Australian (ASX) Stock Market Forum

NAB is under geared, similar loan book to the rest of the banks in OZ. Hardly adverse risk here.

We can see the impact of these factors in NAB’s recent results. The bank’s average mortgage borrower is eight months ahead of the required payments, and two-thirds of customers are at least one month ahead, the average loan to valuation ratio on its books is 48%, and some 15% of the book is insured. The consequence is that the bank’s loss rate on mortgage lending is 0.04%. Clearly there are still risks, for example if a mortgage insurer were to collapse, but it looks quite safe.

http://www.thebull.com.au/articles/...nks-skirt-unofficial-home-lending-limits.html

EXCEPT BOQ who has the highest exposure to recalcitrant borrowers. In saying that they have tidied up their act in the last few years and moved out of residential and moved into commercial !!

A near-doubling of impairment charges caused by its exposure to the ailing regional commercial property sector has seen Bank of Queensland’s annual profit slide by 13 per cent to $158 million.
The Brisbane-based bank, one of the three remaining regional banks of any size left after the recent consolidation in the industry, saw its bad debt charges jump from $104 million just over a year ago to $200.5 million.

http://www.smh.com.au/business/bad-debts-hit-bank-of-queensland-profit-20111013-1lly5.html

:dead: is the property market.
 
Labour has introduced a members' bill that would allow only New Zealand citizens and residents to buy any existing house, flat or apartment

And while the chances of the bill ever becoming law are slight in the extreme - it first has to be picked from the ballot and then once given a first reading would likely be immediately torpedoed by the Government - any debate of the issue in the house would sure to be lively and emotive.

The issue of foreign ownership has become a heated one this year as house prices, particularly in Auckland, have headed skyward. Anecdotal tales have abounded about large numbers of offshore based buyers snapping up properties, but there is little hard evidence to either support or refute such tales.
 
Low interest rates are gaining traction in the housing industry.

AUSTRALIAN housing construction activity has expanded for two months in a row for the first time since 2010, in a sign that low interest rates are slowly working.

The Australian Industry Group/Housing Industry Association's performance of construction index (PCI) rose by 0.8 points in November to 55.2.

The reading for October rose above the key 50 level, showing expansion for the first time in more than three years.

In November, new orders ran at the strongest pace in eight years while deliveries from suppliers also improved, taking the PCI reading to the strongest point since April 2010.

Ai Group public policy director Peter Burn says the rise in construction activity last month shows low interest rates are slowly working.

"The long-awaited re-balancing of the domestic economy may be getting underway on the back of low interest rates and a lift in business and household confidence," he said in a statement on Friday.

"However, given the extent of the slump in residential and commercial construction over more than three years, the expansions recorded in October and November are from a low base and we are still some months from a convincing recovery."

HIA chief economist Harley Dale said tight credit conditions were an "avoidable roadblock" to a construction-led recovery in the economy. :banghead:

"To sustain that recovery and return new home building to strong levels requires closer attention to policy reform than is currently evident," he said.

http://www.news.com.au/business/bre...on-expands-again/story-e6frfkur-1226776976122

Last thing we need is a change in the lending criteria ..... do they never learn?
 
Might be? His laissez-faire capitalism certainly worked for the USA :rolleyes:

I mean that's it really isn't it? Create a debt fueled bubble based on lax lending standards (ninja etc.) then offset the risk by packaging it all up and selling it to overseas investors (so it takes the rest of the world to the brink) and domestic pension funds (so it forever enslaves the retirees)...

What a brilliant idea. :banghead:

So Australia has a housing bubble?;) Maybe a little frothy in places...
 
I mean that's it really isn't it? Create a debt fueled bubble based on lax lending standards (ninja etc.) then offset the risk by packaging it all up and selling it to overseas investors (so it takes the rest of the world to the brink) and domestic pension funds (so it forever enslaves the retirees)...

What a brilliant idea. :banghead:

So Australia has a housing bubble?;) Maybe a little frothy in places...

Alan Greenspan April 2005 speech. Love how he praised subprime loans and the innovative way banks were lending money to "immigrants" (read suckers)

"Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country ... With these advances in technology, lenders have taken advantage of credit-scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers. ... Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending; indeed, today subprime mortgages account for roughly 10 percent of the number of all mortgages outstanding, up from just 1 or 2 percent in the early 1990s"

He also yanked the interest rate lever on ARM's from 1% to 5.25% in less than 2 years. No regulatory body to control ADI's lending practices *HEY PRESTO* .... hello Mr Housing Bubble.

mr housing bubble.jpg

Greenspan was also against the regulation of derivatives, preferred a free market ideology as well as self-interest of lending institutions to protect shareholder's equity (BWAHAHAHHAHHWAAHHAHA) Matt Taibbi described the Greenspan put and its bad consequences saying: "every time the banks blew up a speculative bubble, they could go back to the Fed and borrow money at zero or one or two percent, and then start the game all over", thereby making it "almost impossible" for the banks to lose money. He also called Greenspan a "classic con man" who, through political savvy, "flattered and bull****ted his way up the Matterhorn of American power and ... jacked himself off to the attention of Wall Street for 20 consecutive years."

Could this happen in Australia? Nope. Will some people get ejected from their homes due to mortgage stress? You betcha. Mebbe they shouldn't have got the new car to go with the new house !!! :banghead:

2002-05-09%20May%20Interest%20rates%20to%20hit%20king%20kong%20504.jpg
 
lol....great post.....You're like the TH of the Property Thread.....After the GFC everyone is so gun shy that anything remotely looking like a bubble and they're all calling doomsday...

We will have another bubble, chances are the the next one might be bigger, but only a few will be able to pick the timing...in the meantime carry on carrying on.
 
Bottom cartoon depicts Howard, Costello and me old mate Macfarlane. Seems they had the same issues we are about to face yet again. Interest rate gun at the ready to tranquilize the asset increase ;)
 
lol....great post.....You're like the TH of the Property Thread.....After the GFC everyone is so gun shy that anything remotely looking like a bubble and they're all calling doomsday...

We will have another bubble, chances are the the next one might be bigger, but only a few will be able to pick the timing...in the meantime carry on carrying on.

I think a lot of it is terminology. The word bubble is very emotive - overvalued is probably less likely to cause a stir but amounts to the same thing. A lot of assets are overvalued at present.

But, there really are more 'bubbles' or overvalued assets recently, since there is so much liquidity sloshing around from exporting nations and other reserve accumulators, quantitative easing in the US and Japan - but there is no real productive investment to meet the demand of all this saving - we have too much excess capacity already and not much demand for stuff. In the western world we can't take on more debt, and the surplus countries have policies that restrict consumption. The end result is that it just squeezes up asset prices because it has nowhere else to go and needs to find a home.

At ZIRP in a world with basically no real yield, everyone is betting on price increases for gains rather than an income stream. There are only a few true speculative-mania bubbles at the moment, like bitcoin, but that doesn't mean that everything is at fair value. The expected return on US stocks given it's current valuation is about 2% or less for the next 10 years. Maybe that's not a bubble but it's definitely not undervalued. Aussie stocks are closer to fair value, but the mining cap-ex unwind has barely even started so who knows.
 
I have been following this "housing bubble" for quite some time (since 2007) and am very disappointed in how it has persisted. There was an opportunity for the bubble to burst after Rudd's victory, although that was certainly scuttled with his boost to first-home owner's grants and the RBA's decision to cut (and maintain) interest rates at record lows.

I think it's time to admit that I've backed the losing side and that expensive housing is here to stay.
 
I have been following this "housing bubble" for quite some time (since 2007) and am very disappointed in how it has persisted. There was an opportunity for the bubble to burst after Rudd's victory, although that was certainly scuttled with his boost to first-home owner's grants and the RBA's decision to cut (and maintain) interest rates at record lows.

I think it's time to admit that I've backed the losing side and that expensive housing is here to stay.

It's not all doom and gloom, banks are lifting their home loan interest rates.
The squeeze will come.lol
http://www.propertyobserver.com.au/mortgages/should-you-fix-your-mortgage-now-experts-have-their-say

The banks would be given the wink before the plebs are told.
 
It's not all doom and gloom, banks are lifting their home loan interest rates.
The squeeze will come.lol
http://www.propertyobserver.com.au/mortgages/should-you-fix-your-mortgage-now-experts-have-their-say

The banks would be given the wink before the plebs are told.

Too late my friend ... too late. Posted this awhile back.

Got nothing to do with the government of the day. Historically low interest rates, unemployment steady, job security back to normal levels, CPI within target range of the RBA, pent up demand, amount of investors back in the market place, banks offering 3 year rates at 5.8% (which have just gone up 0.06% btw *interesting*) as well as quite a few "other" market indicators. But you know all this right?

Rates haven't moved. Banks are profiteering. :banghead:
 
Hi TS,

I've seen you post a few times in this thread but am having a bit of trouble trying to figure out what your stance on the housing issue is.

Too late my friend ... too late. Posted this awhile back.



Rates haven't moved. Banks are profiteering. :banghead:

Are you trying to say that the banks have no need to increase rates? and that there won't ever be a squeeze?
 
Hi TS,

I've seen you post a few times in this thread but am having a bit of trouble trying to figure out what your stance on the housing issue is.

Are you trying to say that the banks have no need to increase rates? and that there won't ever be a squeeze?

My stance is that property is just another money making venture with pitfalls and nuances that are quite easy to quantify once you have learned the rules of property investing. The market has a readable cycle and it depends as to when and where you buy will dictate as to how much money you will make or lose. Preferably the first part and not the second. ;)

Banks are currently profiteering as wholesale funding have not increased. The banks margins on the other hand are increasing exponentially more than their costings. Yes there will be a credit squeeze. We have just had one whereby the banks have already tightened their lending criteria. There are now calls from certain sectors of the industry for the banks to loosen their lending criteria. I am dead against this as then there will be a liquidity problem within the housing sector.

Mainly the 95% LVR young people who have recently purchased in a non performing area. It is not their fault, it is because they do not know any different. Usually serviceability is income based and usually compounded by dual incomes. Only takes one of the borrowers to either lose their job, get pregnant, injure themselves blah blah blah and *HEY PRESTO*, mortgage stress. Or now they have their lovely new house they want all the trappings = 60 inch LCD TV with surround sound and the leather recliners in the lounge room all bought on the never never plan. Or suddenly the perfectly good car they had is now replaced with a $700 / month HP as Holden had a sale on.

So not necessarily the banks fault the consumer has racked up the credit cards and the personal loans or that one of the borrowers has lost their job/pregnant/injured etc. Interest rates will rise. I have predicted March/April 2014 but not necessarily because the wholesale funding costs have risen. I did say it would be bank driven. ANZ is offering a 10 year rate of 7.18%. What does this tell you?

I have posted a lot more information over a 4 year period. Maybe have a look at some of my previous posts to see exactly where my stance is. :cool:
 
And there off and racing Ladeeeeeez and Generalmen,

"It's a comfort to the Reserve Bank that low interest rates are working and with no interest rate rise on the horizon any time soon, you'd expect that housing finance approvals and other housing indicators continue to trend higher in coming months."

JP Morgan economist Tom Kennedy said he was encourage by the increases in housing finance for the purchase of new dwellings, and the construction of dwellings.

"When you look at the breakdown it was fairly broadbased," he said.

"Construction loans, which is the one that the Reserve Bank of Australia has been targeting, trying to get a bit of a lift in that sector, they were up about one per cent and that is its third consecutive monthly increase, there are tentative signs of life in that sector.

http://www.dailytelegraph.com.au/bu...s-rose-10-in-oct/story-fni0xqe3-1226779678338

housing bubble.jpg
 
Patchy with a chance of showers. Overall prognosis is with low rates only just starting to kick in and unemployment and CPI in RBA's target range (dollar still has got to drop under 90 :2twocents) then foreseeable future of Australian property prices is as I predicted. 3 year = Peak or near peak of cycle.

The national housing market moved into a growth phase throughout 2013, with combined capital city home values 7.9 per cent higher than they were a year ago, according to RP Data.

The RP Data Quarterly Review shows that house prices rose 8.2 per cent over the first 10 months of 2013.

However, although home values are broadly climbing across the combined capital cities, growth has been fuelled by a large rise in values across only a handful of cities.

The annual change in values has ranged from 11.6 per cent in Sydney to minus 0.7 per cent in Hobart. Sydney, Melbourne and Perth have each recorded annual value growth of more than 6.5 per cent, while values in all other cities have either fallen or risen by 3.5 per cent or less.

Combined capital city home values are now 2.0 per cent higher than they were at their previous peak. But this is being driven entirely by Sydney where values are 9.1 per cent higher than their previous peak. Across all other capital cities, values remain lower than they were at the time of their respective market highs.

In addition, the number of property transactions has risen over the year as overall sentiment has improved.

Over the three months to August 2013, there were 80,310 capital city house and unit sales. In comparison to the same three-month period in 2012, sales volumes are 20.1 per cent higher with a more significant lift in house sales (22.3 per cent) as opposed to unit sales (15.4 per cent).

Across each capital city, home sales are higher now than they were 12 months ago.

Given the improvement in both the RP Data Mortgage Activity Index and housing finance data, RP Data expects a further rise in transaction volumes over the coming months.

http://www.propertyoz.com.au/Article/NewsDetail.aspx?p=16&id=8685
 
"There had been further signs of the stimulatory effects of low interest rates, most notably in the housing market, and additional effects were still likely to be coming through," the RBA said.
"At the same time, inflation remained within the target.
"While the exchange rate had depreciated over the month, members agreed that it remained uncomfortably high and a lower level would likely be needed to achieve balanced growth in the economy."

http://www.thebull.com.au/articles/a/42883-the-cash-rate-cut-door-is-still-open.html

Dollar below 90 cents ... check
Lower interest rates having effect ... check
Banks softening lending practices ... check
RBA thinking about cutting rates again ... check
CERTAIN areas evidencing 20% + growth ... check

Employment is trending higher/lower/uncertain ... no check

Oh dear ..... here we go again ! :eek:
 
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