What drives the performance of RMBS? Do house prices matter?
Fact: even during the market volatility experienced in 2018 and the falling house prices - the values of GCI investments were rock solid.
The portfolio has performed exactly as forecast, never falling below its $2 issue price and delivering low volatility and sustainable monthly income.
This raises the question - what drives RMBS?
2 things:
IMF stress test (Feb 2019) of the Australian Major Banks concluded unemployment is the most important driver of performance of home loans.
Click here to view the Gryphon Stress Test >
House prices are important for the 'wealth' effect and government coffers BUT they have a second order impact on borrowers capacity to pay their mortgage.
See below links for more information on:
