Live Webinar
How to Evaluate a Deal Step-by-Step - Wed 20 Nov @ 8pm AEDT Register Now >>

Property Investment News

Beginner's Guide to Investing in Property - Free Live Event

Government to sell off last of GFC debt


internationalThe last portion of the $15.5 billion of residential mortgage-backed securities the government was left holding after the global financial crisis could by sold off by mid-2016.

"The RMBS market is now functioning well and no longer needs government support," the Treasury said in the budget papers.

"Subject to market conditions, it is estimated that the portfolio could be sold down by the middle of 2016."


The government bought the securities - home loans bundled up to be sold to investors - though the Australian Office of Financial management during the crisis, which reached a head in 2008.

Money markets had become so dysfunctional that originators of the home loans could not find investors in the securities, nor even find the short-term finance to fund the loans.

Rather than see the home loan market outside the major banks collapse, the government stepped in as investor of last resort until the market stabilised.

Improved conditions have since allowed the AOFM to reduce its holdings to less than a third of the original stake.

By April, only $4.6 billion of the securities remained in the AOFM's portfolio.

New Call-to-action

Comments