in the past year, and it would now conduct file reviews. Banks must have a "reasonable" basis for suggesting interest-only loans, ASIC said. "The spotlight has been firmly on interest-only lending for some time, and there are no excuses for lenders and brokers not meeting their legal obligations," ASIC deputy chairman Peter Kell said.

Byron Shire Council rejects Westpac on Adani mine

Adani indefinitely postpones final investment decision on Carmichael coal mine Updated about 2 hours ago Photo: The Adani board was to meet in India next week for final approval but has postponed the meeting. (AAP) Related Story: Adani $320m 'royalties holiday' proposal sparks Labor faction fight Related Story: Adani facing growing pressure on fears investors may have been misled Related Story: Palaszczuk offers $320 million 'royalties holiday' to Adani Related Story: Carmichael timeline: Planning Australia's biggest mining project Map: QLD Senior Queensland Government members were in meetings on Monday night, discussing how to urgently convince Indian company Adani to proceed with a board meeting to fund the proposed Carmichael coal mine. The mining giant has postponed its final investment decision on the $16.5-billion project in central Queensland until the State Government gives "clarity" over lower or deferred royalties. A company spokesman said they were waiting for the State Government to advise on whether it would offer a lower royalty rate or deferred royalties. The Adani board was to meet in India next week for final approval but has postponed the meeting. The State Cabinet on Monday discussed whether to give Adani a royalty discount or deferral, but no decision has been made. The ABC revealed last week the move could cost up to $320 million in lost royalties to Queensland. On Monday afternoon, Premier Annastacia Palaszczuk would not be drawn into revealing what was discussed in Cabinet. "There is no Cabinet submission at the moment, our main focus today was on the budget — it was on a budget which is going to be handed down next month, focused on infrastructure and focused on jobs," she said. The proposed royalty deal is understood to have caused division among Labor factions. Deputy Premier Jackie Trad and Roads Minister Mark Bailey, from the Left faction, have publicly opposed any government subsidy of the mine and said that had been Labor's position since before the 2015 state election. However earlier on Monday, Agriculture Minister Bill Byrne said royalty arrangements were being considered by the Government. "Queensland Labor has always taken a sensible and prudent approach to resource development," he said. Government indecision has put project at risk: Opposition After criticising the Government for considering royalties last week, the Opposition on Monday was criticising it for indecisiveness. Opposition Leader Tim Nicholls said the Government's had put Adani's multi-billion-dollar investment at risk.

"Labor should have come up with a decision and they've failed to do so," he said. "But their failure to come to a decision, their bitter internal divisions, their desire to say one thing in north Queensland and another in the south east, has led to the situation where Adani now is deferring its investment decision, and must be seriously wondering whether under this Labor Government the project should go ahead. "[The Queensland Government] delayed and deferred it and the people that are paying the price are the Queenslanders that are looking for jobs in this sector."

Just four days earlier, shadow treasurer Scott Emerson said it was "extraordinary" the Government was looking at "doing a secret deal" to benefit one company. Greens, activists accuse Adani of bullying Queensland Greens senator Larissa Waters said the mining company was trying to bully the State Government into handing over $320 million in free coal. "So far, Adani is in line for a $1 billion handout, unlimited free water, new legal loopholes, special changes to Native Title, a free pass on reef destruction," she said. She called on the Queensland and Federal Governments to abandon their support for the project. Activist group Get Up said if Adani could not afford the project without a royalty holiday, it was not financially viable. "If Adani can't afford to build the mine without free water, free money and free coal, then Queenslanders can't afford to let them build it at all," GetUp Queensland campaigner Ellen Roberts said. Adani previously said the proposed $16.5-billion mine would create thousands of local jobs, and it was expected to produce 25 million tonnes of coal per year during its first phase. The former Newman government granted the mine preliminary approval in May 2014, before it received federal backing five months later. Over the last two years, the project has slowly stepped through the approval process for the mine and associated railway line to transport coal in the Galilee Basin to the Abbott Point port. Infographic: A map showing the Adani Group's Carmichael coal mine and rail project as of March 2015. (Sourced: adanimining.com) Adani's $16 billion Queensland mega mine gets the go-ahead File image (AAP) Hide Grid Image 1/ Video Audio Adani has officially announced they will proceed on the first stage of the controversial Carmichael coal mine. Source: AAP 6 Jun 2017 - 11:18 AM  UPDATED 26 MINS AGO Adani has given the green light to start work on the $16 billion Carmichael coal mine in Queensland's Galilee Basin. Chairman Gautam Adani announced he had signed off on the project in a statement on Tuesday. "I am proud to announce the project has Final Investment Decision (FID) approval which marks the official start of one of the largest single Infrastructure - and job-creating - developments in Australia's recent history," Mr Adani said. Pre-construction work on the project is expected to begin in the September quarter. The company says the project will create 10,000 direct and indirect jobs, though opponents have challenged that claim. Mr Adani hit out at environmental activists who have challenged the project for years. "We have been challenged by activists in the courts, in inner city streets, and even outside banks that have not even been approached to finance the project," he said. "We are still facing activists. But we are committed to this project." ======================================================== April 23 2017 Save Print License article Byron Shire Council rejects Westpac on Adani mine Carolyn Cummins Byron Shire Council has upped the pressure on Westpac over any potential funding of the Adani mine by voting to withdraw the $1 million it has with the bank. Furthermore, the council, at last Thursday's meeting, said it will exclude Westpac from getting any of the $70 million-plus term deposits held by the council, that mature this year. "We will also divest $1 million currently invested with Westpac at the earliest opportunity that will not lead to financial harm for rate payers," the motion said. Bob Brown returned to Parliament House in Canberra with Geoff Cousins and environmental groups to protest against the Adani coal mine. Photo: Andrew Meares In response, the head of media communications at Westpac, David Lording, said the bank has "not been approached for funding by Adani". "But if we are approached we would look at it in the same way we look at all such funding proposals, in regard to any economic, governance and social impact," Mr Lording said. Protesting against the Adani coal mine at Westpac's 200th birthday party. Photo: Stop Adani Facebook Group "Westpac is also currently undertaking a review of our climate change action plan." On April 10, Westpac's 200th birthday party was targeted by climate change and anti-coal protesters seeking to pressure the bank into guaranteeing it will not fund the proposed Adani coal mine in Queensland. Despite Westpac having no plans to fund the project, organisers from Stop Adani Sydney gathered protesters outside the driveway to Carriageworks, Eveleigh, to chant "Stop Adani" at cars dropping off guests to the invite-only event.  Those opposed to the mine say money is one of the final hurdles Adani needs to clear before it can start building Australia's largest thermal coal mine in the Galilee Basin in central Queensland. The $16.5 billion mine already has state government and environmental approval. The coal will be sent via Abbot Point to India to be burned for electricity. Byron councillor Michael Lyon said it is time to "get serious" on climate change. He said the motion was passed to put pressure on Westpac to make a statement about any funding of Adani. The other three main trading banks have said they are not funding the mine. "Investment in renewables is the only sensible path forward and Adani's mine proposal is a step backwards. Any financial institution stuck in the past needs to understand that they will face a mass exodus of customers until they do what is required for a sustainable future," Mr Lyon said. He said Byron has an alliance with six other councils who are also opposed to the mine. "We passed this motion in support of Darebin Council, who advanced a similar initiative earlier this month, and other councils that have taken a similarly strong stance," Mr Lyon said. Byron Shire mayor Simon Richardson added "the Adani mine will be a stranded asset before it is built and be a legacy to economic stupidity and inflexible ideology". "Hopefully Westpac will join the community of Byron Shire and embrace the opportunities for a renewable and fossil free future," Mayor Richardson said at the meeting. =============== Westpac's anti-coal stance exposes a Coalition out of sync with business and public on climate Mark Kenny Follow on Twitter 34 reading now Obviously Westpac's public 'un-friending' of new coal - for which you can read Adani's Carmichael coal mine in the Galiliee Basin - is a body blow for a project whose backers are thinning by the day. Westpac is the last of the big four Australian banks to bin Adani's publicly toxic prospectus. Government 'should get smashed': Jones The government using taxpayers' dollars to support the Adani coal mine is the kind of policy that will see it "smashed in an election", says 2GB's Alan Jones. All are unmoved by the lure of ongoing coal profits, especially if it comes with ties to a venture that has become a byword for climate change denial.  Adani will continue to seek other financiers - including extraordinarily, the Australian taxpayer from whom it is telling Indian backers, it remains eligible for a $1 billion loan. This is despite the Northern Australia Infrastructure Fund rules, which appear to render it ineligible. t Westpac branded as 'wimps' over coal pledge With or without that welfare, the business case for new coal generally and the Adani mine in particular, looks to be ebbing. Fast.  Westpac's decision is an environmental declaration of intent. But it is a coldly commercial one also that recognises what the Australian government defiantly rejects: coal's day has passed. Resources and Northern Australia Minister Matt Canavan hit out strongly at the bank, suggesting it had succumbed to the inner-city politics of Sydney rather than the employment needs of the sunshine state. Remarkably, Canavan - cabinet minister - even advocated a boycott, counselling potential customers to back a bank that backs Queensland's interests. Doubtless there would be many Queenslanders upset by the Adani venture, not least the thousands already employed around the Great Barrier Reef. Prime Minister Malcolm Turnbull meets with India's Adani Group founder and chairman Gautam Adani in New Delhi earlier this month. Photo: Mick Tsikas Besides, Westpac is hardly going out on a limb. Try going to the AGL website. One of the nation's biggest energy companies has announced a new campaign to end its association with coal entirely: "The reasons for getting out of coal are all around us" its homepage proclaims. Privately, Malcolm Turnbull must surely be hoping the Adani thing just goes away.  Resources Minister Matthew Canavan has suggested Queenslanders avoid banking with Westpac after the bank ruled out lending to Adani. Photo: Alex Ellinghausen The PM may be a progressive rationalist at heart but in his head there are other realities to balance. Party room realities like Tony Abbott, Peter Dutton, and the Nationals, whose head-in-the-sand record on climate change has left farmers so exposed that even the National Farmers Federation now proposes a carbon price. Paul Keating once described Turnbull as a cherry on a compost heap. The trouble with compost heaps is they tend to be stationary. This issue is anything but, and if you want proof, just follow the money. ============ Westpac rules out funding projects in the Galilee Basin coalfields TONY RAGGATT, Townsville Bulletin April 28, 2017 7:41pm CUSTOMERS have been urged to boycott Westpac after the bank ruled out any finance for the massive Adani coal mine in central Queensland Northern Australia Minister and Queensland Senator Matt Canavan yesterday branded the bank “wimps’’ and unAustralian over the move which follows vigorous campaigning by environmental groups opposed to the multi-billion dollar project. “I can only conclude from this decision by Westpac that they are seeking to revert to their original name as the Bank of New South Wales because they are turning their back on Queensland,’’ he said. “May I suggest those Queenslanders who are seeking a home loan or a long-term bank deposit or some such in the next few months might want to back a bank that is backing the interests of Queenslanders.” Westpac has announced a revised climate change action plan, which includes a ban on financing thermal coal projects in undeveloped coal ­basins such as the Galilee. Green groups claimed it meant approving government loans to a Galilee rail line would be “near impossible” while the Queensland Resources Council said it was extraordinary a bank would be “judge, jury and executioner” on the viability of opening the Galilee coal province. Westpac said financing for new thermal coal projects would be limited to existing coal producing basins and where the calorific value of coal ranked in the top 15 per cent globally. Adani’s Carmichael mine, 160km northeast of Clermont, is among half a dozen new coal projects in the untapped Galilee province. In a statement, Adani Australia said it remained fervently committed to developing Australia’s next generation high quality thermal coal resource in the Galilee Basin. “The Carmichael mine will produce thermal coal that easily meets the emissions standards announced by Westpac Bank,” it said. QRC chief executive Ian Macfarlane said Westpac’s statement was ridiculous when it came to such an integral part of the economy. “I think it’s extraordinary that a bank like Westpac who, along with the other three majors, recently pleaded with the Federal Government not to have a royal commission into their operations, would now be judge, jury and executioner on whether something is economically viable and sustainable in a new basin such as the Galilee,” Mr Macfarlane said. Environmental Justice Australia’s David Barnden said Westpac’s move would likely make it impossible for the Government’s Northern Australia Infrastructure Facility to provide a $900 million loan for the project’s rail line. ============== The first mega-mine of the largest coal-mining complex in the world is close to being ‘developed’ in Central Queensland, Australia. These huge coal mining projects are planned in a region known as the Galilee Basin. Only the tar sands in Canada and oil drilling in the Arctic compare in the scale of ecological disaster. Local and international companies are waiting to get their greedy hands dirty in the Galilee. Against the wishes of the Traditional Owners, they threaten irreparable harm to the Great Barrier Reef, the Great Artesian Basin and endangered woodlands. They know projects of such magnitude threaten runaway climate change. But, they continue anyway for profit. They are eco-terrorists, threatening ecocide. map 1FIRST PROJECT: Carmichael Mine Carmichael Mine is the biggest proposed coal mine in the Galilee Basin. At forty kilometres long, it would include six open cut pits and five underground mines. Measuring a whopping 28,000 hectares, the mine would be seven times the area of Sydney Harbour. Read more on the astronomical impacts of this mine alone here. Please click on map for a larger image. FIRST TARGETS: Adani and their friends Against the wishes of the Traditional Owners, conservative and ‘progressive’ governments in Australia have controversially approved Adani’s Carmichael Mine. It is also the mining project closest to financial closure. All those involved in this coal mine are priority targets of the Galilee Blockade campaign. Together we will win!

Reserve Bank of Australia keeps interest rates on hold in March

3 Mar 2015 - 4:18pm Homeowners warned over future rates rises Today's rate decision on Australia's property market would be a boost to sentiment, the Real Estate Institute of Australia says. Residential and commercial buildings in Sydney Today's interest rate decision will increase sentiment in Australia's property market, but people in debt should beware of future rises, the Real Estate Institute of Australia says. By Jason Thomas 3 Mar 2015 - 3:58 PM UPDATED 8 MINS Today, the Reserve Bank of Australia (RBA) surprised economists by holding interest rates at 2.25 per cent. The RBA's decision will benefit Australia’s residential property market, the Real Estate Institute of Australia (REIA) says. REIA president Neville Sanders said stability would boost to sentiment. “Certainly existing home owners will find these stable rates welcome and new entrants to the market will also find that climate of stability important,” Mr Sanders said. “We do, however, recommend that new borrowers shouldn’t overstretch themselves.” He said interest rates are at an historic low now, therefore, people should expect rates to go up in future. Mr Neville said some pockets of Australia’s residential property market were facing greater demand than others, adding to price pressure. “There’s some pockets of markets, in particular Sydney and also Melbourne… they’re very strong and growth is very high at the moment,” Mr Neville said. However, in other markets like Australia’s regional areas, growth is more subdued. The disparity would continue since the price of property in Sydney and Melbourne, where many Australians want to live, was subject to higher demand, Mr Sanders said. ===== Reserve Bank of Australia keeps interest rates on hold in March SONJA KOREMANS WITH WIRES News Corp Australia Network March 03, 2015 2:16PM Despite the rate pause, the RBA was not short of reasons to reduce rates today, amid further signs the economy is deteriorating. THE RBA has kept rates steady, despite further signs the economy is deteriorating. The central bank’s decision to hold the cash rate at 2.25 per cent after last month’s cut is likely to be based on fears that a further discount would add fuel to property prices. The RBA debated the problem of skyrocketing house prices on February 3, according to minutes of their last meeting, before deciding to cut rates for the first time in more than a year and a half. The nine-member board was divided on the discount. With the country’s home prices already at record-high levels, there are signs of momentum following last month’s surprise cut. Auction clearance rates in some major housing markets have been nearing 90 per cent in recent weeks. Nationally, home prices have climbed 22 per cent since mid-2012. RBA: Central bank’s March decision There are already signs of auction momentum following last month’s surprise cut. ROOM TO MOVE ON RATES However, the RBA was not short of reasons to reduce rates today. Unemployment has hit a 12-year high of 6.4 per cent, business investment expectations have reached shockingly weak levels and cheap petrol is expected to push inflation below the RBA’s two-to-three per cent target band. R On top of that, the Australian dollar has been edging higher. The Commonwealth Bank, ANZ, Westpac and AMP Capital were among those lenders forecasting a March cut, with the general consensus being the RBA tends to deliver cuts in pairs. “Usually when they cut rates, they don’t just do one out of the blue and stop. It’s normally two,” Commonwealth Bank senior economist Michael Workman said. Finder money expert Michelle Hutchison said today’s cash rate pause is good news for savers, who have been hit hard with cuts to their returns for over three years. “But it’s not expected to last long for them, with the majority of experts forecasting another rate reduction by June this year,” Ms Hutchison said. RATE REPRIEVE AHEAD Financial markets are now pricing in rates to hit 1.75 per cent by the end of the year. AMP chief economist Shane Oliver said an RBA cut below 2 per cent is likely to result in home loan interest rates falling to less than 4 per cent. “It wouldn’t surprise me if we saw the cash rate at 1.5 or 1.75 per cent,’’ Mr Oliver said. Aussie Home Loan executive chairman John Symond also expects rates to continue on their downward trend in the coming months. “I think there’s probably another two rate cuts left,’’ he said. “I would hope and pray it doesn’t go any further than that because that would signal that our economy is really heading the wrong way.” The Australian dollar’s movement, and how low the RBA could ultimately cut the cash rate over the next few months, may depend on when the US Federal Reserve begins hiking its interest rates.

RBA rate cut: cheapest loans in 40 years?

Venessa Paech by Venessa Paech 03 Feb 2015 Interest Rates, Property news & information, Reserve Bank of Australia RBA cuts cash rate by 25 basis points to 2.25% in February 2015; The Bank is working with other regulators to assess and contain economic risks that may arise from the housing market In its meeting today the Reserve Bank of Australia have moved to cut interest rates to 2.25% p.a., paving the way for the cheapest home loans in 40 years. The decision was one most experts were predicting, though the majority had pegged it to occur later in the year. Economists still agree a further reduction in rates is likely in 2015, in an effort to buoy our employment figures and continue the economic reset of the post-resources boom era. According to RBA Governor Glenn Stevens, the Board has “taken time to assess the effects of the substantial easing in policy that had already been put in place and monitored developments in Australia and abroad.” Stevens says the cut is expected to add some further support to demand, “to foster sustainable growth and inflation outcomes consistent with the target,” citing modest income growth and the Australian dollar, which fell steeply in the wake of the RBA’s announcement. Political instability may also factor into the decision, with confidence waning in some areas of the economy as Canberra sees increased leadership speculation. The Reserve Bank has to strike a balance between economic growth and growth that risks overstimulating the housing market. Read the full decision notes Read more: Rates tipped to decrease in 2015 House in SA Experts missed the early mark “Lower mortgage rates have the potential to add some fuel to what are already strong housing market conditions,” says RP Data’s Tim Lawless. Lawless says the cut could see the standard variable mortgage rate fall to 5.7% and discounted variable rates to 4.85% – the cheapest home loans since July 1968. Dwelling values Australia’s capital cities have increased by 19.6% since rates began their downward trend in November 2011. “Lower consumer confidence, stricter serviceability requirements for borrowers, tighter lending conditions for investors, affordability challenges and low rental yields are all factors that may contribute to the moderation in housing market conditions over 2015.” finder.com.au spokesperson Michelle Hutchinson agrees today’s cut was quicker than anticipated. “28 of the 30 leading economists and experts from the finder.com.au Reserve Bank Survey got it wrong, as they were forecasting no change today,” she says. “There is still a chance we’ll see the Reserve Bank lift the cash rate, with 16 of 30 experts expecting to see a rise within the next 18 months.” Will lenders pass it on? “We hope lenders will pass on the full rate cuts and more to their variable rate home loan customers because there’s no excuse not to pass on the full cuts,” says Hutchinson. Bank of Queensland has already announced it will lower rates in line with the news. Richmond homes Melbourne Housing market starting strong The RP Data Home Value Index has capital city dwelling values rising by 1.3% during January, suggesting a solid overall start for the 2015 housing market, driven by Melbourne, Sydney and Hobart performance. Melbourne values were up 2.7% for January, Sydney values increased by 1.4% and Hobart property values were up 1.6%. Highlights over 3 months to January 2015 •Best performing capital city: Hobart +4.4% •Weakest performing capital city: Darwin -2.6% •Highest rental yields: Darwin houses with gross rental yield of 6% and Darwin Units at 5.9% •Lowest rental yields: Melbourne houses with gross rental yield of 3.2% and Melbourne units at 4.2% •Most expensive city: Sydney with a median dwelling price of $723,000 •Most affordable city: Hobart with a median dwelling price of $341,000 Follow us on Twitter for more news, tips and inspiration. Become our chum on Facebook and explore our Pinterest boards. Like this article or found it helpful? Share it! ============================== Westpac has cut its SVR by 0.28 percentage points to 5.7 per cent, its level lowest since 2009. claimed the banks would only pass on 0.15%. Hoofarted said the banks wouldn't pass it on. And there were also heaps of idiots on Macrobusiness claiming the RBA rate cuts would be ineffective because banks wouldn't pass it on. I'm with Westpac. Looking forward to my 0.28% discount... that's worth several thousand dollars a year to me. It's like getting a 5% pay raise. why has Private House building been falling for nine months? Perhaps the RBA wants to stimulate construction? Meanwhile in reality most home owners with a mortgage just got $75 a month pay rise in all effect. With perhaps two more cuts to come home owners with a mortgage could be saving over $2200 a year in interest. That alone pays for a lot of food. ===== Markets Live: Stocks defy gravity DateFebruary 6, 2015 - 10:28AM 368 reading now Comments 32 Read later Patrick Commins, Jens Meyer The local sharemarket is continuing its stunning rally, putting the ASX200 on track for an unprecedented 12th day of gains, as investors await the RBA's statement on monetary policy. . submit to reddit Email article Print Reprints & permissions . Sort posts by: Latest Oldest Most liked Most disliked . Live article connection interrupted. Please refresh your browser 10:40am: Virgin Australia has posted a $55.3 million pre-tax profit in the second quarter of this financial year as it benefits from a truce in its battle with Qantas in the domestic air-travel market and cheaper jet fuel. While the airline is not due to report its half-year results until February 19, the release of the quarterly figures means that Virgin posted a profit of $10.3 million for the second half, compared with a $49.7 million loss previously. Low-cost carrier Tigerair Australia, which had been a drag on Virgin's financial results, reported a $500,000 profit in the second quarter, up from a $15.5 million loss in the first quarter. Virgin on Friday said it had completed its acquisition of the 40 per cent of Tigerair that it had not already owned, which clears the way for Tigerair to consider launching international flights. Virgin now reports quarterly results because shareholder Singapore Airlines, which reports later on Friday, is required to equity account for its stake in the Australian carrier. Virgin reported a second quarter pretax underlying profit of $55.3 million after having reported a $45 million underlying pretax loss in the first quarter. The airline had advised at its annual meeting in November that it would be profitable in the second quarter, but it had not said whether its first-half would be profitable. Rival Qantas has forecast a first-half pretax underlying profit of $300 million to $350 million driven primarily by cost-cutting but also aided by a fall in the oil price, the removal of the carbon tax and improved market conditions. Virgin said it received a $7 million benefit from falling fuel prices in the second quarter, which compares to the first-half benefit of $30 million forecast by Qantas. But both airlines are expected to benefit substantially from the oil price fall in the second half of the financial year. Virgin shares are up 3.4 per cent at 46 cents, while Qantas has dropped 1.2 per cent to $2.47, after the oil price jumped overnight. Virgin recorded a pre-tax profit in the second quarter, which includes the busy Christmas holiday travel period. Virgin recorded a pre-tax profit in the second quarter, which includes the busy Christmas holiday travel period. Photo: Patrick Scala Upvotes:0 Downvotes:0 Copy Link . 10:27am: The local sharemarket is continuing its stunning rally, putting the ASX200 on track for an unprecedented 12th day of gains. The benchmark index is up 25.5 points, or 0.4 per cent, at 5836.5, while the broader All Ords has gained 24.0 points, or 0.4 per cent, to 5789.5. Among the sectors, energy is up 1.2 per cent after a strong rise in the oil price overnight, materials have added 0.7 per cent and financials are up another 0.4 per cent. Upvotes:2 Downvotes:2 Copy Link . 10:05am: The NAB chief's star is shining bright, writes BusinessDay columnist Adele Ferguson: Five months into the top job NAB boss Andrew Thorburn is showing all the signs of pulling off what his predecessors failed to do: focus on the bank's strengths and deal with its problematic overseas and domestic business banking operations. The release of $1.65 billion cash profit, up 6 per cent on the previous corresponding December quarter, puts the bank on track to join the other big four banks and deliver a record profit in 2015. The solid result will also help it feed the dividend monster, which is dominating the minds and portfolios of investors in the hunt for investments that offer them a decent return in a low interest rate environment. The big four banks will pay out an estimated $23 billion in dividends to shareholders in 2015. Its latest quarterly results show that bad and doubtful debts are falling, asset quality is improving, its troubled British banking assets reported a small profit and group revenue is rising. Most importantly, the accompanying commentary from Mr Thorburn shows he and his new team are committed to closing the performance gap between the big four banks. To put it another way, Mr Thorburn has done more at NAB in the past five months than the former chief executive Cameron Clyne did in five years. As soon as he took the job he announced a spin-off and listing of its US bank Great Western Bank, overhauled the senior management team and sold £1.2 billion of higher risk loans from its British commercial real estate portfolio. The property portfolio is now sitting at £800 million compared with £5.6 billion in October 2012. If he can extricate the bank from Britain, and deal with other problem areas including its specialised group of assets, its shares and return on equity will immediately bounce. Read more. Andrew Thorburn has done more at NAB in the past five months than the former chief executive Cameron Clyne did in five years, says Adele Ferguson. Andrew Thorburn has done more at NAB in the past five months than the former chief executive Cameron Clyne did in five years, says Adele Ferguson. Photo: Josh Robenstone Upvotes:1 Downvotes:0 Copy Link . 9:49am: Denmark's central bank cut its benchmark rate for a fourth time this year as it steps up efforts to fight back capital flows that threaten to strengthen the krone beyond the confines of its euro peg. The central bank lowered the deposit rate to minus 0.75 per cent from minus 0.5 per cent, it said today. It left its lending rate at 0.05 per cent. "The fixed exchange rate policy is an indispensable element of economic policy in Denmark - and has been so since 1982," Governor Lars Rohde said in the statement. "Danmarks Nationalbank has the necessary instruments to defend the fixed exchange rate policy for as long as it takes." Denmark has resorted to an unprecedented palette of measures to prevent the krone appreciating, including raising foreign reserves by a record $US16.3 billion last month to about 30 per cent of gross domestic product and suspending government bond sales to drive down longer yields. Speculation against the bank's ability to preserve its currency regime grew after the Swiss National Bank abandoned its euro cap last month. "There is no upper limit to the size of the foreign exchange reserve," Rohde said. "The sole purpose of the monetary policy instruments is maintaining a stable krone exchange rate against the euro. The revenue of Danmarks Nationalbank is positively affected by the increase of the foreign exchange reserves." The measures have driven down Danish yields, forcing banks to rethink their operations as they struggle to adjust to negative rates. The country's mortgage banks are meeting with the government today to discuss a potential unified industry response to the rate climate. Yields on Danish government bonds are negative for all maturities as long as five years, while mortgage bond yields trade below zero for maturities as long as three years. Denmark, one of only four AAA rated nations left in the European Union, rejected euro membership in a 2000 referendum. The central bank has since defended the krone's peg to the euro, and before that to the deutschmark, starting in 1982. Upvotes:0 Downvotes:1 Copy Link . 9:42am: American investors are snapping up local equities in droves on the Australian dollar's weakness and greenback's strength, investment experts say. Citi's co-head of equities in Australia and New Zealand, Adam Lavis, said that over the past three weeks there has been a "substantial" increase in the amount of foreign money being invested in the Australian stock market. "We are seeing constant every day inflows. There is general global interest but it is predominantly from the United States." He said that while he could not reveal the exact boost in funds flowing into Australia via Citi's equities team, the bulk of money was being invested in listed real estate with high yields as well as health and mining companies with US dollar earnings. Since the start of this year, Australian equities have outperformed US stocks with a 6.3 per cent gain for the benchmark S&P/ASX 200 versus a fall of 0.8 per cent for the US S&P 500 index. It's a different story to what we saw last year, with the local benchmark up just 1.2 per cent and the main US index finishing 11.4 per cent stronger. While in local currency terms, many Australian stocks have rallied this year, in US dollar terms the gains haven't been as high. "What we have seen is a prolonged period of underperformance of Australia against the US, and we are starting to see that reverse. "The whole market in US dollar terms has become about 20 per cent cheaper because of the weaker currency," he said. The local currency was trading around US93¢ at the start of September but its descent accelerated over the December quarter as the US economy strengthened and attention turned to disappointing growth in Australia. "We are seeing a lot more interest from offshore investors and that will continue to see with [Tuesday's Reserve Bank] rate cut and as the Australian dollar slips below US77¢", said Mr Lavis. The Citi house view is that the Australian dollar will fall to US70¢ in 12 months' time. Read more. Citi's co-head of equities in Australia and New Zealand, Adam Lavis, said that over the past three weeks there has been a "substantial" increase in the amount of foreign money being invested in the Australian stock market. Citi's co-head of equities in Australia and New Zealand, Adam Lavis, said that over the past three weeks there has been a "substantial" increase in the amount of foreign money being invested in the Australian stock market. Photo: Louie Douvis Upvotes:8 Downvotes:0 Copy Link . 9:35am: The CEO of OzForex Group has announced he will step down after seven and a half years in the job, with the currency exchange business now on a “global search” for a new boss. CEO Neil Helm said in a statement to the ASX: “Following the successful IPO in 2013 and the company's first year of operation as an independent, listed entity and with the company in such great shape I feel the time is right for me to make a lifestyle change and spend more time with my family”. There was no departure date in the release and Helm said that he will assist the company to find his replacement. Upvotes:1 Downvotes:0 Copy Link . 9:20am: Prime Minister Alexis Tsipras is preparing to set out the most detailed account yet of his plans to revive the Greek economy after a diplomatic push ended with a rebuff from Germany and a warning shot from the European Central Bank. Tsipras was greeted by the rare sight of a pro-government demonstration in downtown Athens on Thursday night after he vowed to stick to his anti-bailout campaign pledges, despite their rejection by German Finance Minister Wolfgang Schaeuble. The prime minister will lay out his policy plans on Sunday, in the opening speech of the three-day-long parliamentary debate leading up to a confidence vote to confirm his government. Ministers met in Athens on Thursday to discuss the policy program and may reconvene on Saturday to assess Finance Minister Yanis Varoufakis’s feedback from his meeting with Schaeuble in Berlin. The first direct talks between Greece and Germany since Tsipras took power yielded no agreement on how to narrow their differences over Tsipras’s determination to end the German-led austerity regime. “We agreed to disagree” Schaeuble said after meeting Varoufakis on Thursday. “We didn’t even agree to disagree from where I’m standing,” the Greek responded. A few hours before the Berlin encounter, the ECB heaped pressure on Tsipras by restricting Greek access to its direct liquidity lines, citing concerns about the country’s commitment to existing bailout pledges. The Greek government opted to “stop cooperating with the troika,” ECB Governing Council member Jens Weidmann said in a speech in Venice on Thursday. The move leaves Greek banks reliant on 59.5 billion euros ($US68.3 billion) of emergency liquidity assistance, extended by the Bank of Greece, which is subject to review by the ECB Governing Council every two weeks. Undeterred by the ECB reaction, which triggered a sell-off in Greek bank shares, Tsipras told lawmakers from his party, Syriza, that he intends to stick to his campaign promises. “The government will negotiate hard for the first time in years, and will put a final end to the troika and its policies,” Tsipras said. Awkward: Greece's finance minister Yanis Varoufakis, right, and Wolfgang Schaeuble. Awkward: Greece's finance minister Yanis Varoufakis, right, and Wolfgang Schaeuble. Photo: Bloomberg Upvotes:0 Downvotes:0 Copy Link . 9:15am: US stocks climbed, with benchmark indexes erasing declines for the year, as oil resumed a rebound and Pfizer announced a $US17 billion deal. Denbury Resources and Noble Corp jumped more than 3.7 per cent as oil climbed 4.7 per cent. Pfizer added 2.9 per cent as it agreed to buy Hospira, the biggest provider of injectable drugs and infusion technology. Hospira jumped 35 per cent. The Standard & Poor’s 500 Index added 1 per cent to 2,062.5. The Dow Jones Industrial Average rose 211.9 points, or 1.2 per cent, to 17,884.9. The Russell 2000 Index surged 1.5 per cent. “Right now it’s earnings, Greece and M&A,” Krishna Memani, chief investment officer at Oppenheimer Funds, said. “It’s more about the corporate outlook in the US remaining good and the realisation that while the Greek issue is important, it will eventually be resolved.” Data showed fewer Americans than forecast filed jobless claims last week. Tonight’s jobs report from the Labor Department is predicted to show non-farm payrolls rose by 230,000 last month, while the unemployment rate remained at 5.6 per cent. A separate report showed the US trade deficit increased unexpectedly in December to a two-year high on a pickup in imports of motor vehicles and fewer shipments overseas, showing US demand is holding up as global economies cool. “Obviously Europe matters but what’s a little more important is what’s happening domestically,” Jerry Villella, a global investment specialist at JP Morgan Private Bank, said. “We’re about halfway through earnings season and with the exception of energy and financials, it’s been mostly a good story.” Upvotes:0 Downvotes:2 Copy Link . 9:04am: Local shares are poised to open higher on a positive lead from Wall Street as oil bounced higher and ahead of the latest RBA's policy statement. Here’s what you need2know: • SPI futures up 39pts, or 0.7%, at 5794 • AUD at 78 US cents, 91.87 Japanese yen, 68.09 Euro cents and 51.01 British pence. • On Wall St, S&P 500 +1%, Dow +1.2%, Nasdaq +1% • In Europe, Stoxx 50 -0.2%, FTSE +0.1%, CAC +0.2%, DAX -0.1% • Spot gold down $US2.89 or 0.2% to $US1266.46 an ounce • Brent oil up $US2.33 or 4.3% to $US56.49 per barrel • Iron ore down 94 US cents, or 1.5%, to $US61.64 What's on today: • Australia: RBA Statement on Monetary Policy at 11:30 AEDT • US non-farm payrolls, unemployment rate at 12:30am • Germany: industrial production • UK: trade balance • Canada: building permits, unemployment Stocks to watch: • Royal Wolf Holdings, Energy Resources profit results • Boral cut to neutral at JP Morgan • Brambles cut to hold at CIMB • Fletcher Building cut to underweight • Monadelphous cut to hold at Morningstar • Qantas cut to sell at M’star • REA Group raised to buy v underperform at BBY; cut to neutral at UBS and Credit Suisse • SCA Property Group cut to underweight at CBA • Seven West cut to neutral at Goldies • Stockland raised to overweight at CBA • Tabcorp cut to neutral at Credit Suisse ; shares remain in trading halt • Toll cut to reduce at CIMB . Read more: http://www.smh.com.au/business/markets-live/markets-live-stocks-defy-gravity-20150206-3plr9.html#ixzz3QuxQpNtv ========