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As an example of a possible approach, if the company tax rate were lowered by even just 1% for companies with an Australian head office located outside the big cities then that alone would do wonders for regional development and fixing the infrastructure problems in the major cities.
My suggestion was/is that their should be payroll tax concessions/elimination for companies employing >x number of employees at the same site outside capital cities. I remember years ago when I last "worked" in Sydney in IB we had so many admin staff, who performed back office functions, that trundled in 1-2 hours by train to work in the CBD when they could just have easily done it in Albury/Port Macquarie/Newcastle/Bowral etc etc. There was absolutely no reason for them to be in CBD.
The Jollys, who polarised viewers more than any other team this season, pocketed $835,000 over reserve for their pad, which they renovated room by room over 10 weeks. They also earned themselves a $100,000 winner's cheque.
Last year, they were distraught after collecting just $10,000 for months of hard work on the Glasshouse series in Prahran
Like most of reality television, the screen-time version is a skewed version of real life. Strip back The Block branding and the outcome would have been entirely different.
Buyer's agent and valuer Greville Pabst, of the WBP Property Group, who also appeared as a judge on the show, said the show's reserves "bear no relevance to reality".
http://www.globalpost.com/ said:The Reserve Bank of New Zealand (RBNZ) said that property investors in Auckland, home to a quarter of New Zealand's population, would require a deposit of at least 30 percent when seeking a mortgage from Oct. 1.
http://www.nzherald.co.nz/ said:Two-year ownership requirement and curbs on foreign buyers announced as Govt moves to cool the Auckland market.
Meanwhile over the ditch the Kiwis have hit the panic button.
And new rules for foreign buyers and CGT.
Amazing what a reserve bank can do when they are serious.
Meanwhile over the ditch the Kiwis have hit the panic button.
And new rules for foreign buyers and CGT.
Amazing what a reserve bank can do when they are serious.
Lending for investment properties appears to have suddenly tightened, as the banking regulator's efforts to rein in the sector appear to be succeeding.
Mortgage brokers are reporting credit conditions in Australian housing lending market have become a lot tougher in the past two weeks according to CLSA's leading bank analyst Brian Johnson.
Mr Johnson said recent discussions with broking contacts pointed to banks cutting discounts on investment loans and demanding tougher scrutiny on borrowers' ability to repay their debts.
The crackdown comes only days after data was released showing mortgages had soared to a new record high of $31.3 billion in March.
Ask and ye shall receive .. or is it that they are just copying NZ ?
Investor home loans tighten as regulator APRA clamps down
http://www.abc.net.au/news/2015-05-18/investor-home-loans-tighten-as-regulator-clamps-down/6477134
Where is robots when we need him? Is that a Minsky graph?
Minsky proposed theories linking financial market fragility, in the normal life cycle of an economy, with speculative investment bubbles endogenous to financial markets. Minsky claimed that in prosperous times, when corporate cash flow rises beyond what is needed to pay off debt, a speculative euphoria develops, and soon thereafter debts exceed what borrowers can pay off from their incoming revenues, which in turn produces a financial crisis. As a result of such speculative borrowing bubbles, banks and lenders tighten credit availability, even to companies that can afford loans, and the economy subsequently contracts.
I've seen it happen before in the last downturn, banks closing in on businesses unfairly causing all sorts of problems.
Let's face it the banks are in control, if they tighten the money supply values will go down and the banks will want people to top up their equity....and down it goes from there.
The increase in capital requirements is likely to result in higher mortgage rates, as the banks charge more to recoup the costs of holding more capital, to maintain their high returns.
Deutsche Bank analyst Andrew Triggs said the banks would raise capital by retaining profits and reprice home loans to protect their profits.
"With an oligopoly market structure dominated by four large rational players, we think the banks will eventually reprice their mortgage books – we estimate 20 to 30 basis points on average required to hold returns on equity flat," he said in a note to clients.
APRA forcing the big 4 banks to have stronger capital ratios would dilute the banks returns on mortgages opening up the way for regional and prudential banks to start risky lending practices??
Advanced accreditation and technology
The rate of change won’t slow, said Johanson, hence the bank has invested in Basel II advanced accreditation and new digital and online technologies.
Hirst said the bank needs to have a pristine data set to achieve accreditation. That improved data would bring a better customer experience through the bank having better conversations with its customers. It must also revamp its risk models which would ensure the bank continues to manage its risks well, consistent with its good experiences in the past.
The third advantage of advanced accreditation lies in capital efficiency and how the bank thinks about its capital.
“They all add up to putting us on a much more level playing field,” said Hirst who expects it will take another two years to achieve that accreditation, if everything goes to plan.
Currently the bank is on the standardised approach meaning it must assign a 35 per cent risk weighting to home loans on its book. He couldn’t put a dollar value on the benefit of moving from the standardised approach to the advanced model but envisaged it would enable Bendigo and Adelaide Bank to reduce the risk-weighting on its home loans to similar levels as the major banks of between 15 and 20 per cent.
“To be fair, the major banks do a lot more around modelling their risk and managing their risk. That is the benefit for taking that more robust approach.”
But smaller players such as credit unions can’t afford to go through that process. For Hirst the question is whether the difference between the risk weightings under the standardised and advanced models is appropriate.
ANZ Bank said it would no longer offer discount interest rates to new property investors who did not already have a mortgage over their own home with the bank. National Australia Bank and Commonwealth Bank have also reduced the discounts offered to new investor borrowers. CBA also told mortgage brokers last week it would scrap a $1,000 rebate for new investor borrowers.
Westpac has not changed its loan-to-valuation rules or announced changes to pricing, but this month it said it would apply tougher tests to new property investor borrowers when assessing how they would cope with higher interest rates. It is tightening its lending criteria for "non-resident" home lending, suggesting foreigners will find it harder to borrow.
Neither fund manager said they were concerned about the idea of a property bubble or swaths of Australians defaulting on their mortgages, unless there was a significant rise in unemployment rates.
"I've been calling the death of the property market for a while; on the metrics of average income to property prices it's at a very high level," Mr Skamvougeras said. "But you're not going to see a property crash without an employment crash."
*GOSH* ... has anyone been paying attention??
JOBS JOBS JOBS ....... IS THE TRIGGER POINT !!!!!!
Sooooooooooooo once again for comedy purposes only. Residential prices in Australia will fall at a faster pace due to job losses. But I only have been banging on about this fact for a couple of years now.
Good to see Steve Keen followers as well as the man himself have moderated their views on the percentile of possible deflation of property.
Let the hatchet job begin.
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