- Joined
- 15 March 2006
- Posts
- 469
- Reactions
- 0
Thats the whole point. A limited amount of money stops Inflation which is really another form Taxation.
Ever wondered why nobody saves anymore. There's no point because Inflation devalues the money you have saved.
Debt = Slavery, obviously the majority of people are either too stupid or ignorant to do some research to find out they are being f^cked up the Ass...
From ABC, 3 Feb. 08
300,000 FACING HOME LOAN DEFAULT: RESEARCH
Economists predict the number of Australians likely to default on their home loans this year will increase because of rising interest rates, massive credit card debt and falling house prices.
Research by JP Morgan and Fujitsu Consulting quoted in Fairfax publications suggests 750,000 home owners will be hit by 'mortgage stress' in the coming months.
It is anticipated up to 300,000 of those will default on the loan and could have their homes repossessed.
JP Morgan spokesman Brian Johnson says one of the factors driving the problem is massive credit card debt.
"The fact is, the average household in Australia [spends] over three months of its disposable income on credit card debt," he said.
"The other thing is that in Australia we only have a system of negative credit reports, which means the credit bureaus only capture people who are defaulting on their credit card.
"There's no data captured about the actual total dollar value of debt."
ANZ chief economist Saul Eslake says a number of factors have contributed to the problem, but he says compared with international standards the number of people in trouble is still quite small.
"There are more than five million mortgages in existence in Australia and although the number of people who are encountering difficulty servicing them is clearly rising, the proportion remains extremely low, especially by comparison with the United States," he said.
Nonsense.
And completely off topic.
Incorrect. The majority of equity release credit flows into investments, not discretionary spending. The "glee" of equities bulls posting every negative sentiment-filled article on this thread tends to overlook the fact that credit & bull markets are intertwined, and residential property equity is perhaps the easiest bulk crediut available to the average consumer.The other thing to consider is the use of homes as ATMs. As house prices were rising homeowners took out home equity products to fund other discretionary spending. Many also spent the "capital gains" even though it wasn't relised. (You just have to look at company profits over the last couple of years)
Surely the debt held decreases proportionally to the equivalent reduction in spending power as a result of inflation on cash-held savings?Debt = Slavery, obviously the majority of people are either too stupid or ignorant to do some research to find out they are being f^cked up the Ass...
This is correct, the current monetary system is based on debt, at some point like what is happening in the USA, a debt based monetary system is unsustainable and will eventually collapse.Surely the debt held decreases proportionally to the equivalent reduction in spending power as a result of inflation on cash-held savings?
Cash = depreciating asset.
AS THE hopes and dreams of younger Australians are dashed by poor housing affordability, the time has come to reassess the long-standing national love affair with home ownership.
With a new international survey showing great swaths of Australia in the grip of a world-class affordability crisis, it's clear that the home-ownership dream has fast become a nightmare, and a lifetime of renting awaits those who can't catch the runaway real estate train no matter how hard they chase.
The survey by an American and a New Zealand researcher highlighted that housing on the Sunshine Coast and Gold Coast is less affordable than it is in New York.
But the question is – does it really matter and is it such a disaster to rent rather than buy? The accepted wisdom is that "rent money is dead money" but, in reality, you either rent the home or "rent" the money to buy the home in the form of interest.
In fact, an owner-occupier who borrows $400,000 at 8 per cent a year to buy a $500,000 home ($100,000 deposit) will have paid $656,621 in interest alone at the end of a 30-year loan. A renter would need to fork out $420 a week for 30 years to match that interest bill.
Admittedly, the mortgagor would own a home worth about $1,214,000 at the end of the loan (assuming the property value rose in line with inflation of 3 per cent a year), but what if he or she'd decided instead to rent at $420 a week and invest the $100,000 deposit in a portfolio of growth assets such as share and real estate unit trusts.
If those trusts returned a moderate 8 per cent a year net of fees and taxes reinvested over the 30 years then the renter would need to add only $20 a week to the portfolio to match the home value of $1,214,000. Compare $440 a week with the mortgage repayments which start out about $730 a week. Of course, if the renter chose to invest the full difference between the rent and the mortgage – $310 a week – then he or she'd amass $2,942,000, which puts the renter even further in front.
Could it be that the same people who run the RBA, also run the ATO?
Oh please go on.
Got a wiki link for that?
No, the world is run by a crime syndicate of inbred families...Aliens run this planet. we are all doomed
Rising interest rates will affect both the number of develpers conducting developing activites, especially the small scale stuff suchas investors knocking down and building back duplexes,
as well as reducucing the amount of developments the active developers are conducting,
Incorrect. The majority of equity release credit flows into investments, not discretionary spending.
Why will a devolper care about Higher Interest rates or falling prices in the wider market if his business profits are protected by falling input costs such has which just been passed by the Brisbane council and possibly more from the mayor hopeful ?
QUOTE]
From the moment that they buy the land to the point where they are selling off the property they are paying interest.
So if the interest rate increases then by default the profit margin decreases.
this is also made worse by the fact that as interest rates increase it takes longer to sell the properties with in the development there for increasing the time which the development is subject to the higher interest rates and so profit margin will be lower.
Because it takes longer to sell of the units the developer can not free up the capital to move onto the next development as rapidly so less developments get done.
also alot of would be developers will not take the risk in the smaller projects they were planning due to the risk of serverly reduced margins.
Australia average pretax wage = 55k , average House 440k , thats over 10x post tax income = Does not compute.QUOTE]
ha ha ha ha, guess what NC that tells me RE is as high as ever, so much for stagnation
thankyou very much
robots
for instance a labourer in Vic on EBA rates is on around 60k a year with site allow, travel allow etc, and you also get portable sick leave, redunancy etc
Location: VIC - MELBOURNE
Emp Ref: Labou- Ashphalt
Salary: $20+ p/h
Positions: 20
--------------------------------------------------------------------------------
Challenge Recruitment Ltd is searching for keen and enthusiastic labourers to be trained in the Asphalting industry. You will be trained in the following skills: Asphalting experience or a HR license please feel free to also apply. Please call 9501 9533 or fax your resume to 9501 9544.
Preferred Licence(s):
Car, Heavy Rigid vehicle.
but still plenty of affordable houses around,
Why will a devolper care about Higher Interest rates or falling prices in the wider market if his business profits are protected by falling input costs such has which just been passed by the Brisbane council and possibly more from the mayor hopeful ?
From the moment that they buy the land to the point where they are selling off the property they are paying interest.
So if the interest rate increases then by default the profit margin decreases.
this is also made worse by the fact that as interest rates increase it takes longer to sell the properties with in the development there for increasing the time which the development is subject to the higher interest rates and so profit margin will be lower.
Because it takes longer to sell of the units the developer can not free up the capital to move onto the next development as rapidly so less developments get done.
also alot of would be developers will not take the risk in the smaller projects they were planning due to the risk of serverly reduced margins.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?