The lowest mortgage rates ever in 2009 have given home buyers and homeowners a welcome relief in 2009, with the Reserve Bank of Australia delivering the lowest cash rates in history.
With the unchartered waters of the World Financial crisis, ironically created by US banks in the mortgage industry, house prices remained flat in Australia, and started to rise again in the second half of the year, when it became clear that Australia had dodged the Recession bullet, and unemployment fears had evaporated, the Australian property market was in a business as usual mode.
And for that we have to thank the Rudd Labor Government's swift action on economic stimulus packages, and its execution of the roll-out, which continues into infrstructure building for the next few years.
Looking back on 2009, one thing that joe public did not see was the demise of the non-bank mortgage sector, with capital raisings for mortgage securitisation on the nose, the mortgage securitisation industry was on it knees.
The Rudd Government rescued the mortgage securitisation industry with a couple of large cash injections, and now the industry has sprung back to life.
But not before the damage was done. The non-bank mortgage sector has less than 5% market share right now, when you take out all the brands that the banks have recently acquired, including RAMS, Aussie and Challenger. The sub-prime mortgage market was virtually wiped out in 2009, though its now making a comeback.
Most of the big origination players were picked up for peanuts by the big banks, and now the Australian mortgage borrower will pay, with banks moving to improve their margins by rising their rates above the recent increases of the base rates by the RBA. [Why the ACCC allowed this to happen is beyond me. The banks have bought out their biggest competitors.]
Wespac in particular were rapacious in their price increases. This just goes to show that Australia's mortgage industry in controlled by the big banks, and as soon as the opportunity presents they will sting you.
So for 2010 the message is clear. Banks put you second to their shareholders profits. By supporting your local mortgage originator, and refinancing away from the banks, you will secure better mortgage rates for yourself, and bring margins at the banks down nationally. A well supported non-bank mortgage sector like Mr Mortgage is your best guarantee for lower mortgage rates in 2010, regardless of how many rises the RBA imposes this year.
