We Need Competition!

In a recent release by CBA, they disclosed that the leverage ratio was only 4.9%.  Australia's biggest bank leverages its capital twenty times.  This is a kin to them lending you money you just put 5% of your own money in.

This is in stark contrast with the regional banks, their so called "competition", which can't leverage twenty times but fifteen times.

The supposed banking "enquiry" was supposed to level the playing field.

What happened members of parliament?

Meanwhile, Wayne Byres, chairman of APRA, continues to come up with the wrong solution to rising house prices in Sydney and Melbourne.  He continues to restrict supply into the markets and we continue to see as a result "APRA continues property boom."

These ivory tower thinkers just don't get it.  If you want to bring down the price of bananas, the average man in the street knows that you have to increase the supply of bananas coming into the store.  Not decrease the supply.

What does this mean? Byres and APRA are good for property investors.  In Sydney, the property boom will continue well past its end date which should have been Christmas 2015.  Melbourne will continue to increase above trend, now joined by the emerging normal cycle uplift in SE Queensland.

Happy investing.

Kevin Young Club Founder