theasxgorilla
Problem solved... next bubble.
- Joined
- 7 December 2006
- Posts
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Atomic5 said:
And here I was expecting a comment about Swedish vrs Danish beer
Atomic5 said:You'll probably be driving to Denmark on the weekend with the rest of them for the cheaper booze and end up partaking in drunken "how stupid are the Swedes" jokes by the Danish
i digress.....
wayneL said:The contagion is spreading
http://www.belfasttelegraph.co.uk/breaking-news/ireland/article2369491.ece
numbercruncher said:But I still maintain my original statement, that _most_ Melbourne buyers would be looking currently at a paper loss if they bought a year ago and sold right now.
We're at the point of experiencing the downside of the housing boom. Many home owners have been most gratified to see the value of their home at least double over the Howard Government's 11-year term.
What started as a way to get rich quick has been transformed into a way to bleed slowly. More may decide to cut their losses and sell. It's likely that a lot of the mortgagee sales we're hearing about are of investment properties.
robots said:hello,
gee another conspiracy to keep house prices up with the US reserve bank keeping interest rates on hold
rubbish
but wayne says the inflation genie is out of the bottle
save hard , get a property
thankyou
robots
...when the time is rightrobots said:save hard , get a property....
Ramprobots said:hello,
prices havent dropped in Aus for "quality" property, but increased
people have been buying well, people with the dollars
solid as in capital cities, go for walk around see whats happening instead of reading the media
so easy picking the top of the boom!!, you will regret it if sitting waiting
thankyou
robots
Kimosabi said:Due to everyone increasing prices to be able to afford to pay for Over-Inflated Assets, Interest Rates will be forced to RISE
I suspect that's true and I've long been expecting that to happen at some point. But do you have any firm evidence that major lenders are tightening credit right now?Kimosabi said:Credit Crunch is coming to a bank near you. Due to banks tightening lending standards, fewer will be able to borrow money to buy over-priced assets, thus prices will have to come down.
...
Some Aussie Banks are already increasing lending standards NOW. Borrowing money will be much harder during Bust.
Smurf1976 said:I suspect that's true and I've long been expecting that to happen at some point. But do you have any firm evidence that major lenders are tightening credit right now?
Are they just increasing the minimum quality of borrower they will lend to or are they actually reducing the amount that will be lent to high quality (less than 80% loan to value, full time employed, clean credit history) borrowers?
The important point about it all (well there are several really) is that you don’t make house prices more affordable by making credit more widely available. By the way did you notice ANZ is already tightening its lending practices? Australia is not America, of course. What will happen here? Hopefully not a repeat of America’s mortgage market.
http://www.dailyreckoning.com.au/mortgage-market-2/2007/03/15/
ANZ appears to be one of the more responsible banks.Profit growth slowing – loan loss provisions rising!
ANZ has provided a timely warning about substantially rising loan loss provisions in the coming year. Recent interest rate increases are affecting overall lending with a slowing in the rate sensitive mortgage lending segment. From heady growth above 20% two years ago the growth rate in mortgage lending is currently around 12% and slowing.
While the credit cycle has peaked and therefore one would expect loan loss provisions to increase it is the adoption of new accounting standards – AIFRS – that will also impact on the level of provisions and introduce more volatility. Under the previous Economic Loss Provisioning, banks could smooth the impact of losses as the charge to the Profit & Loss account reflected the loss expected across the portfolio through the economic cycle. The sensitivity to losses in one particular year was eliminated. Under AIFRS the charge to the Profit & Loss account is direct and comprises two components: (1) `individual provisions’ for losses on specifically identified impaired loans; and (2) `collective provision’ being an allowance for loans that have not been specifically identified but events have occurred that are likely to have caused them to become impaired. Consequently when the credit cycle turns, not only will the individual loan provision increase but banks will also have to increase the collective provision as the change in conditions could cause some of the loan portfolio to become impaired.
In FY06 ANZ’s loan loss provision was $407m comprising an individual provision of $338m and a collective provision of $69m. This compared with FY05’s total provision of $565m comprising an individual provision of $357m and a collective provision of $139m. In the current year it is likely the total provision could increase by around 50% to near $600m – individual $450m and collective $150m.
The combination of slower lending growth and intense competition will continue to pressure net interest margin and reduce growth in net interest income while non-interest income growth will also be impacted by competitive pressure on fees and commissions.
We are looking at a slowing to 9.5% in the current year after a 13.8% lift in cash net profit in FY06. Management is committed to increased capital expenditure in the Personal business segment which accounted for 50% of the increase in group cash earnings in FY06. Management has identified growth in the domestic branch network and expansion into as key parts of the overall growth strategy.
Source: e-Trade Aspect Huntley's Recommendation
http://www.news.com.au/business/story/0,23636,21426591-37037,00.html
Rates forecast to keep rising
By Nicki Bourlioufas
March 22, 2007 11:14am
A KEY analyst is predicting interest rates will rise in the first week of April and again within 12 months, which would hit hard Australians on lower incomes.
“On balance it now looks likely that the Bank will raise rates by 0.25 basis points following its April 3 Board meeting,” said Westpac Bank’s chief economist Bill Evans today in a research note.
Any decision would be announced to the public on April 4.
The central bank raised interest rates three times last year, with November’s rate rise of 25 basis points taking official interest rates to a 6-year high.
Being stung by higher interest rates? Have your say in our survey.
According to Mr Evans, the pain to households will continue into next year and rates would rise even more.
“A rise in interest rates in April or May would not mark the peak of the cycle. We expect that the Bank would be prepared to go on hold for the remainder of 2007 to assess the cumulative impact of four rate hikes over a full year.
“However, we expect that the factors pushing up inflation over the last year would remain apparent through the second half of 2007 leading to a further move by early 2008.”
Recent economic data suggests wages growth remains robust and economic growth remains “relatively growth”.
The RBA sets interest rates to keep inflation between 2 and 3 per cent and strong economic growth pressures inflation higher.
The Aussie dollar has surged over US80 cents and bond yields have gone up in expectation of another rate rise. The Australian bank bill futures market yesterday put the chance of a rate rise at the next Reserve Bank board meeting at 50 per cent, while a rate hike in the next 12 months is considered a certainty.
People on lower incomes and Australians up to their ears in debt would be hurt particularly by another rate rise.
Bank repossessions of properties are rising around Australia, especially in lower income areas such as Sydney's and Melbourne's outer suburbs.
Property investors who also bought at the peak of the boom of 2003 have also been stung by higher interest rates and some home owners are now in a position where their mortgage is worth more than their home, or they hold "negative equity".
:sleeping:hello,
wow a .75% increase last year, and "maybe" a .25 increase coming up
gee that will knock things over wayne, but there already knocked over aren't they?
things have already collapsed going by this thread
thankyou
robots
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