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The future of Australian property prices

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Mofra said:
How is this news? Many lenders have been doing it for years, and LMIs look at these issues as well when deciding to grant LMI to an applicant.

Our credit criteria has always been much more stringent than the US.
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Ummmmmmm not sure where you are getting your intel from Mofra but new laws on July 1st will be discrimantory towards this kind of dealing. Banks look at Debt Servicability Ratios and Surplus income as well as LVR's etc etc. PLUS the pregnant thing?? Does this mean that if you are a woman and it is likely that you are of a conceivable age therefore the banks can now say "Sorry we cannot use your income to assess this dealing as you have a bun in the oven?" WTF ?

News actually came from here http://www.news.com.au/money/bankin...tching-our-lives/story-e6frfmcr-1225857910392

Totally agree with this statement Mofra The big 4 Aussie pillars of money are nothing like the US counterparts due to VERY LITTLE EXPOSURE TO SUB PRIME LENDING ........ which is what started the GFC meltdown!! But you all knew this right?
 
More pressure on house prices ahead. You can't say house prices are trading on fundamentals, unless of coarse you think that government bribes are fundamental. lol


Mortgage applications plunge

Residential mortgage applications plunged in the March quarter after the government’s first home owner’s grant was wound back to pre-financial crisis levels, a survey found.

Total mortgage applications fell 15 per cent in March quarter compared with the corresponding period a year earlier, the quarterly consumer credit demand index by consumer credit check company Veda Advantage showed.
 

No idea whether there will be a crash, correction or stagnation (expect one of these though). But this article tells me absolutely nothing. The nos of applications fell (no sh*t) vastly reduced FHBG will do that. Of greater interest is the amount of money that has been reduced (if any).

A good graph would be one which excluded FHB completely and re-adjusted everything over the past 12 months accordingly. We might get some real data then. Fanciful though, as I think we all can agree Real Estate data is not very transparent or reliable. This applies on both the up and down side.
 
Anyone considered that 12 months ago that interest rates were at historic lows, property prices were rising and the FHB grant was part of the mix. Fast forward 12 months later and the rates are rising, prices have recovered greater than the highs of the 2007 summer and the FHB has been reduced.

No wonder they amount of loans have declined?

The strong economy has helped drive up house prices, with the increases exacerbated by lags in housing construction. The nation’s population is on track to swell to 36 million by 2050 from 22 million, potentially straining housing affordability even more.

“The reality in many regions and cities in Australia is that affordable, well-located land is not available or abundant,” said HIA senior economist Ben Phillips. “Planning restrictions, higher taxation on new housing relative to existing dwellings, labour shortages, and onerous regulation biased toward new housing all add to the problem.”

Hmmmmmm ...... stagflation?
 
hello,

great day brothers, thanks trainspotter kind words

just putting in trying to help out the community

i put my hand up for a new investment loan which will probably go through in next round of stats

in my town Melbourne, just see soooo much potential in the regional towns/suburbs namely Geelong, Ballarat, Bendigo, Melton, Corio or anything else where the train stops

slow and steady

for people working in exhibition st, docklands, st kilda rd, collins st you into city in 1-1.5hr with a ticket that also allows you travel on the metro network

houses for 180-230k, 600-800sqM and probably more services than the new estates on the fringes

things like schools, parks, skate parks, hospitals etc

this goes out to you dowdy

thankyou
robots
 

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Probably one of your best/ most informative post i've seen you do. Lets celebrate!

:bananasmi :jump::bananasmi



I'll disagree. There's plenty of land within 30km from the city and if you got the dough, you can buy 30, 45 even 200+ acre blocks. I'm guessing it goes back to government and it's planning restrictions but they can easily back-flip on those decisions.
 
hello,

its official Satanoperca, thread back on track man

thankyou
robots
 
robots said:
hello,

its official Satanoperca, thread back on track man

thankyou
robots
Click to expand...

Robots,

You have been posting A LOT on this thread over the past week or so, ever since:

1.March quarterly falls in RE prices
2.Falls in borrowing
3.Recent tightening in bank lending criteria
4.Government u-turn against foreign purchase requirements
5.Looming Tax reforms
6.Looming further interest hikes
7.Increase in inflation

Thanks for your contributions
 
robots said:
hello,

its official Satanoperca, thread back on track man

thankyou
robots
Click to expand...

Cheers, you recent post was helpful, informative and back on track.

Thank-you

& your portrait is splendid. Always nice to see a man with a smile on his face.
 
Still does not detract from the common theory that house prices are continuing to rise in Australia.

Looking for evidence of prices falling thus far and have not seen too many stats or pie graphs or charts or ?
 
Not sure if this is a Victoria specific grant but on June 30th the First Home Bonus will be removed.

The Bonus is currently $11,000 for new homes and $2,000 for established.

So in Victoria for a FHB purchasing a new home, the grant will be reduced from $18,000 to $7,000 for building contracts signed after June 30.

I doubt the $2k reduction for established purchases will have any effect on auction clearance rates.

cheers
 
My information is from 8 years in the industry as a lender/credit manager at both securitised and bank lenders.

With the exception of the pregnancy, everything else listed in the initial article is something that has been taken into account for years. In some circumstances if there was a pregnancy involved in a dual application, we'd include the unborn child as a dependant as part of the serviceability criteria.

Not sure what you're getting at here - the sub prime lending exposure destroyed the securitised lending market in Australia and reduced competition to the bank lenders - worth noting that LMI lending criteria was tightened months before the GFC even hit.
 

Congratulations Mofra ! You have your finger on the pulse. I started in the industry as a mortgage originator in 1992 and have never heard of a bank knocking back someone because they liked a flutter on the TAB. But then again I am not sure if any of my clientelle had a gambling problem? Oh well ... splitting hairs again. I do remember that Keystart Loans would only qualify 50% of the income of the female applicant due to her propensity to get pregnant and also banks would not lend you money passed the age of 65. Aaaaaaaaaaahhhhhh the good "ol days eh ! This has all changed though. No discrimation allowed etc etc Politically Correct bulldung.

Not going naywhere with the GFC meltdown, banks in Australia had little exposure to subprime toxic debt so therefore were not slammed like the lenders in America like Fannie Mae and Fannie Mac (weird names for lenders BTW) was what I was pointing out. YES competition for our big 4 to borrow money from to onlend to the little aussie battlers was reduced. No question here on this matter.

Anyway back to the topic of property prices. Living the dream man, just living the dream.
 
Glad to have someone who knows what they're talking about contributing!

The age 65 rule was still in vogue just a few years ago at one major bank I worked for

We actually had to shorten loan contracts so they wouldn't expire past the date the eldest borrower reached age 65. Never mind the industry average loan term was under 7 years at that stage.

FWIW if serviceability was borderline we would look at the spending habits of a client and if there were multiple ATM withdrawels/cash advances in a single day from an RSL or Leagues Club, that would be taken into account. The excuse was always "serviceability criteria" rather than "I think your client may have a gambling problem", safer reason to give
 
hello,

good day brothers, Melbourne killing it again

well been a great couple of weeks, settlement on the 6th May 2010

CBA and solicitor got it all under control, just fantastic,

thankyou
robots
 

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UBIQUITOUS said:
1.March quarterly falls in RE prices
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Were there? ABS stats out soon but APM has national median UP by 3.1% for Q1 2010?? All cities median price up except Brisbane which was basically flat.

http://www.smh.com.au/business/sydn...but-rivals-are-closing-gap-20100428-tsfj.html

2.Falls in borrowing
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Really? Are you sure it's just not the rate of growth in borrowing that is falling? Over-all borrowing has still been increasing every single month. A slowing in the rate of borrowing will slow price growth ( we had 13% just last year remember!), but it would have to drop off a lot more to stop price growth at this point. Also o/s cash that may or may not be flowing into property does not show up in the national finance stats.

3.Recent tightening in bank lending criteria
Click to expand...

ANZ has just loosened - LVR back up to 95% for existing customers.

4.Government u-turn against foreign purchase requirements
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They can still buy just have to get a FIRB rubber stamp, and student vias holders don't get the $300k cap back that used to apply. The whole things was a storm in a tea-cup anyway with the impact of the reversed changes being massively over-stated IMO.

5.Looming Tax reforms
6.Looming further interest hikes
7.Increase in inflation
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5 and 6 are probably the only true property price head-winds in your list. Although I wouldn't be holding my breath for NG changes.

On 7, Rising inflation will only ultimately feed back into property prices big time (ie make them rise).

Cheers,

Beej
 
Beej said:
Rising inflation will only ultimately feed back into property prices big time (ie make them rise).
Click to expand...
Rising inflation would also feed into deposit rates and ultimately bond yields thereby demanding a greater yield from other investments.

This could initially trigger a correction in other asset classes including property.
 
Beej said:
Were there? ABS stats out soon but APM has national median UP by 3.1% for Q1 2010?? All cities median price up except Brisbane which was basically flat.
Click to expand...
Might be referring to the REIV figures(Q1 -2%)

And here's the chart, just because Robots loves seeing it:


cheers
 
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