I just love the way you guys keep going on about the US market...where they have in excess of a million surplus houses...and NINJA loans....
in fact I would love for you to go over there and buy some of those cheap houses...you know the ones for $1000, and then pay the govt about $8000 in taxes a year...where the neighbours have ripped out all the copper and anything else thats worth 2 cents...
or the mansions...for 100k's....and loving the neighbourhood's they are in...
As much as you would like to think that Aus is somehow economically divorced from the USA, and the rest of the world for that matter, there is no such thing as a free lunch. The global competition for stimulis debt is going to force rates up eventually. Australians have never had it so good; just a pity that KRudd has 'sold us forward' in order to achieve this?
I'd be interested to see this chart continued for 2008 - any chance?
Cheers
PS: One final question; UF in your chart how is "Household Disposable Income" defined? Does that have living expenses + taxation taken out or just tax? Given that mortgage payments are such a large portion of living expenses, I hope it is simply after tax household income, otherwise it's a pretty useless stat really?
Cheers,
Beej
Oh look here is a graph of the serviceability:
(Looks like that's where UFs chart came from as well - http://www.whocrashedtheeconomy.com/?page_id=3). Of course they stop this chart at the end of 2007 as well. Given that interest rates have dropped by 40%, and it is unlikely that total household debt has increased since then (it's probably gone down a bit), that means the cost of serviceability would now be at about 8% of household disposable income - a level it has comfortably been at several times in the recent past.
Additionally, disposable income has been rising in real terms for the past 20 years, and the past 10 years in particular, so relative to the cost of the basics of living - people have more, and therefore can actually AFFORD to spend more of it as a proportion of the total income if they want, without it being a problem. Right now they aren't doing this anyway, in fact it has been reported that most households have not adjusted mortgage payments as interest rates fell - choosing instead to pay down the debt faster - or as UF posted above, perhaps spending some of the difference to boot and helping to keep the economy up.
So really - where's the big problem here?
Cheers,
Beej
I'd be interested to see this chart continued for 2008 - any chance?
Cheers
Stevens is the mole who increased the rates every month for 18 months.....he is absolutley hopeless in his role....not only screwing the home owner, but all the small business employers....who are the biggest employers in this country.....
I cannot use the words to best describe his actions on a public forum ...
"It is becoming more common for Australians to see the glass as half full than as half empty,'' he said.
"Put another way, we can much more easily imagine upside risks to the outlook, to balance out the downside ones, than was the case six months ago,'' he said, citing improving consumer confidence, a slower pace of unemployment rises, and stronger-than-expected economic growth.
Mr Stevens said today -
He's beginning to sound a lot like the permabulls in here - a kindred spirit perhaps
Just don't take away the punch bowl just yet, the party is just getting started
Good for some, not so good for those hard working average aussies just trying to get the good old aussie dream of owning their own homeWell that's good - as he is in a position to influence what actually happens to a far greater extent than any of us here!
Beej
I just love the way you guys keep going on about the US market...where they have in excess of a million surplus houses...and NINJA loans....
You're forgetting what OUR version of the NINJA loan is - Working Australians having their hard earned taken for somebody else's deposit.
In an interview with Mr Stevens on ABC Radio's "PM" this evening, he even admitted the downturn had not been nearly as severe as the bank had anticipated. (Obviously implied here is that - had they known armageddon was not going to occur - they'd not have been so aggressive in reducing interest rates.)Stevens is the mole who increased the rates every month for 18 months.....he is absolutley hopeless in his role....not only screwing the home owner, but all the small business employers....who are the biggest employers in this country.....
I cannot use the words to best describe his actions on a public forum ...
Macca, I'm not sure that's fair. I can remember paying 22% on IP mortgage.Good for some, not so good for those hard working average aussies just trying to get the good old aussie dream of owning their own home
Sometimes bull property mentality really really annoys me.
I have no problem with property being "safe as houses" since the whole point of a house is to live in, but if the bulls had their way houses would be out of reach for everyone but the top 1% of the income earners.............and that once attainable "aussie dream" would be just that........a dream
<rant over>
cheers
Quote from the above article reads:
Real estate risks
Mr Stevens particularly singled-out housing as an area where debt had been used to fuel unsustainable house-price growth, rather than addressing the housing shortage by building more dwellings.
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