Society/Culture Australian Property Prices to Crash?

Remove this Banner Ad

Madas

Club Legend
Aug 16, 2020
1,769
2,406
AFL Club
Fremantle
Retzlaff zlaff said it best.



New cars are on 6m back order, so people have time to refinance their homes to release the equity - equivalent of 2% car loans. I can only hope they choose to pay back at a rate to clear loans in the 3-5yr they would otherwise be.

Car Loan finance (Credit Cards, etc) appear ridiculously easy to get.
In Geelong I go to the boat launching pads generally Limeburners and Clifton springs.
The amount of 40 yo boys with 65,000 fwd,s and 70,000 dollar boats is amazing. Then there wife rolls into carport with the ubiquitous 50,000 BMW never driver on dirt 4wd is gobsmacking.
Nephew of mine actually tried to justify it, to no avail.
The price will have to be paid, and only a financial reset will do it.
My 19 year old watches a lot of these peanuts on social media , guys with fishing shows , surfing , rock fishing , four wheel driving , camping ....... you name it , some peanut is out there filming himself living some amazing lifestyle whilst flogging it to the masses .
Despite mine and the missus best efforts to teach our kids the value of hard work and a steady income, I can’t help but think these kids look at these β€œ influencers β€œ and think that’s normal. Time will tell .
Surely unsustainable?
 

HirdsTheWord

πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†
Jun 19, 2014
7,788
8,703
AFL Club
Essendon
Other Teams
New York Rangers
I can't for the life of me work out how properties around the $2-3 million dollar mark are getting changed over (sold) so quickly. I'd like to think its not FHO buying them, but unless you have serious equity how do you afford the 6-10k a month mortgage even at current low rates.
Equity, both in existing homes and investor homes.

But the average Australian Mortgage has also jumped almost 30% - within the space of 12 months. Which is utterly insane when you consider there has not been a wage increase for 5 + years, and likely to one anytime soon. So people are obviously willing to go further and further into debt.

There are numerous terrible reasons why the market is doing what its doing, most of which been mentioned to death in this thread, its at a point now when the damage is done. By doing nothing the RBA + Governments have created a machine they cant properly fix without causing economic ruin.

This is what you get when successive governments (both state & federal) have ZERO long term planning for housing.
 

HirdsTheWord

πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†
Jun 19, 2014
7,788
8,703
AFL Club
Essendon
Other Teams
New York Rangers
The first move in interest rates:
APRA tightens home loan rules, raises interest rate benchmark

The banking regulator has announced tougher serviceability tests for home loans, which will make it harder for some borrowers to get a mortgage.

The Australian Prudential Regulation Authority (APRA) has increased the minimum interest rate buffer on home loan applications from 2.5 to 3 per cent.

This means that banks will have to test whether new borrowers can still afford their mortgage repayments if home loan interest rates rose to be 3 percentage points above their current rate.
It's a wet lettuce leaf but at least they are starting to actually control what's going on, these kind of steps should have been taken after the 1st QTR of 2021. Still, its no substitute for proper long term planning.

Its an absolute disgrace that it took comments from a Bank CEO (you know the guys who actually make more money the more prices go up) for this process to start.

If this doesn't show you the real agendas of the people running the show than nothing will. All Gov Ministers + RBA care about is lining their own pockets with their own investment property portfolios.

Now that USA inflation concerns are staring to ramp up (currently highest levels in 13 years) it will be very interesting to see what that means for us.
 
Last edited:

Log in to remove this ad.

Simon_Nesbit

Brownlow Medallist
Sep 26, 2001
11,157
6,765
Tasmania
AFL Club
Hawthorn
It's a wet lettuce leaf but at least they are starting to actually control what's going on, these kind of steps should have been taken after the 1st QTR of 2021. Still, its no substitute for proper long term planning.

Its an absolute disgrace that it took comments from a Bank CEO (you know the guys who actually make more money the more prices go up) for this process to start.

If this doesn't show you the real agendas of the people running the show than nothing will. All Gov Ministers + RBA care about is lining their own pockets with their own investment property portfolios.

Now that USA inflation concerns are staring to ramp up (currently highest levels in 13 years) it will be very interesting to see what that means for us.
"Mortgage Prisoners"

Who benefits the most when you are unable to refinance your mortgage to a new lender? The existing lender who can now raise interest rates without risk of refinance.

Which bank has the largest % of FHB?

Which lender had "market leading" 2yr fixed rates expiring in 2020, due for large rate increases on expiry in 2022?

Which bank wants to restrict the ability of their customers to refinance to better options, now that LMI is no longer a concern?

Which Bank, indeed.
 

Kwality

Hall of Famer
Aug 14, 2011
34,825
12,988
Trafalgar
AFL Club
West Coast
Other Teams
Mclaren Mercedes F1
"Mortgage Prisoners"

Who benefits the most when you are unable to refinance your mortgage to a new lender? The existing lender who can now raise interest rates without risk of refinance.

Which bank has the largest % of FHB?

Which lender had "market leading" 2yr fixed rates expiring in 2020, due for large rate increases on expiry in 2022?

Which bank wants to restrict the ability of their customers to refinance to better options, now that LMI is no longer a concern?

Which Bank, indeed.
FHB means?
LMI ?

Pardon my ignorance.
 

Bombermania

Brownlow Medallist
Dec 18, 2007
10,046
5,745
Counting premiership cups
AFL Club
Essendon
Other Teams
Non that play Essendon
My 19 year old watches a lot of these peanuts on social media , guys with fishing shows , surfing , rock fishing , four wheel driving , camping ....... you name it , some peanut is out there filming himself living some amazing lifestyle whilst flogging it to the masses .
Despite mine and the missus best efforts to teach our kids the value of hard work and a steady income, I can’t help but think these kids look at these β€œ influencers β€œ and think that’s normal. Time will tell .
Surely unsustainable?
In many cases the fancy toys are leased.
 

HirdsTheWord

πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†
Jun 19, 2014
7,788
8,703
AFL Club
Essendon
Other Teams
New York Rangers
"Mortgage Prisoners"

Who benefits the most when you are unable to refinance your mortgage to a new lender? The existing lender who can now raise interest rates without risk of refinance.

Which bank has the largest % of FHB?

Which lender had "market leading" 2yr fixed rates expiring in 2020, due for large rate increases on expiry in 2022?

Which bank wants to restrict the ability of their customers to refinance to better options, now that LMI is no longer a concern?

Which Bank, indeed.
no doubt the CBA has a motive.

Doesn't change the fact its ******* disgusting that Government and Regulators have done sweet fu** all until a bank says so.
 

hamohawk1

Premiership Player
Feb 18, 2011
3,949
3,875
AFL Club
Hawthorn
Come up with 5% deposit (or 3.5% if you're Indigenous) and the Government will put up 25% in return for equity.


Thoughts?
If the government (state or fed) really cared about the 'affordability' they wouldn't introduce these schemes. All it does is further inflate the market, and prices infinite more people out than it serves.

But governments are hooked on the money realestate brings i.e. stamp duty
 

(Log in to remove this ad.)

Gigantic

Brownlow Medallist
Aug 31, 2014
11,121
13,808
Sydney
AFL Club
GWS
Other Teams
Rabbitohs, LFC, PHX
β€œWe are not putting more money into people’s pockets, in effect what we are doing is giving them the opportunity to participate in a competitive market,” he said.

Not sure how this solves the issue. More participants in an already competitive market?
 

Gigantic

Brownlow Medallist
Aug 31, 2014
11,121
13,808
Sydney
AFL Club
GWS
Other Teams
Rabbitohs, LFC, PHX
For the 3,000 people who can access this scheme, it may work well for them - if they can service the mortgage.

For everyone else, they're left to compete in an even more competitive market.

Real estate agents and property developers are licking their lips.
 

Jimmy_the_Gent

Brownlow Medallist
Dec 25, 2004
15,838
8,691
Perth
AFL Club
West Coast
Been happening in WA for decades. Google keystart shared equity scheme.

Government makes good money off it as they own a part of the house. Low income earners get onto the property ladder.
 

HirdsTheWord

πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†
Jun 19, 2014
7,788
8,703
AFL Club
Essendon
Other Teams
New York Rangers
the RBA really have lost the fu**in plot.


RBA: WARNING!! The Housing Market is Overheating!

EVERYONE: Yes, because you're keeping interest rates at zero........

RBA: Yes but WARNING!! The Housing Market is Overheating!
 

Mindtraveller

Club Legend
Feb 3, 2010
1,902
1,537
Melbourne
AFL Club
St Kilda
the RBA really have lost the fu**in plot.


RBA: WARNING!! The Housing Market is Overheating!

EVERYONE: Yes, because you're keeping interest rates at zero........

RBA: Yes but WARNING!! The Housing Market is Overheating!
So the APRA tells banks to assess all loans assuming a higher interest rate, can someone explain why the RBA couldn't also start increasing the interest rate too? They're a bit sh*t at there job if there forecast is 2024
 

HirdsTheWord

πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†πŸ†
Jun 19, 2014
7,788
8,703
AFL Club
Essendon
Other Teams
New York Rangers
So the APRA tells banks to assess all loans assuming a higher interest rate, can someone explain why the RBA couldn't also start increasing the interest rate too? They're a bit sh*t at there job if there forecast is 2024
because we are in economic turmoil they reckon.

How the fu** do housing prices rising 20% show we are in economic turmoil? If anything everyone seems to be doing pretty damn well economically.
 

Gigantic

Brownlow Medallist
Aug 31, 2014
11,121
13,808
Sydney
AFL Club
GWS
Other Teams
Rabbitohs, LFC, PHX
Been happening in WA for decades. Google keystart shared equity scheme.

Government makes good money off it as they own a part of the house. Low income earners get onto the property ladder.
Is it a good thing though?

When your scheme targets 3000 purchasers, it isn't exactly doing much to curb the problem that's seemingly affecting a larger cohort of the population.

And when 60% of members of parliament own an investment property - it's good the government itself now has skin in the game to ensure the property market continues to be properly stimulated so they can at the very least get their money back and some.

Forget about investing in businesses - let's take some money out of the real economy and pump it into unproductive assets.
 

Jimmy_the_Gent

Brownlow Medallist
Dec 25, 2004
15,838
8,691
Perth
AFL Club
West Coast
Is it a good thing though?

When your scheme targets 3000 purchasers, it isn't exactly doing much to curb the problem that's seemingly affecting a larger cohort of the population.

And when 60% of members of parliament own an investment property - it's good the government itself now has skin in the game to ensure the property market continues to be properly stimulated so they can at the very least get their money back and some.

Forget about investing in businesses - let's take some money out of the real economy and pump it into unproductive assets.
I understand what you think would be the ideal situation for housing in Australia. This scheme might not fit with that but it works/helps in reality.
 

mattf83

Premiership Player
Feb 9, 2007
4,282
3,084
Sydney
AFL Club
Sydney
I think the RBA is waiting for the economy to open and some serious spending to help kickstart it. This may naturally accelerate the need for an interest rate rise.

If they go too soon, they might stifle consumer confidence.
 

Remove this Banner Ad

Remove this Banner Ad