The Elephant in the Room
The property podcast for the thinking person.

Episodes

Episode 278: Will the Mortgage Cliff in 2023 be a Non-Event or a Game Changer?

Could the mortgage cliff in 2023 be the start of a new era for the property market? Over the next few months many Australians will come off fixed rates and face higher mortgage repayments. But is this just a short-term blip, or could it have a lasting impact on the property market?

To help us better understand the potential impact of the mortgage cliff, we're joined by Martin North, the founder of Digital Finance Analytics. Martin is an expert on mortgage stress in Australia, and he publishes a number of relevant indices on defaults, mortgage stress, and consumer confidence.

In this episode, Martin shares his thoughts on the scale of the problem and who is most at risk. He discusses how the current interest rate hike cycle will impact different segments of the property market. Martin also shares his insights on how the market as a whole might respond to the mortgage cliff and whether we can expect to see a significant slowdown in property prices.

So whether you're a homeowner, property investor, or mortgage broker, this is an episode you won't want to miss.

Episode Highlights:

00:00 - Mortgage stress in Australia - what is the scale of the problem and who is most at risk?

01:03 - Who is Martin North?

02:15 - What’s coming up over the next six months for mortgage rates?

05:55 - Are fixed mortgage rates going to have an immediate effect on home sales?

08:48 - Percentage of loans in big banks' loan books written during low-interest-rate periods

11:32 - How are first-time homebuyers impacted by the current economic climate?

14:51 - What impact do price wars have on banks' net interest margins?

22:01 - What is currently going on in the housing market?

26:04 - Martin’s thoughts on the property market splitting

28:19 - Different trends in property prices across different regions in Australia

36:12 - How does property composition affect price dynamics?

38:31 - What is the most significant linkage to house price movement?

41:28 - Is borrowing capacity as important as buying capacity?

43:27 - Martin’s outlook for the interest rates in Australia and the global economy

45:20 - Boom or bust? A peek into the Australian property market for February to March

47:27 - The impact of the RBA lift on buying power and credit availability

48:47 - What are the dangers of waiting for the bottom to happen?

51:22 - More thoughts on the increased inequality in the society

54:45 - Martin North’s property dumbo

56:40 - Martin North’s anti-dumbo

About Our Guest:

Martin North is a prominent researcher who specialises in the mortgage lending, savings payments, and superannuation sectors. He is the founder of Digital Finance Analytics — a boutique research, analysis, and consulting firm. He has a long history of research in mortgage stress in Australia and publishes relevant indices on defaults, mortgage stress, and consumer confidence. In addition to his work in finance, he curates the YouTube channel "Walk the World," where he covers finance and property news with a distinctively Australian flavour and invites controversial guests. He is also a founding director of Asbestos Awareness Australia, a registered charity he established with his late wife, Jill, in 2021.

Connect with Martin North:

Resources:

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Chris Batesde-index