The Credit Crunch is now hitting Australia!

[numbercruncher]

The credit crunch has finally hit the Aussie housing market. Local low-doc lender Bluestone raised its lending rates by 17 to 55 basis points yesterday. This means potential new home buyers with sketchy credit histories will pay an interest rate anywhere from 7.8 percent to 12 percent””if they can get a loan. It looks like we’ll have to cancel our plans to build a New Hat Factory for the ever-expanding Daily Reckoning Australian Enterprise.

http://www.dailyreckoning.com.au/interest-rates-bluestone/2007/08/14/

Finally people who cant afford it wont be joining the property speculation bandwagon .... what will this mean for the realestate pyramid scheme that banks on new entrants to move people up the ladder ? time will tell

 

[chops_a_must]

Re: The Credit Crunch is now hitting Australia !

http://www.dailyreckoning.com.au/interest-rates-bluestone/2007/08/14/

Finally people who cant afford it wont be joining the property speculation bandwagon .... what will this mean for the realestate pyramid scheme that banks on new entrants to move people up the ladder ? time will tell

There we have it, the end of the housing boom is neigh.

But unless we cut immigration levels, it's going to get really nasty for ordinary people.

 

[theasxgorilla]

Unfortunately there is only one thing about Daily Reckoning you can be sure of...their complete and utter bias toward the bearish side of any story. Even a stopped clock is right twice a day. Within the context of several years of pessimistic drivel this isn't worth the bandwidth its delivered over.

 

[numbercruncher]

hehe i sort of expected someone to question the source, heres one that doesnt have a Bear bias.

Lender Bluestone has warned that the big four may have to raise their interest rates by more than just the Reserve's increases in cash rate and that borrowers would find it harder to gain access to discounted rates that have been becoming more common. Yesterday Bluestone said that it would be increasing rates on loans by 17-55 basis points on top of the RBA's 25 basis point increase last week. The move came following discussions the lender had with its bankers about the likely future cost of funding.

http://www.infochoice.com.au/Banking/news/07/08/article17037.asp

 

[numbercruncher]

THE US mortgage crisis has hit Australian home buyers for the first time after one lender yesterday hiked its rates by up to double last week's official interest rate rise.

Bluestone, with about $3 billion worth of loans on its books, yesterday blamed higher funding costs as a result of the global credit squeeze for its decision to lift its lending rates by between 17 and 55 basis points.

http://www.news.com.au/heraldsun/story/0,21985,22241622-661,00.html

 

[dhukka]

RAMS is also finding it tough

Australia's Rams Home Loans Group Ltd. said the shakeout in global debt markets may cut profit, sparking a 19 percent plunge in the stock that makes it the nation's worst-performing initial public offering this year.

The impact on the company's June profit forecast ``is likely to be material'' because of rising financing costs, Rams said today in a statement. The Sydney-based lender, which went public last month, gets almost half the funds for its mortgages by selling short-term debt in the U.S.

``Companies like Rams are heavily dependent on what's happening in the credit markets, and a major global event like this one is going to hurt,'' said Peter Morgan, who manages more than $3 billion at 452 Capital in Sydney. ``Rams won't be the last Australian company to feel it, and you can multiply it by a hundred overseas.''

The warning from Rams, the first Australian home-loan company to say profit may be hurt by the deepening crisis in credit markets, follows bankruptcy filings in the U.S. by American Home Mortgage Investment Corp. and New Century Financial Corp.

 

[noirua]

No need to worry! That comes from the eminent CNN in this article "Credit Contagion", and that is despite a 167 point fall in the Dow, on Wednesday: http://money.cnn.com/2007/08/14/news/international/pluggedin_gumbel_contagion.fortune/index.htm

 

[Mofra]

http://www.dailyreckoning.com.au/interest-rates-bluestone/2007/08/14/

Finally people who cant afford it wont be joining the property speculation bandwagon .... what will this mean for the realestate pyramid scheme that banks on new entrants to move people up the ladder ? time will tell

Non conforming lenders such as Bluestone & Liberty only cover a small fraction of the market, and tend to focus on credit impared borrowers anyway.
Will be sad if it forces some of these borrowres out of the market, because generally these are lenders of last resort & no reputable lender will offer credit to these sorts fo clients.

 

[Kathmandu]

Non conforming lenders such as Bluestone & Liberty only cover a small fraction of the market, and tend to focus on credit impared borrowers anyway.
Will be sad if it forces some of these borrowres out of the market, because generally these are lenders of last resort & no reputable lender will offer credit to these sorts fo clients.

These are the sort of people who shouldnt be allowed to borrow money in the first place and is part of the reason for thing's going a little bit pearshaped.

Dave

 

[-merry]

Non conforming lenders such as Bluestone & Liberty only cover a small fraction of the market, and tend to focus on credit impared borrowers anyway.
Will be sad if it forces some of these borrowres out of the market, because generally these are lenders of last resort & no reputable lender will offer credit to these sorts fo clients.

There is a reason why they don't offer credit to these sorts of clients.. and bluestone's decision to raise interest rates is gonna cause people with poor credit rating and who are just scrapping through their loan repayments to default and cause even more problems.. good one bluestone!

 

[Sprinter79]

NOt sure if anyone else heard it, but on 882 here in Perth, there was an interview with Aussie's head dude (his name escapes me) on the way home from work.

He always seems jolly, but he didn't seem too worried about it all, its only a small section of the market blah blah.