Perth housing crash

[Lach72]

http://www.watoday.com.au/wa-news/f...or-perth-property-buyers-20161227-gtiduo.html

 

[Scotland]

 

[Power Raid]

Down 4.3% last year according to sunrise.

It will be interesting to see the effect of the increased first home owners

 

[Happy Mastenator]

The worst thing Freo have done is allowed Notre Dame to buy up so much real estate.

I graduated from ND in 2004. If ND hadn't come along to that end of Freo, the entire end would have died. It was a hole, the influx of spending from the Uni and it's students bought a lot of life to the area.

I'm not sure what the status is now, as have only been back briefly last year to show the wife around, but as another poster said, what would be down there now if not for the Uni?

 

[Power Raid]

I graduated from ND in 2004. If ND hadn't come along to that end of Freo, the entire end would have died. It was a hole, the influx of spending from the Uni and it's students bought a lot of life to the area.

I'm not sure what the status is now, as have only been back briefly last year to show the wife around, but as another poster said, what would be down there now if not for the Uni?

The uni has been a short term savior but a long term curse.

I'm not sure what can be done to turn things around now. Perhaps closing off some streets and having street festivals to encourage people to wander and spend.

 

[Upgrayedd]

I agree with limiting urban sprawl

but rather than a blanket "stop" we should promote quality development and better still promote building a second and third large city in WA. Infill between Bunbury and Busselton would soon create a city with critical mass warranting major infrastructure.


I'd hate the idea of crappy high density developments with 30-50m2 apartments and would take up arms when we start having toilets in the kitchen.

this is where we are headed unless we refocus on nation building rather than pork barrelling major CBD centres

Quietly i think thats happening

Bunbury is still the meth capital of W.A. and generally australia. However last 5 years its livability has drasticly changed and while yeah it could use a bit more investment we'll hit a tipping point in 20 or so years

 

[chargers 09]

When I first started looking at houses seriously interest rates were about 5% for an introductory rate. I looking at units around the $300k mark hoping to borrow around 90%. Banks were willing to lend me double what I wanted. Or more. I worked it out once that at the salary I was earning when I applied for the loan, the maximum amount I could have borrowed and the peak interest rate (just since I got the loan, not all time) my interest repayments would've taken up 70% of my after-tax income. That's absurd. Particularly considering rates peaked just under 7% for me and were pushing 9% a year or two earlier let alone the bad old days of double figures.

The whole 'property always goes up' thing only works if there is turnover. It's all well and good having a 2 bed fibro shack worth $3m but if not one can afford to buy it then it has no liquid value. This century we've had economic prosperity leading to rising incomes, low borrowing rates and relaxed lending criteria. When prices keep going up equity is created out of nothing. LVR of 100%? No worries, the value will go up 10% in a few months and you'll be down to 91%. Investors like this, banks like this, governments like this. The only people that don't are the people saving and watching their deposits being eroded away by inflation.

The problem is, there is a practical limit to how high prices can rise and how much turnover there can be. Otherwise prices would still be rising, houses would be turning over like burger patties and the median income to median price ratio would be pushing 10, 15, 20 and beyond. The govt puppetmasters are almost of out tricks, too. Our wages are high globally, our prices are high globally, our rates are low. The last trick left is to just let more people in to put pressure on supply while not investing in necessary infrastructure. Ugh.

It was a different era but my old man bought a unit for $11k. He had to front up $2k as a deposit and even then he was seen as a risk and the bank wouldn't give him a loan so he had to go to a credit society. Could you imagine someone walking into a bank today with a 20% deposit and being turned away?

Yes- unstable employment, poor credit file (I.e. Financial defaults or too many enquiries/applications.)


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[chargers 09]

An argument could be made that the profits of the banks are heavily subsidised so they do have an obligation to society via the social contract.

They would ignore that argument of course, but it could be made.

That said a far more pratical approach is to simpky default on the loan and tell the bank to go **** themselves if they try to repossess it. Its actually very difficult legally to repo a property that is a primary residence. And then theres the PR nightmare if you even pull it off.

Wow, I've heard some dumb s**t on Bigfooty but this takes the cake. You are effectively stealing money off a creditor if you don't' pay off the loan- people who have this mentality are the reasons banks can include risk fees and equalisation fees into the finance.
Furthermore what if you default on the mortgage and want to apply for finance in the future? Good luck ever going back to that financier and applying for a loan in The short term. What happens if the default becomes a judgement and they take you to court over the debt?
What a terrible mentality to have- "oh, I'll take their money and never pay back the loan".
You are wrong if you think they can't re-Po a house. In the right circumstances a sherif will come to your property and give you a 90 day notice. Or as I said issue a court judgement that goes on your credit file and the consequences that come with it.


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[VineyIsLORD]

Wow, I've heard some dumb s**t on Bigfooty but this takes the cake. You are effectively stealing money off a creditor if you don't' pay off the loan- people who have this mentality are the reasons banks can include risk fees and equalisation fees into the finance.
Furthermore what if you default on the mortgage and want to apply for finance in the future? Good luck ever going back to that financier and applying for a loan in The short term. What happens if the default becomes a judgement and they take you to court over the debt?
What a terrible mentality to have- "oh, I'll take their money and never pay back the loan".
You are wrong if you think they can't re-Po a house. In the right circumstances a sherif will come to your property and give you a 90 day notice. Or as I said issue a court judgement that goes on your credit file and the consequences that come with it.


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Are you completely unfamiliar with how loans work? There is always risk that the person you lend to wont pay it back, its part of doing business.

The banks just havent had to worry about it lately because the governments keep bailing them out for their shitty investments.

 

[Power Raid]

Are you completely unfamiliar with how loans work? There is always risk that the person you lend to wont pay it back, its part of doing business.

The banks just havent had to worry about it lately because the governments keep bailing them out for their shitty investments.

a bank loan is so cheap, it really isn't commercial. If it were commercial, there would be no banks as people would lend to people rather than people lending to banks to lend to people.

The reason why bank loans are so cheap, is the risk weighting is low due to government protections of banks.

Read Paul Keating's view on banks......very socialistic and sensible

 

[chargers 09]

Are you completely unfamiliar with how loans work? There is always risk that the person you lend to wont pay it back, its part of doing business.

The banks just havent had to worry about it lately because the governments keep bailing them out for their shitty investments.

I am a broker and write loans for a living, so yes I know more about lending than someone who has read a few lending reviews on Canstar.

I think it is very irresponsible to be posting things like "default on your mortgage".

Fwiw I appreciate some of your posts I.e. On the Phillipines. But please don't post some of the nonsense you did earlier, you are out of your depth in that regard all due respect.

Furthermore, I have refinanced a home where the sherrif's department was days away from re-possesing the house. The financier was St. George. If the client didn't have as much equity in the property as they did, the house would have been re-possessed. Simple as that.


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[Scotland]

I am a broker and write loans for a living, so yes I know more about lending than someone who has read a few lending reviews on Canstar.

I think it is very irresponsible to be posting things like "default on your mortgage".

Fwiw I appreciate some of your posts I.e. On the Phillipines. But please don't post some of the nonsense you did earlier, you are out of your depth in that regard all due respect.

Furthermore, I have refinanced a home where the sherrif's department was days away from re-possesing the house. The financier was St. George. If the client didn't have as much equity in the property as they did, the house would have been re-possessed. Simple as that.

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That's because:

Its more a case of consumers being aware of their rights.

There's a reason its difficult for banks to seize the family home.

If banks want to take the good parts of socialism (i.e. the bank guarantees, four pillars etc) they will need to contribute if times get tough. Failing that, organised sit ins work.

Apparently...

 

[VineyIsLORD]

I am a broker and write loans for a living, so yes I know more about lending than someone who has read a few lending reviews on Canstar.

I think it is very irresponsible to be posting things like "default on your mortgage".

Fwiw I appreciate some of your posts I.e. On the Phillipines. But please don't post some of the nonsense you did earlier, you are out of your depth in that regard all due respect.

Furthermore, I have refinanced a home where the sherrif's department was days away from re-possesing the house. The financier was St. George. If the client didn't have as much equity in the property as they did, the house would have been re-possessed. Simple as that.


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You have no idea of my career history.

Congrats on your job as a salesman.

 

[chargers 09]

You have no idea of my career history.

Congrats on your job as a salesman.

Of course Brokering is effectively a sales based job just like most jobs in finance which have KPI's and bonuses. However I am happy to be a "salesman" in my industry with the knowledge that brokers are expected to write 70% of 2017's mortgage loans
I wasn't tooting my own horn, but consumer finance is my bread and butter. And that sort of advice is irresponsible to be spouting on an online forum.

Nor do you know my qualifications or credentials.



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[chargers 09]

That's because:



Apparently...

What would I know...


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[VineyIsLORD]

Of course Brokering is effectively a sales based job just like most jobs in finance which have KPI's and bonuses. However I am happy to be a "salesman" in my industry with the knowledge that brokers are expected to write 70% of 2017's mortgage loans
I wasn't tooting my own horn, but consumer finance is my bread and butter. And that sort of advice is irresponsible to be spouting on an online forum.

Nor do you know my qualifications or credentials.



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I was a broker at 18 years old with no education.

I also worked in collections/credit shortly after that. Repossessing the family home is very difficult for any institution. Unless things have changed dramatically since I left the industry in 2008.

Feel free to explain what happened in your example from your previous post. I.e. why didnt you end up repossessing the home... and was it the only property they owned and their primary residence?

And if we want to talk irresponsible i would say Australian bank lending practices take the cake there. A little bit of advice on how to approach a mortgage distress situation isnt going to hurt anyone.

 

[chargers 09]

Things have tightened up since 2010 especially with the introduction of the NCCP- (National Credit Consumer Credit Protection Act.)
No was a resi property. Will go into details this evening.
FTR- I agree banks in Austalia need to improve their lending practices, some of the loans ice seen given out are truly head scratches to young 20 year olds ect.
Commercial lending which isn't covered under the NCCP is where you see some "interesting" deals happen.
On topic of irresponsible lending- Alphera (BMW finance arm) were just fined $80 million for breaching the credit act.


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[Happy Mastenator]

Lending has tightened considerably in the last few years, the days of 105% loans are long gone, you need the full deposit amount or a guarantoor from family, otherwise good luck.

 

[Jimmy_the_Gent]

Lending has tightened considerably in the last few years, the days of 105% loans are long gone, you need the full deposit amount or a guarantoor from family, otherwise good luck.

Are 90% loans still a thing?

 

[Happy Mastenator]

Are 90% loans still a thing?

A couple of professions can get 90% loans (lawyers for example), with some banks, anyone else would need to have LMI if they had less that 20% deposit

 

[Jimmy_the_Gent]

A couple of professions can get 90% loans (lawyers for example), with some banks, anyone else would need to have LMI if they had less that 20% deposit

I would have thought the most common loan was between 10% and 20% deposit + some LMI. Is that not right?

 

[Scotland]

90% loans are definitely still a thing.

Banks are typically offering something like 4% for LVR < 80% and 4.1% for LVR 80-90%. If it's for investment purposes then more like 4.4% and 4.6%.

I refinanced late last year and it was a 'through broker, LVR <80 only' type deal.

I'm staggered how few *s banks give about existing customers. Spend so much time trying to attract new ones that customers just cycle between them looking for the best deal.

 

[Happy Mastenator]

I would have thought the most common loan was between 10% and 20% deposit + some LMI. Is that not right?

Don't know, I'm only going off my experience (we're settling on our first home in a couple of weeks).

I imagine that a lot would be in that zone somewhere though, and either paying LMI or using equity in parents house as a guarantee for the rest to avoid LMI.

 

[chargers 09]

I was a broker at 18 years old with no education.

I also worked in collections/credit shortly after that. Repossessing the family home is very difficult for any institution. Unless things have changed dramatically since I left the industry in 2008.

Feel free to explain what happened in your example from your previous post. I.e. why didnt you end up repossessing the home... and was it the only property they owned and their primary residence?

And if we want to talk irresponsible i would say Australian bank lending practices take the cake there. A little bit of advice on how to approach a mortgage distress situation isnt going to hurt anyone.

Long story short, I will be paraphrasing most of this as it was close to 18 months ago.
Customer (tradesman) was a contractor and hadn't been paid the full amount from a "large" job he worked on and was going through a bad "break up".
When he came to us hasn't made a repayment for close to 6-9 months. Can't remember exactly but I think it was closer to 9 months.
He applied for financial hardship, but still couldn't keep up for various reasons.
After not making repayments after applying for financial hardship eventually the sheriff gave him a 90 day warning (close to 80% sure it was a 90 day warning otherwise it was even less than that)
When he came to us he had to the end of the week to show the sheriff an approval and letter from a financier, we were able to obtain an approval purely due to the large equity he had in the property.

I've skipped out a few parts here, but the main pint is that the banks will re-po
a property. Agreed that is is reluctant and a large process especially if the property is a residential one.



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[YippeeYiYeo]

Lending has tightened considerably in the last few years, the days of 105% loans are long gone, you need the full deposit amount or a guarantoor from family, otherwise good luck.

Keystart offer 95% loans.