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This doesn't make sense, homeowners aren't setting prices, sellers and buyers are. Buyers have access to lower interest rates via fixed and variable loans. Both are lower than they were a year ago.
The ability of banks to pass on rate cuts isn't what I was commenting on, neither was the original article.
I'm just saying that credit card rates and business rates haven't been reduced as much as residential mortgages. The banks are keeping up their margins one way or another.
Credit cards have always been seen as expensive credit as it is an unsecured loan, nothing new there.
I am surprised they have dropped at all.
Are you certain business credit wont be reduced? I seem to remember it was last cycle, why do you think it wont this time.
Dave
If you are only allowed to sell something that you own.... and you are selling a house... does that by default not make you a homeowner who is also a seller
Either way a healthy banking system that is ready to lend is critical to house prices and we are one of the few western countries who have this, so I don't begrudge banks for their profit...
Yep, but how does having a fixed rate affect your decision to expect/accept a lower or higher price? If rates are falling, the person buying your house will have access to cheaper credit (whether it be fixed or variable). As a vendor, I'd be expecting them to pay more if their money is getting cheaper.
If I'm selling because I've lost my job and my interest rate hasn't moved because I'm on a fixed loan, the issue isn't the fixed loan, its losing my job. Mr Brooks is still off the mark.
Being on a fixed rate in the US doesn't have the same implications are here. The sort of economic loss provisions that lock people in here in Oz don't exist under the US funding regime.
You can jump in and out of a fixed rate as easily as a variable one. It's one of the reasons fixed rates are so popular over there.
Nope. He is right on the mark. If you're fixed at 8%, and you can just barely cover the repayments, and then you lose your overtime, or take a paycut or your partner loses her job, or meet with an unexpected medical expense... then you're in trouble.
No you're not, you refinance at a lower rate, because you can do that in the US, as long as the banks are still lending and passing on the lower rate.
Dave,
For me its a case of "No news there"... I've been arguing for a while its different over here and its only been the perma-bears who've hung tenaciously to their forlorn hope of rapid house price falls that have been arguing its all the same the world over. It really is a different property market based on completely different fundamentals to the US, UK, Spain etc so cannot be tarred with the same brush.
Thanks for the link though. Good to see the IMF is now on the side of the "not going to crash" crowd. That's one less source the perma-bears can quote now. We'll whittle them down one analyst / international body at a time...
Cheers,
Michael
I'm sorry that the 40-50% residential property collapse in 2009/2010
Oh - it's been moved out to 2010 now. When did that happen?
Hi Michael as one of the crash crowd I had a real giggle when I saw the IMF agrees with the likes of the blue sky brigade. Old George Soros has been betting against them for decades and has made his fortune giving their forcasts the proverbial thumb on the nose and fingers wiggling.
I'm sorry that the 40-50% residential property collapse in 2009/2010 is going to impact so hard of many of the posters on this site. However I will take great pleasure seeing those "experts" at the IMF yet again shown to have clay feet and no clothes. If you have seen poor sparkey's post about her LOC being called in by the nab you can get a taste of what is coming. If your LVR's are over 30% your in trouble.
Hi Michael as one of the crash crowd I had a real giggle when I saw the IMF agrees with the likes of the blue sky brigade. Old George Soros has been betting against them for decades and has made his fortune giving their forcasts the proverbial thumb on the nose and fingers wiggling.
I'm sorry that the 40-50% residential property collapse in 2009/2010 is going to impact so hard of many of the posters on this site. However I will take great pleasure seeing those "experts" at the IMF yet again shown to have clay feet and no clothes. If you have seen poor sparkey's post about her LOC being called in by the nab you can get a taste of what is coming. If your LVR's are over 30% your in trouble.
the impact of such an event would be way beyond just the posters on this site. the construction industry and all support industry would shut down and would take an eternity to recover. the strangle on property supply would see rents triple, quadruple... who knows where that would stop. at least rent would finally reflect the value of consumption that it should. interest rates would be at near 0% and the value of the dollar would be negligible so the cost of everything would triple at least and fuel would follow suit. the social upheaval would be immense as unemployment goes way up into double figures. i think that's a depression, isn't it? either way - no one would be want this scenario, therefore preparing for it is folly.
it could happen. the result would possibly see a civil war, WA would no doubt break away from the federation and after a few decades of pain we may see Australia split up into the 20 or so countries that it should be. don't get me started on secession - that argument is as old in my family as the first world war. i'm all for it - lets see how Canberra holds up without WA...
the vaccuum created bythe collapse of the US may be the catalyst. It will just be interesting to see if Oz can survive the after math of mass illegal immigration and invasion that would follow. What are the thoughts of Chinese invasion? they have the military and numbers to do it. Aus would make a great input for complete vertical integration and it makes a lot of sense for them to do it. i'm looking forward to seeing this Taiwanese independance thingo blow over. If the US help Taiwan gain independance from China, we will all be drafted into the war to end all wars. they'd take Singapore first though, so i guess we've all got SOME time to jump on a boat to Hawaii.
He knocked his wife upI’m intrigued. Can I ask what motivated you to buy recently – given those dire expectations?