Bank affordability calculators are all set at 2% higher than the non-discounted standard variable rate. Still plenty of fat factored in for newer homebuyers.I heard a few fho at my work place sqeeling today when the raise was announced. Those that were foolish enough to take loans of 400 - 450 at the lure of the grant will have alot more sqeeling to do with future rises.
Bank affordability calculators are all set at 2% higher than the non-discounted standard variable rate. Still plenty of fat factored in for newer homebuyers.
This bear fantasy that 0.25%, 0.5% of a full 1% is enough to precipitate a crash to the entire market (even the more vulnerable outer suburban markets) is amusing.
Great news IR's up.
Fantastic our economy has survived the GFC and is on the path to recover
Hope to see them back around 5% by the end of the year.
Oh, forgot about all those teaser rates offered to FHB last year, they must start resetting soon.
Oh well, they did get free taxpayers money of KRUDD and the govnuts.
Cheers
Bank affordability calculators are all set at 2% higher than the non-discounted standard variable rate. Still plenty of fat factored in for newer homebuyers.
This bear fantasy that 0.25%, 0.5% of a full 1% is enough to precipitate a crash to the entire market (even the more vulnerable outer suburban markets) is amusing.
Beijing has tightened lending, requiring buyers of second homes to put up a downpayment of at least 40 percent
In Singapore,.......... Home buyers are also now limited to borrowing up to 80 percent of the property's value, instead of 90 percent.
Westpac Banking Corporation has tightened its mortgage loan criteria ………. from 92 per cent to 87 per cent including two per cent for lenders’ mortgage insurance.
Bring on the global "guide lines". If our government's arn't ever going to step in!
Oh god thats the solution. More government guide lines and regulations!!
To fix what? The previous actions of government to inflate the bubble?
Why do Aussies always want the government to solve problems in spite of all evidence that they just make it worst?
Our government would never step in and force such a thing.........think of all the revenue they would loose. They have a direct interest in higher prices and higher transactions.The Commonwealth, ANZ and NAB continue to promote lending of up to 97% (including insurance) for investment properties. Beijing's LVR is 60% for investment properties.
Bring on the global "guide lines". If our government's arn't ever going to step in!
On a side note, If you look at what portion of a property is increasing the most, it's the land. Problem, as I understand it, here is that the government has been slow to release and rezone land. What does become available gets snapped up by the major developers(usually before they are rezoned since they have inside info) who then drip feed it to the public to keep land values high.
What's the answer, I'm not an expert in the area, but I'd assume that an increase in the release of land - TO THE PUBLIC - should release some of that upward pressure.
Imagine if there were a flood of cheap($20-$50k) land available in new surrounding suburbs over the next few years. If Rudd wanted to stimulate things why not put those billions into developing new affordable suburbs to rebalance this seeming imbalanced of supply/demand. But then again that would never happen given my opening statement.
cheers
Our government would never step in and force such a thing.........think of all the revenue they would loose. They have a direct interest in higher prices and higher transactions.
What we need in this regard is to break that government reliance on income from the housing sector.
On a side note, If you look at what portion of a property is increasing the most, it's the land. Problem, as I understand it, here is that the government has been slow to release and rezone land. What does become available gets snapped up by the major developers(usually before they are rezoned since they have inside info) who then drip feed it to the public to keep land values high.
What's the answer, I'm not an expert in the area, but I'd assume that an increase in the release of land - TO THE PUBLIC - should release some of that upward pressure.
Imagine if there were a flood of cheap($20-$50k) land available in new surrounding suburbs over the next few years. If Rudd wanted to stimulate things why not put those billions into developing new affordable suburbs to rebalance this seeming imbalanced of supply/demand. But then again that would never happen given my opening statement.
cheers
Oh god thats the solution. More government guide lines and regulations!!
To fix what? The previous actions of government to inflate the bubble?
Why do Aussies always want the government to solve problems in spite of all evidence that they just make it worst?
Our government would never step in and force such a thing.........think of all the revenue they would loose. They have a direct interest in higher prices and higher transactions.
What we need in this regard is to break that government reliance on income from the housing sector.
It's a fair & reasoned response, however there are a few factors I believe are in homebuyer's favour:Interesting, you need to analyze the amount of indebtedness of mortgagee holders against income. Think you will find that how it was in the past is not how it is today. In the 90's rates raised above 10% but if this happened today many many would fold as their debt to income ratio has greatly changed.
Anyhow.
Let us not forget that many FHB bought on intro rates of around 4.5% last year, discounted for the first year. These are starting to reset.
Current variable rates from the majors seem to be around 6.8%. This would see a 50% increase in mortgage repayments. Even if they took the normal rate on average of 5.3% would still see an increase of
Hmmm 2% leeway from the banks when calculating the max mortgage amounts seems to have already disappeared for the many FHB's that bought with 90 LVR's and mortgage intro rates last year.
I would also challenge the validity of the assumption that the banks 2% leeway is fair and correct in today volatile economic community.
I for one have been surprized every time my wife and I have asked the banks how much we can borrow. It has always been greater than what we could reasonable expect to service unless we become air eating humans.
Cheers
a. AWOTE has been increasing at above inflation rates for years so anyone who has bought greater than 12 months ago could reasonably expect to have an even greater income to service the existing debt
+1 to that!I just cannot see it going much higher, who is going to keep buying out houses at 400 - 500k with average incomes of 60k. Once there is no fresh meat to keep passing the parcel down the prices will come to a halt.
In the US:
Second wave of mortgage blow-ups due.
Any effect on AUS?
That may be the case for yourself and your partner, but the weight of statistic evidence is differs from your personal circumstances. FTR I have had increases in salary every year for the past few years, including upgrading salary upon changing jobs.Sorry I can't agree with that.
I haven't seen a pay increase for 2 years now apparently due to the GFC (thx Tyco). So my ability to service a loan has actually decreased dramaticaly over that time with the rise in costs of everything else.
My partner is in a similar boat.
Bonuses and O/T goneski.
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