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Guest Carol from Vista Financial

QBE Australian Housing Outlook 2018-2021

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Guest Carol from Vista Financial

This report into housing has been released recently, produced by BIS Oxford Economics for QBE Lenders’ Mortgage Insurance.

You may read the report on their website or download the full interactive PDF report here.

Short on time? Watch their short video instead.

If you want to read more download the PDF and click on the titles on the contents page to navigate to the parts you care about.

Where did this report come from?

QBE is one of the two main lenders mortgage insurance providers in Australia - the other being Genworth.

BIS Oxford Economics is a large macroeconomics and industry forecast provider. The two companies have partnered for the last 17 years to generate these reports.

What is LMI?

Lenders mortgage insurance (LMI) is an insurance you pay if you have less than 20% deposit (i.e. you borrow more than 80%) for a property purchase.

LMI protects the lender, it does not protect you.

If you put in less cash, it is a riskier transaction for the lender. Hence they hedge their bets. If you can't pay, they will chase you for the funds, and they submit a claim through the LMI provider to try recoup their losses.

That's right, you pay for the lender's insurance premium so they are protected from you! Normally the LMI premium can be added on top of the the base loan amount (capitalised). Or you can save like crazy to have a 20% deposit, or use a guarantor.

Are their predictions for the future accurate?

Who knows, I don't have a crystal ball either. This is an outlook report - an insight into the property market in Australia. A predication is still essentially an educated guess, but an interesting read nonetheless. I am providing it here as one source of information. Make of it what you may.

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