Getting ready for a property market correction

Last week’s dual announcement by Westpac (WBC) of an increase in its mortgage rates and the capital raising of $3.5 billion is still being digested by market participants. WBC’s announcement was peculiar in one specific regard. They increased their dividend, at the same time as declaring its desire to raise more capital. Westpac’s capital decisions in the face of hedge fund activities amplify the chaotic environment that exists in Australian financial markets at present. However and more importantly, it pre-empts the growing risk of a residential property correction. We explain why. (VIEW LINK)