Where's The Pain?

[sailor]

Repossesions in Qld are increasing according to this mornings Courier Mail:

"Justice Department figures reveal property repossessions have spiked 109 per cent in the past four years as the monthly repayment on the average home loan rose from $1737 in 2004 to $2067 today."
http://www.news.com.au/couriermail/story/0,20797,23220730-3102,00.html?from=public_rss

 

[alexlee]

Percentage moves can be misleading if it starts from a low base.
Alex

 

[sailor]

Percentage moves can be misleading if it starts from a low base.
Alex

Sorry Alex...Here's some more recent figures:

"Foreclosure rates, or repossessions as they are called in Australia, have been on the rise and higher interest rate rises are likely to make matters worse.

Figures from the Reserve Bank of Australia (RBA) show there were 5,368 applications for repossession in NSW in 2006, equivalent to 0.23 per cent of the number of private dwellings in the state, with 3,642 writs of possession granted.

The ratio of writs to applications - at around two thirds - was higher than in the previous two years and was higher again for the first eight months of 2007, the RBA said."
http://news.smh.com.au/house-repossessions-on-the-rise/20080215-1sh8.html

...and since the first 8 months of 2007 we've had more interest rate rises. So I'm just wondering if the writing is on the wall....

 

[see_change]

On friend works for one of the largest insurance companies and they're having trouble raising finance for expansion due to the credit crunch I'm assuming that's going to work though much of the business world , unless you were smart like Lowy who already has his war chest packed with goodies.

Cliff

 

[Andrew_A]

A snippet. Yesterday when banking a cheque the teller asked me would I like to increase the credit limit on my visa card, I can't remember hearing that question before from my bank. Can't quite work out if that means anything or not.

Seems like there might be some pain filtering through, haven't seen it yet in property prices in my patch though.

 

[BayView]

Hi
Is there another way of curbing inflation? Perhaps a major recession by a major importing country will lead to a slow down in growth for a major exporting country?
All the best.
Daniel Lee

If you believe what we read that the Country is so hooked on credit to fund their lifestyle, then you would assume that it has to be made harder for everyone to get credit/finance (credit cards, car loans etc) to have an effect on spending.

While the market place for consumer credit providers is so competitive and so lucrative, I'd say this won't happen anytime soon; especially when they offer you a limit increase over the counter at your local Bank like Andrew_A got.

"Would you like a $10k limit increase and some fries with that?"

 

[want2bewealthy]

I sorta knew that rates were really good about a year ago when I bought my first so I fixed for 5 years, my broker even told me to take advantage of it,

The offset was I bought at the top of the boom... :[
It rents well though and is nearly cashflow positive so Im o.k with that.

Im waiting for the slump market to buy more and saving in the mean time.

 

[Andrew_A]

+0.4% .. cripes

I found the pain, it's my blood on the floor!

Still.. I'm staying 100% variable in my rates for the moment, will be watching the April Fools day meeting of the RBA (hiking 2% surprise!) and the CPI figures like a hawk now. I have been criminally negligent in my education in this area and have just been catching up fast recently, I remember listening to plenty of rate fixing talk in 2005/2006 but didn't have the nescessary smarts/experience to process it from the paper of my journal through my skull and acting on it.

Have been playing with the data and working out some systems for the future for IR's and when to fix in a cycle and when not to. One interesting thing is the spread between the 90 day bills and the cash rate is the highest it's been since 1996. So reading between the lines it seems the RBA is actually already being dovish in their moves as they seem to be Nazi's when it comes to inflation.

It's all made me very cautious, I really think this is a crap time to be fixing but haven't been able to quantify the amount of hope in that sentiment before, CPI, RBA minutes and bank bills are now my on my breakfast reading list. I think it's a tough choice but will turn around 180% and fix some of my debt if I don't see some give in the next month I'm thinking at the moment.