The future of Australian property prices

[trainspotter]

And the property permabull spuikers reckon our property market bares no resemblance to the US? Looks suspiciously like a carbon copy of US government sponsored enterprises going by the name of Freddie Mac & Fanny Mae?

When do you understand that these financiers are not available in Australia?? HUH???????????

Have a real look at the tripe you are spreading. Have you any clue of the substance of your post?? HUH?

Tell me where in the banking industry (in Australia) that we have this kind of finance available to the masses???

It is not possible for this kind of finance to be available????????

Go and get a navel and stare into it.

 

[trainspotter]

http://www.news.com.au/business/bre...es-to-surge-20pc/story-e6frfkur-1225938032242

More of the same ??? GOSH !!!!!!!! Get me a paper bag !!!!!!!!

http://www.smartcompany.com.au/econ...ee-years-new-bis-shrapnel-report-reveals.html

NOOOOOOOOOOOOO stop the rot !! .......... No more house prices to rise???

hahhahahahahah .... *gagggg* ... hahhahahah hehhhehehehehhe

Oh well ........ glad you can borrow against scrips

http://www.rivkin.com.au/g2w/Intern...k_2weektrial?gclid=CKOJxLi40qQCFQUdbgodwlNmJw

WHOOOOOOOOOOO ...... Reneee Rivikin???

Hahhahahahhahahahaaaaaaaaaa

Give me property any day.

 

[c-unit]

Had a bit of wacky tobaccy tonight, TS? :

 

[trainspotter]

Had a bit of wacky tobaccy tonight, TS? :

no ... just sick and tired of the bovine excreta that people call "intelligent" posts.

TRY SOME FACTS !!!!!!!!!!!!!!!!!!!!!!!!

 

[wayneL]

no ... just sick and tired of the bovine excreta that people call "intelligent" posts.

TRY SOME FACTS !!!!!!!!!!!!!!!!!!!!!!!!

Well TS, the bulk of your facts turn out to be nothing more than a prediction of the future (Several regurgitations of the same one in fact). It may happen, it may not, but it ain't fact.

As far as the Canada link, if one looks to overseas, one should consider the anglosphere in toto. IOW Canada, USA, Ireland, UK, NZ etc. The picture is a bit more mixed don't you think?

Now, about those intelligent posts....

 

[sinner]

When do you understand that these financiers are not available in Australia?? HUH???????????

Have a real look at the tripe you are spreading. Have you any clue of the substance of your post?? HUH?

Tell me where in the banking industry (in Australia) that we have this kind of finance available to the masses???

It is not possible for this kind of finance to be available????????

Go and get a navel and stare into it.

When is this obnoxious behaviour going to stop?!

Here are the facts trainspotter:

Australian banks hold just under $3 trillion in on balance sheet assets. What sort of assets go on a balance sheet? Traditional loans.
Australian banks hold just under $13 trillion in off balance sheet assets. What sort of assets go off a balance sheet? Anything where the bank has passed the risk on and become a facilitator. i.e. securitised loans!

Australian banks have securitised Australia's housing market 13 years of GDP worth into the future sold to foreign debt markets!

These sort of financiers are available in Australia, they are called the big 4 banks, and just because their actions are sanctioned, doesn't make them smart/sustainable/sane.

 

[robots]

hello,

oh gidday everybody, apologies for the extended absence just took a bit longer getting back from our wonderful capital city

yeah right, next time you going past Coles grab the down n' outer and take him into the nearest CBA branch to get a 500k NINJA loan (yes brothers remember those ones!)

No Income No Job or Asset, hehehehehehe yeah man the banks handing them out to the masses

thankyou
professor robots

 

[Mofra]

Australian banks hold just under $3 trillion in on balance sheet assets. What sort of assets go on a balance sheet? Traditional loans.
Australian banks hold just under $13 trillion in off balance sheet assets. What sort of assets go off a balance sheet? Anything where the bank has passed the risk on and become a facilitator. i.e. securitised loans!

Australian banks have securitised Australia's housing market 13 years of GDP worth into the future sold to foreign debt markets!

These sort of financiers are available in Australia, they are called the big 4 banks, and just because their actions are sanctioned, doesn't make them smart/sustainable/sane.

You do understand that whether a loan is securitised or unsecuritised, that is a seperate issue to credit quality right?
In addition, in Australia securitised loans are almost entirely protected by LMI - yes even those with < 80% (generally done so on a bulk scale).
LMI charges are small on a per-loan basis below 80% and fully securitised lenders pay this on behalf of the lender as part of their costs of doing business. Secruitised lenders struggled during the GFC due to the cost of funds squeezing margins, not due to any rise in delinquencies (which in Australia are amazingly low compared to other countries aas well).

In any case, credit quality is infinately higher in Australia than the US (where I believe NINJA & ARMS constituted well over 20% of the market) and our loans don't have the "jingle mail" recourse danger the US and other countries have as well.

I guess thread-wise we're now back to not making the distinction between different markets, assuming all FHBs buy at the median price on a median household income, etc etc.

 

[sinner]

You do understand that whether a loan is securitised or unsecuritised, that is a seperate issue to credit quality right?

Of course I realise this! Yet, credit quality has nothing to do with the Australian market like it did in the US (this is an issue of debt being rated AAA when it wasn't, but that isn't what I'm referring to!), so comparing credit quality is a useless metric.

The risk to Australian banks is rather in access to cheap, available foreign liquidity to keep the ball rolling. House prices can't go up if the bank can't loan money for Joe Public to bid higher than the last guy and the bank can't loan money domestically without foreign demand for that debt or much much much higher interest rates.

This huge securitisation process, to the tune of $13 trillion dollars, is simply a product of the fact that we rely on this foreign credit to keep the housing market propped. It is testament that if access to this credit stopped (say, through some sort of liquidity or credit crisis), housing credit would dry up overnight and momentum would be negative within a week.

In addition, in Australia securitised loans are almost entirely protected by LMI - yes even those with < 80% (generally done so on a bulk scale).
LMI charges are small on a per-loan basis below 80% and fully securitised lenders pay this on behalf of the lender as part of their costs of doing business. Secruitised lenders struggled during the GFC due to the cost of funds squeezing margins, not due to any rise in delinquencies (which in Australia are amazingly low compared to other countries aas well).

In any case, credit quality is infinately higher in Australia than the US (where I believe NINJA & ARMS constituted well over 20% of the market) and our loans don't have the "jingle mail" recourse danger the US and other countries have as well.

All I have to say to the continued repetition of statements like this:

If it's true, then please remove the Australian taxpayer guarantee immediately and explain why we needed one in the first place!

I guess thread-wise we're now back to not making the distinction between different markets, assuming all FHBs buy at the median price on a median household income, etc etc.

IMHO we are beyond that sort of dicussion. It just doesn't matter anymore whether there are some smart buyers amongst the herd or not, because there have been more than enough dumb buyers to start the ball rolling on a bad slope for everyone else.

 

[Mofra]

Of course I realise this! Yet, credit quality has nothing to do with the Australian market like it did in the US (this is an issue of debt being rated AAA when it wasn't, but that isn't what I'm referring to!), so comparing credit quality is a useless metric.

The sudden tightening of lending standards (from the previous standard of stupidly lax) was part of the double shock that precipitated the major decline in US house prices; Australia, even under conditons of a declining market, is unliekly to receive any such shock in changing lending conditions because teh standards are already reasonably good.

The risk to Australian banks is rather in access to cheap, available foreign liquidity to keep the ball rolling. House prices can't go up if the bank can't loan money for Joe Public to bid higher than the last guy and the bank can't loan money domestically without foreign demand for that debt or much much much higher interest rates.

This huge securitisation process, to the tune of $13 trillion dollars, is simply a product of the fact that we rely on this foreign credit to keep the housing market propped. It is testament that if access to this credit stopped (say, through some sort of liquidity or credit crisis), housing credit would dry up overnight and momentum would be negative within a week.

It's not entirely foreign credit, and there are signs of the securitisation market regaining some of the past volumes - the volumes are, of course, rated towards countries that have a higher quality of credit standard and some measure of lending protection to the portfolio. We're in the box seat in this regard.
Not all of the securitisation is foreign funds as I understand it, I don't have the exact figures although I would assume the lions' share is offshore.

All I have to say to the continued repetition of statements like this:

If it's true, then please remove the Australian taxpayer guarantee immediately and explain why we needed one in the first place!

I wasn't a fan of the guarantee in the first place - it exacerbated the redcution in lending competition in the marketplace as people flocked to the institutions protected by the guarantee. Short term protectionism has wrought longer-term pain in the form of reduced competition.

IMHO we are beyond that sort of dicussion. It just doesn't matter anymore whether there are some smart buyers amongst the herd or not, because there have been more than enough dumb buyers to start the ball rolling on a bad slope for everyone else.

I'm not convinced of any above-inflation growth in the short term or medium term (I'd tipping a fall in prices adjusted for CPI) but I certainbly don't think we have the conditions for a crash in Australia that many keep pointing to.

 

[sinner]

The sudden tightening of lending standards (from the previous standard of stupidly lax) was part of the double shock that precipitated the major decline in US house prices; Australia, even under conditons of a declining market, is unliekly to receive any such shock in changing lending conditions because teh standards are already reasonably good.

Exactly. I am not attempting to argue this point. All I am trying to highlight in this case is that in any sort of liquidity crisis, Australian banks are going to be locked out of the debt markets macro style. How can momentum continue up in housing without this lending?

It can't!

It's not entirely foreign credit, and there are signs of the securitisation market regaining some of the past volumes - the volumes are, of course, rated towards countries that have a higher quality of credit standard and some measure of lending protection to the portfolio. We're in the box seat in this regard.
Not all of the securitisation is foreign funds as I understand it, I don't have the exact figures although I would assume the lions' share is offshore.

Never said it was entirely foreign credit. But at $13 trillion we can definitely assume the majority of demand is coming from bigger markets than our own!

I wasn't a fan of the guarantee in the first place - it exacerbated the redcution in lending competition in the marketplace as people flocked to the institutions protected by the guarantee. Short term protectionism has wrought longer-term pain in the form of reduced competition.

Um what? What I was asking, specifically, was if lending standards are so damn good, do we even need a guarantee for protection? Protection from what? According to you we need no protection!

I'm not convinced of any above-inflation growth in the short term or medium term (I'd tipping a fall in prices adjusted for CPI) but I certainbly don't think we have the conditions for a crash in Australia that many keep pointing to.

Make no mistake, I am not pointing to a crash (except in the possibility of an inflationary crash). I have said over and over again that the end game (regardless of path taken) is a reduced standard of living across the board for Australians. This could be in either an environment of high property prices, or low property prices. Doesn't make a difference. We as a nation will pay the future price for present follies of those we apathetically left in charge.

 

[robots]

hello,

oh gidday, sorry to bother everyone again

could someone please point me in the direction of a bank offering a NINJA loan as I want to get down there first thing in the morning to sign up, just a no frills one, lowest rate possible

preferably in the Prahran area but I dont mind travelling to the CBD, its gonna be a good day for tram riding

thankyou
professor robots

 

[robots]

hello,

oh gidday, sorry to bother everyone again

could someone please point me in the direction of a bank offering a NINJA loan as I want to get down there first thing in the morning to sign up, just a no frills one, lowest rate possible

preferably in the Prahran area but I dont mind travelling to the CBD, its gonna be a good day for tram riding

thankyou
professor robots

hello,

anyone know? does "which" bank have them?

oh well

thankyou
professor robots

 

[Uncle Festivus]

When do you understand that these financiers are not available in Australia?? HUH???????????

Have a real look at the tripe you are spreading. Have you any clue of the substance of your post?? HUH?

Tell me where in the banking industry (in Australia) that we have this kind of finance available to the masses???

It is not possible for this kind of finance to be available????????

Go and get a navel and stare into it.

HUH??? What are you trying to say? That there isn't an RMBS system here in Aus? Because that's what we are talking about here. Otherwise I don't have a clue what you are on about?

Yes it is possible & it's a fact - if only you would read the entire post and read the supporting linked article, which obviously you haven't? You do understand that the Fed Gov is pumping money into 'the system' to keep resi mortgages outside the big 4 to keep liquid don't you?? Ignorance by many allows the few to profit from reality & facts?

I'll make it easy for you - here's a part of the article -

REGIONAL banks and other small lenders have begun talks with the Gillard government seeking a third extension to the $16 billion residential mortgage-backed securitisation program, which forms a key funding source for the sector.

The smaller banks are hoping to capitalise on recent concerns raised by Treasurer Wayne Swan about the state of competition in the market, amid speculation that some of the bigger banks could push through an out-of-cycle interest rate rise.

The government has invested in $11.3 billion worth of low-risk mortgage securities and been a cornerstone investor in several major transactions in a bid to boost investor confidence after the securitisation market stalled in 2008.

Securitisations are loans - mostly in the form of mortgages - that have been bundled into bonds and then sold to investors. They represent an important source of funding for smaller lenders.

You have to now prove that the Aus Fed Gov does not provide funding to the residential mortgage-backed securitisation program for your points to be valid? I'm not sure you can?

The Australian Office of Financial Management (AOFM) has been directed by the Treasurer to invest temporarily in Australian Residential Mortgage-Backed Securities (RMBS) to support competition in mortgage lending from a diverse range of lenders.

http://www.aofm.gov.au/content/rmbs.asp

In summary, an Australian government agency has been given the authority to purchase up to $16BILLION of Residential Mortgage-Backed Securities (RMBS), and to hold them till the 'price is right' ie indefinatly ie efffectively underwriting/subsidising the private housing market.

hello,

oh gidday, sorry to bother everyone again

could someone please point me in the direction of a bank offering a NINJA loan as I want to get down there first thing in the morning to sign up, just a no frills one, lowest rate possible

preferably in the Prahran area but I dont mind travelling to the CBD, its gonna be a good day for tram riding

thankyou
professor robots

The Fed Gov is basically underwriting the property market, so any bank is capable of giving you 'subsidised' loans? BTW, how is that IP you bought at the top of the market 4 months ago going? And, why do you need to ride around in circles on the trams all day - shouldn't you be out on your yacht or doing what ever the idle rich do these days?

COMMONWEALTH Bank chief Ralph Norris signalled yesterday that the CBA could be one of the first to lift interest rates.
In a hard-hitting speech, Mr Norris detailed the increased funding pressure on the banking system and said rate rises were inevitable.
"There is no doubt, when we look at the current funding costs, rates are going to increase," he said after speaking at a lunch of the Committee for Economic Development of Australia.
"The additional cost of liquidity and the additional cost of capital is going to put upward pressure on interest rates going forward."

......

Mrs Kelly warned again earlier this week that interest rates in Australia would be under upward pressure for the next 18 months because of changes caused by the global financial crisis.

The talk is at least 15 bp's

Click on this link for the full story

 

[Beej]

Australian banks hold just under $3 trillion in on balance sheet assets. What sort of assets go on a balance sheet? Traditional loans.
Australian banks hold just under $13 trillion in off balance sheet assets. What sort of assets go off a balance sheet? Anything where the bank has passed the risk on and become a facilitator. i.e. securitised loans!

These figures *may* be facts, although I'd like to see a link/source backing these figures up, as they seem far higher than any reading of figures from APRA etc that I have every seen - especially the $13T one. Also regardless you would be talking about total assets, not just residential housing loans, securitised or not. Ie business loans, hard assets, good will and so on and so forth.

Australian banks have securitised Australia's housing market 13 years of GDP worth into the future sold to foreign debt markets!

This statement is completely false. Total residential mortgages in Australia are in the order of $1.2T or about 1 years worth of GDP according to APRA and RBA data. Where do you get this $13T fugure from exactly?

Also, only 5-10% of Australian mortgages are securitised - the vast bulk are traditional loans with traditinonal banks held on balance sheet.

EDIT/PS: $16B in government supported RBMS = about 30,000-40,000 transactions, or about 5% of the annual residential property turnover nationally - spread over several years by the way. Not really that big a deal. What's more the reason for this intervention was quite clear - the collapse of overseas funding sources/credit markets during the GFC resulted in the effective shutdown of the Australian RBMS/securitisation markets - as a result all non bank lenders pretty much went t1ts-up. The government as a part of the whole stimulaus program wanted to provide some liquidity to that market for a number of reasons, including letting RBMS based funds be able to sell some securities to cover demand for redemptions and so on, which would have otherwise remained frozen. Not so evil really and nowhere near as big a deal as made out by the property bears.

Cheers,

Beej

 

[robots]

hello,

oh gidday, yeah everything going fine thanks

i enjoy the trams, trains and buses and lots of us on them, those living large

the train to Canberra the other week full of nomads as well, awesome

oh well

thankyou
professor robots

 

[nunthewiser]

hello,

oh gidday, yeah everything going fine thanks

i enjoy the trams, trains and buses and lots of us on them, those living large

the train to Canberra the other week full of nomads as well, awesome

oh well

thankyou
professor robots

ahha brother robots.....good to see all is well in nirvana.

me....... i went for a ride this morning ........just rumbling around the suburbs, catching the breeze and makin a noise.....

did notice how many houses and blocks were sitting stagnant(some 2 years) and unloved.... who knows eh.......may have to start putting in some ridiculous offers just to keep myself occupied in these "buyers market"times.
maybe i,ll just go on another ride......dont seem to be any hurry to add to property just yet........screws need a few more turns for the pain to really sink in for some.

VulturesRus seems like a great idea for an investment group ya reckon?

geez that nun fella shore picked that top to a tee...

 

[explod]

ahha brother robots.....good to see all is well in nirvana.

me....... i went for a ride this morning ........just rumbling around the suburbs, catching the breeze and makin a noise.....


VulturesRus seems like a great idea for an investment group ya reckon?

geez that nun fella shore picked that top to a tee...

Lendary there Nun, in fact none wiser, have been following you for some time and think you may be on the right track.

Keep up the good work, will be looking for a cheap quality property myself down the track. So will be watching the direction and looking forward to your continued good calls.

Bit out of tram country myself but the public busses wonderfull down here in Far Far Away Land

 

[Slipperz]

The rise of the Aussie dollar could well dampen down the higher end of the Sydney property market.

By all accounts there has been a lot of foreign investment of recent and that may cool off given the surging value of the Aussie dollar.

Suits me fine. I'm looking to buy into the Northern Beaches outright in a few years. My strategy is to develop my portfolio and buy outright and give the banks the finger.

IMHO the way the banks operate is disgraceful. The less money I give them and the less I have to deal with them the better.

 

[robots]

hello,

oh come on Slipperzz, the banks offer a product and everyone has the right to take it or leave it

they take deposits and loan it out like they have done for millions of years, no big deal, i find most people who dislike the banks are jealous yet they would trade places in a heart beat with R.Norris

oh well, bank bashers

yeah well done Nun, gee Explod i never got any congratulations like that from you, i dont know man

thankyou
professor robots