Things keep getting tougher

[Rolf Latham]

Hahahah

I cant see my family getting within those numbers in any case.

This isnt average. its the poverty line. So if you are spending twice that a month thats not outreagous

ta
rolf

 

[Rolf Latham]

Marc

Most of the non bank money is securitised and thus usually has LMI coverage at even moderate LVRs.

Usually that means a tougher service models for the non banks because they must usually follow the LMI providers guide

ta
rolf

 

[natedog]

Hey All,

For me, if the tightening credit criteria does delay home ownership for some prospective owner occupiers...they still need somewhere to live dont they?

Rental returns may be boosted by tighter credit as there are more tenants in chasing rental properties, and even compounded by the lower investment by prospective investors not being able to access credit like they once might have, double whammy!!

Rental boom first...then house prices

Cheers,
Nath

 

[BV]

I agree with Josko, Shadow and others that tightening credit is a good thing.

Me too, and we don't want prices to keep going up when we are still in accumulation phase do we?

 

[BayView]

Marc

Most of the non bank money is securitised and thus usually has LMI coverage at even moderate LVRs.

Usually that means a tougher service models for the non banks because they must usually follow the LMI providers guide

ta
rolf

I see. Ta Rolf.

I was just throwing it out there as a scenario.

 

[meljup]

I can never understand why banks use "standard minumums" based on an average of the population. Clearly there is a great variance in how people choose to spend their money.
We don't spend anywhere near the nearly $4000 a month that describes for our family, and frankly it always makes it difficult for us to even get past square one.
In today's world it is very easy to verify how and where you spend your money, and I can't help but wonder why you can't just submit your paperwork to the banks to verify ?
Surely this would be more prudent on the banks behalf ?.
It would certainly show up who is being frugal and sensible and who is not.

 

[Rolf Latham]

Hiya Mel


Doesnt fit sausage factory ...................


ta
rolf

 

[wylie]

Agree totally. We were once knocked back by St George Portfolio Loan because our annual income was $1K less than required by their rigid guidelines, even though it was patently obvious (and we could have proved as you suggest) that we were living on less than their "one income, non-working wife, three kids" guidelines.

Oh well, St George would have made a motza of interest from us, which instead went straight to another bank. Their loss, no loss to us.

 

[Ridin-High]

Obvious answer is Yes, HOWEVER, Australians are an inventive lot.

So we like our houses and the banks want to do low LVRs, so what is the answer/s?

1. Vendor finance for some of the additional deposit required
2. Borrow from solicitors (as in the past)
3. I'm not advocating it (would not do it personally) - do the Rick Otton thing
4. Exploit CC balance tranfers at low rates for long periods.
5. I'm sure there are other creative ppl here who could tink of some more

re point number 4, good in theory but i believe the low IR balace transfers are only for purchases not cash advances and cc reduce burrowing capacity.

 

[Token Funder]

The tighter lending may postpone the next boom for a while, but this is a positive not a negative. Two booms in quick succession would be unhealthy and could leave us in a similar position to the UK or Ireland (where property prices quadrupled in the same 10 years that property prices in Australia only doubled).

The tighter lending criteria is positive because it slows down house price growth, which would otherwise be going through the roof due to the record population increase, historically low interest rates and massive undersupply of property.

The latest statistics from RPData etc show house prices rising moderately, which is a nice sustainable development. It is better to have a few years breathing space with moderate prices rises only. That way we can more easily manage the next boom, which should begin in a few years time.

So, yes, in terms of sustainable growth, the tighter lending is a positive. It is certainly better than prices jumping by 50% in the next two years, which is what would happen otherwise. It just means Australia won't have to experience a large future crash such as occurred in other countries where lending was much looser.

*giggle*

On behalf of lenders across the country, I thank you for your kind words. Obviously, the temptation to simply step aside and let the massive momentum caused by:

- Falling interest rates

- Bearish stock market to drive investors into property

- High overseas immigration

- Trend towards fewer persons per household

- Already very high current pent-up demand for housing

- Not enough new houses being built

- Australian median prices still very low compared to many other countries

- Skyrocketing rents encourage investors back to property

- Banks to promote Shared Equity Mortgages, 40-year Mortgages, Generational Mortgages

- Banks to offer 85% LVR without LMI, as Westpac currently allow (possibly)

- Legislation changes allowing Superannuation to more easily invest in property (possibly)

- Legislation changes allowing negative gearing of PPOR, similar to USA (possibly)

drive moderate growth over 08/09 and an Australia-wide boom thereafter was strong. After all, how could it be stopped?

But we are made of stronger stuff than that and put our noses to the grindstone.

Our collective efforts to delay the next boom until a time for convenient for all have, up until now, gone unnoticed and unappreciated.

It's comforting to know that our good works are being well-received by those in the know.

 

[csc]

*giggle*

On behalf of lenders across the country, I thank you for your kind words. Obviously, the temptation to simply step aside and let the massive momentum caused by:

- Falling interest rates

- Bearish stock market to drive investors into property

- High overseas immigration

- Trend towards fewer persons per household

- Already very high current pent-up demand for housing

- Not enough new houses being built

- Australian median prices still very low compared to many other countries

- Skyrocketing rents encourage investors back to property

- Banks to promote Shared Equity Mortgages, 40-year Mortgages, Generational Mortgages

- Banks to offer 85% LVR without LMI, as Westpac currently allow (possibly)

- Legislation changes allowing Superannuation to more easily invest in property (possibly)

- Legislation changes allowing negative gearing of PPOR, similar to USA (possibly)

drive moderate growth over 08/09 and an Australia-wide boom thereafter was strong. After all, how could it be stopped?

But we are made of stronger stuff than that and put our noses to the grindstone.

Our collective efforts to delay the next boom until a time for convenient for all have, up until now, gone unnoticed and unappreciated.

It's comforting to know that our good works are being well-received by those in the know.

unbelievable if you think that will help the housing market over the next 12-18 mths minimum.

wont make one scarp of difference matey...

you conveniently have left out: the unemployment issue that has yet to bite, oil prices which have pretty much bottomed out and after that inflation, general cost of living which will definitely rear its ugly head and sort of many who have borrowed way too much and wont be able to afford repayments of property both investors and home owners.

the aussie market is far from a safe haven over the next few years i can comfortably say without question.

im yet to see any real sign of investors flocking back anywhere into the market...

please tell me where all these 'in the know" investors are and where they are buying..facts not fiction please?

2013-2014 before the next boom starts in my opinion, until then, downhill then flat before momentum picks up.

the housing market is no different to the stockmarket, it operates and moves up on volume and speculation....all i see currently is a false sense of security with the FHB's grant keeping the bottom end of town steady to slightly up............the rest is r/s overall with a few small pockets still doing ok......

 

[Token Funder]

unbelievable if you think that will help the housing market over the next 12-18 mths minimum.

*snip*

csc,

Your irony-meter is set too low.

TF

 

[Propertunity]

re point number 4, good in theory but i believe the low IR balace transfers are only for purchases not cash advances

Nope - just did one today with ANZ for 7.99% for 6 months.

and cc reduce burrowing capacity.

Not for low-docs they don't

 

[csc]

csc,

Your irony-meter is set too low.

TF

i⋅ro⋅ny
1   /ˈaɪrəni, ˈaɪər-/ Show Spelled Pronunciation [ahy-ruh-nee, ahy-er-] Show IPA
–noun, plural -nies.
1. the use of words to convey a meaning that is the opposite of its literal meaning: the irony of her reply, “How nice!” when I said I had to work all weekend.
2. Literature.
a. a technique of indicating, as through character or plot development, an intention or attitude opposite to that which is actually or ostensibly stated.
b. (esp. in contemporary writing) a manner of organizing a work so as to give full expression to contradictory or complementary impulses, attitudes, etc., esp. as a means of indicating detachment from a subject, theme, or emotion.
3. Socratic irony.
4. dramatic irony.
5. an outcome of events contrary to what was, or might have been, expected.
6. the incongruity of this.
7. an objectively sardonic style of speech or writing.
8. an objectively or humorously sardonic utterance, disposition, quality, etc.

umm! nope not one of those but try this:

re⋅al⋅ist
   /ˈriəlɪst/ Show Spelled Pronunciation [ree-uh-list] Show IPA
–noun
1. a person who tends to view or represent things as they really are.
2. an artist or a writer whose work is characterized by realism.
3. Philosophy. an adherent of realism.
–adjective
4. of or pertaining to realism or to a person who embodies its principles or practices: the realist approach to social ills; realist paintings.

 

[Token Funder]

i⋅ro⋅ny
1   /ˈaɪrəni, ˈaɪər-/ Show Spelled Pronunciation [ahy-ruh-nee, ahy-er-] Show IPA
–noun, plural -nies.
1. the use of words to convey a meaning that is the opposite of its literal meaning: the irony of her reply, “How nice!” when I said I had to work all weekend.
2. Literature.
a. a technique of indicating, as through character or plot development, an intention or attitude opposite to that which is actually or ostensibly stated.
b. (esp. in contemporary writing) a manner of organizing a work so as to give full expression to contradictory or complementary impulses, attitudes, etc., esp. as a means of indicating detachment from a subject, theme, or emotion.
3. Socratic irony.
4. dramatic irony.
5. an outcome of events contrary to what was, or might have been, expected.
6. the incongruity of this.
7. an objectively sardonic style of speech or writing.
8. an objectively or humorously sardonic utterance, disposition, quality, etc.

umm! nope not one of those but try this:

re⋅al⋅ist
   /ˈriəlɪst/ Show Spelled Pronunciation [ree-uh-list] Show IPA
–noun
1. a person who tends to view or represent things as they really are.
2. an artist or a writer whose work is characterized by realism.
3. Philosophy. an adherent of realism.
–adjective
4. of or pertaining to realism or to a person who embodies its principles or practices: the realist approach to social ills; realist paintings.

*sigh*

Do I really need to spell it out?

 

[csc]

by all means if it will put a smile on that face!

not a good look!!

 

[Token Funder]

by all means if it will put a smile on that face!

not a good look!!

Obviously, if I have to explain a joke it wasn't told well enough

My good friend Shadow's most recent argument for the further delay in the appearance of his regularly predicted MOTHER OF ALL BOOMS is that the tighter lending criteria applied by we lenders has slowed

down house price growth, which would otherwise be going through the roof due to the record population increase, historically low interest rates and massive undersupply of property.

I was particularly amused given that over a year ago I kept suggesting the (then) financial crisis - now an economic crisis - was creating credit restrictions that would limit the available credit in Oz and was therefore a negative insofar as asset appreciation was concerned. As usual, the responses were in the traditional form:

*it's different here
*a list

The list in my post was Shadow's from that time.

I'm disappointed to think you beleive that they were my points

 

[HiEquity]

I'm disappointed to think you beleive that they were my points

It's alright, some of us got the joke!

I believe sarcasm would have been a better definition for your post - that may have been the source of the confusion...

From here:Sarcasm:

Sarcasm is a form of irony that is bitter or cutting, being intended to taunt its target.

If you had described it that way, I'm sure everyone would have understood!

 

[Land]

the housing market is no different to the stockmarket, it operates and moves up on volume and speculation....all i see currently is a false sense of security with the FHB's grant keeping the bottom end of town steady to slightly up............the rest is r/s overall with a few small pockets still doing ok......

You don't seriously beleive that the housing market is no different to the stockmarket do you??! How about the fact that 70% is owner occupied, and of those, approximately half don't have any debt. The housing market is a completely different beast.....

 

[kotim]

if your looking for capital growth, the only place to be is in shares, the only way this won't be true is if we expereicne a long term _read 4-7 years sideways market. Something like what happened after 1987-1989. We still in most major cities have near record high house prices minus a few measley percent or buy a sharemarekt that is at half its high.

Barring an extrmely deep recession/depression the sharemarket will substantially outperform property.