Finally, some light at the end of the mortgage market tunnel

At last, some rare good news for the housing market. Together, the bank recapitalisation plan and the 0.5% cut in official policy rates suggest that policy makers have now realised that drastic action is required to resolve the current bank crisis. We do not think this changes the outlook for house prices materially, but it at least suggests that tensions in the mortgage market might ease, increasing the supply of mortgages and potentially lifting housing market activity levels at least a little.