Thx good info. That's a significant reduction in reliance on European credit markets. However, the amount remaining as reliant on international credit growth is still very very high as a proportion of the total.
plainly wrong.. aus banks have been dropping their mortgage rates in line with the overnight cash rate set by the RBA, however not passing through all BP's. Savings rates are not slashed nearly as much and have been relative to mortgage rates been much stronger. Why? banks have been trying to reduce reliance on wholesale offshore funding and more on domestic savings ie attracting them with a relative higher rate.
EDIT: http://www.rba.gov.au/publications/fsr/2012/sep/pdf/aus-fin-sys.pdf pg21
"The risks Australian banks could face from their use
of wholesale funding are being mitigated through
the ongoing compositional change to the liabilities
side of their balance sheets (see ‘Box A: Funding
Composition of Banks in Australia’). Deposit growth
has remained strong, at around 9 per cent in
annualised terms over the past six months, reducing
banks’ wholesale funding needs. However, the
strong competition for deposits has widened their
spreads relative to benchmark rates, contributing
to an increase in banks’ funding costs relative to the
cash rate. Deposits now account for 53 per cent of
banks’ funding, up from about 40 per cent in 2008"
plainly wrong.. aus banks have been dropping their mortgage rates in line with the overnight cash rate set by the RBA, however not passing through all BP's. Savings rates are not slashed nearly as much and have been relative to mortgage rates been much stronger. Why? banks have been trying to reduce reliance on wholesale offshore funding and more on domestic savings ie attracting them with a relative higher rate.
Is real estate (representing 'other investments' as above), really doing so much better?So my original comment was along the lines of why would you keep it in the bank getting 4% when you can do far better with other investments? Where is all this "cash on the sidelines" going to go? Shares have been good, maybe some of will flow into real estate too? Cheers.
Does it make a difference that the yield on cost (after outgoings) a property has the potential to at least track inflation over time?I can't now recall the yield you've quoted for your investment property, but think it wasn't much over 4%?
I suppose it depends on what period of time you're suggesting represents "over time".Does it make a difference that the yield on cost (after outgoings) a property has the potential to at least track inflation over time?
Is real estate (representing 'other investments' as above), really doing so much better?
I can't now recall the yield you've quoted for your investment property, but think it wasn't much over 4%?
Apologies if I'm quite wrong.
A house in my street sold a few months ago and is now being rented out. I did the calculation as to yield on the purchase price and, after expenses, it's well under 4%. And that's without all the potential hassle of tenants, repairs and maintenance, rate rises outstripping rent increases etc.
Bank shares with grossed up yield would seem to be a better proposition, as would locked in term deposits of a few years ago, still bringing in 8% with no anxieties attached.
he gI would argue there needs to be little supply.
Currently we have massive supply and where you get that you get decreasing prices and there are suburbs where that is happening.
Where supply is lacking you'll have prices holding or indeed rising and there are suburbs where that is happening.
Demand is being met buy supply simple as that.
The desperate (or smart) sell at lower prices.
plainly wrong.. aus banks have been dropping their mortgage rates in line with the overnight cash rate set by the RBA, however not passing through all BP's. Savings rates are not slashed nearly as much and have been relative to mortgage rates been much stronger. Why? banks have been trying to reduce reliance on wholesale offshore funding and more on domestic savings ie attracting them with a relative higher rate.
Since the GFC the banks have been paying depositors at rates higher than 90 day BBSW. There's certainly been some compression over the last few months on how much extra the banks are paying, but it's still quite high by pre GFC standards.
I get the feeling the flood of money has started to hit the ASX. Anything offering 6% yield seems to be taking off. NAB is up 25% since November. I'll take the ability to positively gear a share portfolio over negatively gearing a house any day.
you do realise how banks create money out of thin air don't you?
If I deposit $10 into ANZ they can then lend out $90 and charge the borrower the going interest rate plus fees for the privilege.....
wake up we are being shafted!!!!
If you are serious about trading the market you have to understand how money is created....
google...how money is created out of thin air
good luck
you literally have said nothing of value
Is real estate (representing 'other investments' as above), really doing so much better?
I can't now recall the yield you've quoted for your investment property, but think it wasn't much over 4%?
Apologies if I'm quite wrong.
Bank shares with grossed up yield would seem to be a better proposition, as would locked in term deposits of a few years ago, still bringing in 8% with no anxieties attached.
Just to throw the cat amongst the pigeons (it is Friday)...
View attachment 50978
http://www.businessinsider.com/matt-kings-most-depressing-slide-ever-2012-12
NB: I don't necessarily agree.
I agree Julia, I don' even get 4% return and endless hassles with my IP. And it is frustrating watching fairly safe blue chip stocks soar while my house price does nothing. Also, tenants depreciate the value of the property because they don't bother to look after it. The only advantage for me is that I can't make fast stupid mistakes like i can in the stock market. So for myself, with limited skills and high risk aversion, property feels safer. I could sell the house and put the money into term deposits, but we may end up with near 0% rates like the US. I am hopeful the government will continue to make poor policy decisions which continue to inflate the housing sector (sorry FHB)
Curious as to why you don't necessarily agree with "one of the most powerful forces in all of economics: demographics", McLovin?
I will add though, this is a more solvable problem for Oz than most other countries as we are population wise a small country with robust immigration and immigration prospects.
Looks like you answered the question yourself.
I'd add America to that list, even Ireland and Spain.
Does it make a difference that the yield on cost (after outgoings) a property has the potential to at least track inflation over time?
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