Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

Thematic (Sector/Industry)

Australia Financials / Thematic (Sector/Industry)

<ul><li>In its updated Financial Stability Review released last week, the RBA drew further attention to the growing risks associated with interest only mortgage lending.  The greater outstanding balance associated with interest only (IO) loans means that IO borrowers maintain higher leverage than principal &amp; interest borrowers and are therefore more exposed to any fall in property prices.</li><li>Record low rental yields, stagnant rental incomes and a lift in interest only mortgage rates has lifted the level of break-even capital growth for property investors.</li><li>The arithmetic facing interest only property investors is likely to become even less compelling going forward, as growth in rental incomes continues to slow, and interest rates on interest only loans increase in response to banks implementing APRA’s recommendations to reduce growth in interest only lending.</li></ul>

In its updated Financial Stability Review released last week, the RBA drew further attention to the growing risks associated with interest only mortgage lending.  The greater outstanding balance associated with interest only (IO) loans means that IO borrowers maintain higher leverage than principal &amp; interest borrowers and are therefore more exposed to any fall in property prices.Record low rental yields, stagnant rental incomes and a lift in interest only mortgage rates has lifted the level of break-even capital growth for property investors.The arithmetic facing interest only property investors is likely to become even less compelling going forward, as growth in rental incomes continues to slow, and interest rates on interest only loans increase in response to banks implementing APRA’s recommendations to reduce growth in interest only lending.

Household Sector Vulnerability Rises as Interest Only Mortgage Lending Continues to Grow