When will huge inflation in Australia occur to wipe down the debts?

[sydboy007]

Another question why did government allow the private and household debt to become so large that it's heading towards 4 trillion?

Surely they are now in the zone of hating the people and getting paid off by banks to do that to turn the people into debt slaves.

Are we happy to be debt slaves?

Not quite sure how old you are but I remember when Howard and Costello were in opposition and they had their debt truck wandering around Australia as they were very very concerned about the private sector debt levels. Strangely, once elected they never mentioned it again. In 1996 mortgage debt levels to GDP were around 31-32%. they're now over 90%. Household debt levels doubled under Howard and Costello, and that was really the economic miracle. A debt binge that pumped up house prices and destroyed productivity in the economy (put simply if the cost of land in Australia is much higher than the same land in a different country then we will have higher input costs, hence lower productivity).

offshore funding is now roughly 50% of all credit. Imagine what a closing of markets like during the GFC will do to us. With Govt debt now on an unsustainable increase their guarantee may not hodl as much weigth as it did during the GFC.

Housing has sucked the life out of the country. Business credit has pretty much stagnated since 2008 while mortgage debt has ballooned to be 50% higher. Ponzi credit, but how many greater fools are left out there?

As to are we happy to be debt slaves? The answer has to be a resounding yes. No one is forcing people to get into debt, especially mortgage debt. No one is pushing for meaningful reforms to land zoning and sorting out issues around land banking and stamp duties making buying and selling property expensive. There's like 15+ years of land on the urban fringe that could be developed, but why would you bother when restricting supply is more profitable than developing? No need to fight the BANANAs when you just horde land.

While initial repayments on new mortgages are lower than the late-1980s and early-1990s, they remain well above the 40-year average. And remember, these high debt loads will still be around in a decade, thanks to low inflation and anaemic wages growth. In terms of disposable income it's possible mortgage repayments will increase, leaving less money for supporting economic activity.

 

[Ald123]

Principal place of residence

Or

Pizz poor result

Ok so is your opinion that it's better to buy a house where you live in it and forget about the rental? Officially that property is my principal place of residence. But o won't be living in it for the next 3 years, and then I either have to move back into it or sell it then in order to avoid capital gains tax being applied to it when I sell it.


The break costs of my fixed loan is $25000, either way I have to take a loan to pay those break costs. So if I want to sell it or refinance I have to pay a penalty of $25000.

 

[Ald123]

Not quite sure how old you are but I remember when Howard and Costello were in opposition and they had their debt truck wandering around Australia as they were very very concerned about the private sector debt levels. Strangely, once elected they never mentioned it again. In 1996 mortgage debt levels to GDP were around 31-32%. they're now over 90%. Household debt levels doubled under Howard and Costello, and that was really the economic miracle. A debt binge that pumped up house prices and destroyed productivity in the economy (put simply if the cost of land in Australia is much higher than the same land in a different country then we will have higher input costs, hence lower productivity).

offshore funding is now roughly 50% of all credit. Imagine what a closing of markets like during the GFC will do to us. With Govt debt now on an unsustainable increase their guarantee may not hodl as much weigth as it did during the GFC.

Housing has sucked the life out of the country. Business credit has pretty much stagnated since 2008 while mortgage debt has ballooned to be 50% higher. Ponzi credit, but how many greater fools are left out there?

As to are we happy to be debt slaves? The answer has to be a resounding yes. No one is forcing people to get into debt, especially mortgage debt. No one is pushing for meaningful reforms to land zoning and sorting out issues around land banking and stamp duties making buying and selling property expensive. There's like 15+ years of land on the urban fringe that could be developed, but why would you bother when restricting supply is more profitable than developing? No need to fight the BANANAs when you just horde land.

While initial repayments on new mortgages are lower than the late-1980s and early-1990s, they remain well above the 40-year average. And remember, these high debt loads will still be around in a decade, thanks to low inflation and anaemic wages growth. In terms of disposable income it's possible mortgage repayments will increase, leaving less money for supporting economic activity.

A really good analysis. I am 40.

 

[tech/a]

Ok so is your opinion that it's better to buy a house where you live in it and forget about the rental? Officially that property is my principal place of residence. But o won't be living in it for the next 3 years, and then I either have to move back into it or sell it then in order to avoid capital gains tax being applied to it when I sell it.


The break costs of my fixed loan is $25000, either way I have to take a loan to pay those break costs. So if I want to sell it or refinance I have to pay a penalty of $25000.

You've made a lot of assumptions from an answer to what is PPR?

You have to do a risk analysis and come to a conclusion from that.
Do it with an accountant who understands property and can run cost evaluations on
each option.

 

[sptrawler]

You have to do a risk analysis and come to a conclusion from that.
Do it with an accountant who understands property and can run cost evaluations on
each option.

+1, there has never been a better time to pay down your PPR, it would be really interesting to hear what a property analyst had to say.

It certainly wouldn't be as black and white, as it is, when interest rates are high.IMO