Podcast Appearances
And if that's true, which I think it pretty much is, people, in terms of their mortgage rates, this behaviour we've seen lately towards shifting out for longer fixed rates, taking more fixed rates and taking them for longer terms, seems to be a pretty wise move, given that we know the next shift in the OCR is likely to be up at some stage, barring anything can change, of course.
um but just at this point it seems like that move will be upwards so those people have been taking longer term fixed rates and they've probably been making a fairly good move i would have thought um so yeah i mean how do i how do i summarize that it's for me it's it's look at the numbers they may not change very much but there's going to be a focus on
Yeah, so, I mean, it is a couple of months ago now, isn't it?
This is just another split of the Reserve Bank numbers.
They put out various cuts of them and they released them in a staggered way.
I think this is the last cut of December's numbers that we'll get.
But yeah, so it covers, as you say, it covers so-called new loans.
So it's when you're buying a house, when you're switching banks, and keep in mind that there was a whole wave of banks switching in December, as well as loan top-ups.
So I guess equity withdrawal is another way of,
thinking of that so it's those kind of so-called loan events um and yeah obviously we had a monetary policy statement at the end of november so we saw in november's data that uh 49 of new lending done in november was floating i guess people just wanted if they were settling alone they wanted to stay a bit flexible you know just wait and see what happened at that official cash rate decision
and and then you know decide what to do after that well we got that decision it was pretty clear signal of look we're done cutting um we might not be rising yet but at least we're kind of done cutting so then roll forward to december and all those people who were or you know the next batch of people coming through i guess setting up i'm not going to float i'm going to i'm going to fix for longer so 49 floating in november fell to 22 in december so really sharp fall away and that sort of share of lending on floating rates back to
kind of there's always loans going out on floating rates for whatever reason so a much more normal number 49 was i think a record high uh we're back down to 22 which was um back down to much more normal levels on the flip side um only 19 fixed for at least a year in november roll forward to december and that was up to 49 so it was pretty much a mirror image of each other everyone floated in november everyone fixed for at least a year and um in december so
yeah quite a quite a stark turnaround two and three year fixed rates were really popular in december so that seems to be the term that people are shifting out to not so much going up to those five year loans uh you know it's it's a big call i guess to fix for that that long um but certainly popularity of that two and three year duration so yeah i guess it's um it's as you'd expect as you get towards the bottom of a rate cycle people have been riding that wave down if they can
get to the bottom of that rate cycle pretty clear signal from the reserve being that that's kind of where we are no surprise people start to fix a bit longer again and you know think about trying to avoid that upside risk for for market rates so whenever that happens as we've just talked about it might not be straight away but it's probably coming at some point so yeah not surprising to see people fixing for longer i guess it's something i've been thinking about as a
as a theme for this year.
It's not necessarily... I don't think it necessarily sort of dramatically changes the housing market in either direction, sort of a personal finance thing.
But, yeah, definitely been a theme I've been kind of watching for is when does this shift longer start?
And it seems like we're probably there now, and you'd imagine that this remains in place for a while.
So, yeah, really interesting data.
It's quite stark on a chart.