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Do you have a point there? Any at all? Please, humour us.
That's really good to hear - Stevens is doing a good job telling people to hurry up and pay off their debt before our banks become insolvent.
Mmmmmmmmmmm
Reserve Bank Governor Glenn Stevens today said he had no intention of engineering a return to the spiralling property prices and household debt levels which characterised the pre-2007 housing boom.
Mr Stevens said the surge in household wealth in the decade or so leading up to 2007 - which rose by about six or seven per cent a year - was driven primarily by unsustainable growth in property prices.
Read more: http://www.theage.com.au/business/r...ces-stevens-20120608-200ti.html#ixzz1xBybkcVd
They must be frothing at the mouth and having seizures at APF over that comment
Sydney, June 07, 2012 ”” Moody’s Investors Service has announced the publication of a new quarterly report that will track the performance of the Australian RMBS market. The new report was published today with performance data up to first quarter 2012, and covers the prime and non-conforming sectors.
…The current report shows that delinquencies rose in the first quarter of 2012 despite the easing of monetary policy which occurred in late 2011.
Prime deals (excluding low doc) 30-plus arrears marginally increased to 1.58% in March 2012 from 1.57% in December 2011. However, low doc and non-conforming deals saw a larger increase. For example, low doc’s 30-plus increased to 5.03% from 4.58% during the same period, and non-conforming increased to 12.06% from 10.63%.
Low doc and non-conforming deals typically have lower credit quality and hence, with an economic slowdown and uncertainty, these deals are more likely to suffer from deteriorating performance.
Not in a deflationary environment as you asserted, it is just basic investment sense.... there is no naivety about it at all. Investing in property heading into a credit contraction (you have noticed the trend since 2007 haven't you?) is naive in the extreme. Why are you fixated with PE's? Why not compare eggs with eggs and talk grossed up yields? I can tell you there are many stocks that are looking like much better deals that RE... and it even looks like prices will get a little sillier over the US summer. A smart operator will be able to kill RE fro return over the next 12 months.
Keep it up.... I like upset RE agents, when I was developing property I did very much enjoy winding them up on the odd occasion! Some of them really deserved it! Especially the young cocky ones.
Care to share with us something of what that investment was about? A 300% - $400 return?I actually had the very last of my monies just returned to me today that was invested in realestate - and I was lucky to get all of my capital returned, no profit. Inflation adjusted I lost on the deal, and at the beginning of this project they projected a 3-400pc return.
Might have been good to have acted before the bubble became so unsustainable, Mr Stevens.Reserve Bank Governor Glenn Stevens today said he had no intention of engineering a return to the spiralling property prices and household debt levels which characterised the pre-2007 housing boom.
Mr Stevens said the surge in household wealth in the decade or so leading up to 2007 - which rose by about six or seven per cent a year - was driven primarily by unsustainable growth in property prices.
Speculator come perma-bear? Well that reveals a lot of my doubts about some of these posters. So a guy who got it wrong in the first place is lecturing other posters? You would certainly hope you didn't get get it wrong twice.Care to share with us something of what that investment was about? A 300% - $400 return?
Really?
Might have been good to have acted before the bubble became so unsustainable, Mr Stevens.
Care to share with us something of what that investment was about? A 300% - $400 return?
Really?
Speculator come perma-bear? Well that reveals a lot of my doubts about some of these posters. So a guy who got it wrong in the first place is lecturing other posters? You would certainly hope you didn't get get it wrong twice.
Of course the entire blame falls on the lending institutions, doesn't it, NC!
No way any responsibility should be attributed to those engaging in loans they couldn't service.
Of course not.
Here's how it works.
In the late 1990s lenders began offering "low-doc" and "no-doc" home loans, to help self-employed people (who often didn't fit the lenders' normal wage-earner criteria) get a loan without needing to provide a lot of supporting documentation (as in, none).
In many instances clients could "self-declare" their income.
By the early 2000s the property boom was in full swing, and lenders were making a fortune flogging finance.
And just like in the US sub-prime market, some Aussie lenders decided to speed things up by paying aggressive commissions to aggressive salespeople and simultaneously lowering their borrowing standards.
Enter the A-RIPs.
Mortgage brokers targeted A-RIP consumers - those with a house paid off but no spare cash - and convinced them to "unlock" the equity in their homes by buying investment properties.
Some brokers (who were paid thousands of dollars in commissions by lenders) hung out in shopping centres, held seminars, and took out newspaper ads promising punters they could double their money in seven to 10 years -- and even increase their income by $10,000 a year - all with the power of property.
That's pretty sexy stuff when your diet consists of baked beans and Larry Emdur. Problem was that many of these A-RIPs couldn't qualify for a loan.
Enter the low-doc and no-doc ("lie to me") loans.
While the RBA doesn't keep official figures on the amount written in low-doc loans, industry analysts suggest it's in the tens of billions of dollars.
Serves them right, right?
THERE'S a part of me - the hardheaded, tough-as-nails, make-your-own-destiny part of me - that says these borrowers got what they deserved.
But over the years I've dealt with far too many financial scumbags to believe it.
Yes, the borrowers should have sought a second opinion from an accountant or a financial adviser. Yes, they should have understood the risks.
But these people sat across the table from financial professionals who were sourcing their loans from some of the strongest, most respected financial institutions in the country - and they got systematically screwed.
Consumer advocate Denise Brailey is representing hundreds of A-RIPs, and she's uncovered widespread fraud.
For example, a 2007 email from a Macquarie Bank salesperson to mortgage brokers, forwarded to me this week, said: "Why not try Macquarie for the below reasons: no docs - client only needs to be self-employed for one day or more; no assets and liabilities required, no income needs to be stated!!!"
Turns out the bankers had "six degrees of separation" between them and the eventual borrowers.
In Australia we're beginning to enter our own housing slump. With the tide now going out, we're about to find out who (lenders and borrowers) has been swimming naked.
Correct. Yet another example of the increasing way our society seems to be legislating for the most irresponsible, thus as you suggest reducing choice for the responsible.Thanks to those irresponsible borrowers whom are now seeking to have their mortgages forgiven, this product is unlikely to be made available to those whom could have made productive and responsible use of just such a facility. Thanks to the irresponsible actions of consumers, another great blow has been struck against freedom of choice.
According to the 8th Annual Demographia International Housing Affordability Survey, published in March:
"Australia exhibited the worst housing affordability of any national market outside Hong Kong. There were no affordable markets in Australia in 2011 and the overwhelming majority of markets were severely unaffordable"
And the Howard Government.You want Bernie Fraser and Ian Macfarlane - Stevens only increased interest rates after he got appointed in September of '06, all the way up to the GFC.
Sunshine and lollipops,
MW
The original Robot destroyer.
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