Statement by Glenn Stevens - Reserve bank

[AUSPROP...]

I get the feeling that the effectiveness of the (extra) grant was done-and-dusted anyway. Reason being that the banks have lowered LVRs and tightened credit for new loans in recent weeks to limit their exposure to FHBs on the edge.

plus most new stock should be sold by now and the house/land sales will take a year or so to deliver. better bang for buck elsewhere.

 

[BayView]

Considering the money that's been lent out to FHO's, with almost no assets and a deposit based on a government subsidy, have the lending practices really been that different?

We are about to find out I suppose.


Still can't believe the grant is going.


See ya's.

Agree, TC.

And we are about to find out just how solid the property market is after the FHB's disappear into consumerism heaven shortly.

Honestly, what % of the population (especially FHB's) have been diligently saving money towards a deposit, or reducing debt over the last 5, 10 years?

With the Banks being gun-shy, and only lending on "normal" practices, there'll be bugger-all people swanning around who can buy anything.

Maybe a few empty-nesters and a few cashed-up investors and the odd PPoR home-owner with no mortgage who wants an upgrade.

The rates will need to drop to bugger-all, and/or the Banks will need to dream up another creative lending product to keep the whole thing afloat.

Hey; do I sound like a bear??

Nah; think 10 year windows boys and girls - good time to go shopping.

 

[ffc1883_1996]

I think Ausprop makes a very good point. The (extra) grant was probably quite effective at clearing out many of the borderline development projects that got the go-ahead during the good times. Property prices will now have to stand up on their own – without the boost – but without the weight of speculative new builds.

Drifting off topic from original RBA rant – sorry.