Australia housing bubble

[T3rminator]

Lots of focus on housing loans. Curious to know how business loans are structured? Do these rate rises hit business loans with the same effect?

[AlanD]

Originally Posted by T3rminator

Lots of focus on housing loans. Curious to know how business loans are structured? Do these rate rises hit business loans with the same effect?

Just looked at the NAB site, and was surprised to see that those business loans advertised in the header were all fixed rate loans, but at rates that, in most cases, approached 10%.

RBA increases do not cause alteration to fixed rate loans, but you would expect that the fixed rate the bank advertises would increase after an RBA rate rise on any new business loan arranged - and stay at that rate for the duration of the loan even if the RBA were to drop the prime rate in the future.

Does this help?

Cheers

[Syndrome]

Remember what the RBA said in late 2021? These guys are totally clueless!

https://www.abc.net.au/news/2021-11-...-2024/13634124

[FTE217]

Labour/Greens fav ABC article haha

[Polyal]

Originally Posted by Syndrome

Remember what the RBA said in late 2021? These guys are totally clueless!

https://www.abc.net.au/news/2021-11-...-2024/13634124

I could be wrong but IIRC my year 10 economic class noted that when inflation increases the main way to control or arrest it is via rates...not sure why this is surprising?

[b0son]

Agree. My area is what I would call upper working class, but not necessarily affluent. Lately, I've noticed just how many have new Mercs, Teslas, BMWs in their driveways. Not exactly the traditional socioeconomic area for it. People have clearly taken advantage of low rates and equity growth to load up their mortgage, and are now crying poor when both of those things went the opposite way.

Those people, I dont feel sorry for.

[FoxtrotGolfXray 5.0]

Originally Posted by Polyal

I could be wrong but IIRC my year 10 economic class noted that when inflation increases the main way to control or arrest it is via rates...not sure why this is surprising?

Not really sure what Syndrome expected. Was it reasonable that the RBA predicted the ongoing effects from the Covid pandemic and a war breaking out between the Ukraine and Russia and al of the associated global energy market impacts that had (and continues to have)? Unreasonably high expectations?

If you think they should have done better, Syndrome, why don't you give us a prediction for two years time and we'll come back and critique how well you've done?

[T3rminator]

I think the point is, the bloke being paid $1m a year to do a job, shouldn't have made a prediction / assurance 3 years out, when he knew full well he didn't know what next month would bring.

Imagine being paid $1m to do a job, get it so wrong, and have no consequences.

And does this pass the pub test?

https://thenewdaily.com.au/news/poli...rates-meeting/

https://www.afr.com/policy/economy/l...0230210-p5cjko

[Citroënbender]

I think some of this popular agitation is an extension of overseas-derived movements that call for single political figureheads to have the absolute last say on all matters of state and country.

[FoxtrotGolfXray 5.0]

Originally Posted by T3rminator

I think the point is, the bloke being paid $1m a year to do a job, shouldn't have made a prediction / assurance 3 years out, when he knew full well he didn't know what next month would bring.

Imagine being paid $1m to do a job, get it so wrong, and have no consequences.

And does this pass the pub test?

https://thenewdaily.com.au/news/poli...rates-meeting/

https://www.afr.com/policy/economy/l...0230210-p5cjko

Meh, people should know the limitations of someone making those sorts of claims. It's based upon what they know at the time and anything can change at the drop of a hat. If people aren't informed enough about those limitations, then they shouldn't be listening to his advice in the first place.

Nothing but a media beat up, IMHO.

It'd be like relying on the BoM to predict the weather a few days out and then crying fowl when they got it wrong. That's why it's called a forecast.

to calculate or predict (some future event or condition) usually as a result of study and analysis of available pertinent data

[T3rminator]

Originally Posted by FoxtrotGolfXray 5.0

Meh, people should know the limitations of someone making those sorts of claims. It's based upon what they know at the time and anything can change at the drop of a hat. If people aren't informed enough about those limitations, then they shouldn't be listening to his advice in the first place.

Nothing but a media beat up, IMHO.

It'd be like relying on the BoM to predict the weather a few days out and then crying fowl when they got it wrong. That's why it's called a forecast.

Semi valid. Except, he isn't just a weather man. He is meant to be one of the most qualified person in the country to make these calls, that's why we pay him $1m a year. People are supposed to listen to this man.

Otherwise we could just get some graduate economist, pay him $100k, and he can just calculate rates based on inflation.

[Citroënbender]

How much does that Pommy sop at the helm of our BOM take home? The ‘kwit who was more interested in re-branding through the middle of a natural disaster.

I have complete confidence in Mr Lowe respective to discharge of his responsibilities in this position.

[FoxtrotGolfXray 5.0]

Originally Posted by T3rminator

Semi valid. Except, he isn't just a weather man. He is meant to be one of the most qualified person in the country to make these calls, that's why we pay him $1m a year. People are supposed to listen to this man.

Otherwise we could just get some graduate economist, pay him $100k, and he can just calculate rates based on inflation.

I'm not sure how the amount of money we pay someone is supposed to make a forecast any more legitimate? They may have better education, better experience, better access to data, but at the end of the day, it's still a prediction of a future outcome based around all known data at that point in time. Future events will always have an impact on that forecast, no matter how much we pay a person.

[Polyal]

Originally Posted by FoxtrotGolfXray 5.0

Meh, people should know the limitations of someone making those sorts of claims. It's based upon what they know at the time and anything can change at the drop of a hat. If people aren't informed enough about those limitations, then they shouldn't be listening to his advice in the first place.

Nothing but a media beat up, IMHO.

It'd be like relying on the BoM to predict the weather a few days out and then crying fowl when they got it wrong. That's why it's called a forecast.

This, you cant trust anyone with predicting the future...thats flat out crazy.

Know your budget, work with a contingency and dont blame others.

[Polyal]

Originally Posted by T3rminator

Semi valid. Except, he isn't just a weather man. He is meant to be one of the most qualified person in the country to make these calls, that's why we pay him $1m a year. People are supposed to listen to this man.

Otherwise we could just get some graduate economist, pay him $100k, and he can just calculate rates based on inflation.

Nope sorry, his just the puppet face there is a whole bunch of them with no crystal ball.

[T3rminator]

I'd like to have some of you as my boss.

[FTE217]

Originally Posted by Polyal

This, you cant trust anyone with predicting the future...thats flat out crazy.

Know your budget, work with a contingency and dont blame others.

Thats pretty much the best way to look at it for no cost at all

Live to your means - even in the best of times for you never know whats around the corner.
A splurge now and then or leap is okay as long as you have enough to back yourself up, not over do it whereas so so many have like b0son posted.

I grew up in a pretty good area but my parents could only afford being on the cheap side of it.
It was good grounding, whereas you see people with new cars,fancy large homes with blinds down.
Stories came out people like them were so hocked up hardly own anything as long as it looks as if they did.
The cycle still occurs today.
We've lived frugal, not OTT but have everything we need and more, own the lot and mortgage is zack.
Who's more worried about every single cent and where it goes and the economy.
Live long and prosper my friends

[hackney]

Originally Posted by FTE217

Thats pretty much the best way to look at it for no cost at all

Live to your means - even in the best of times for you never know whats around the corner.
A splurge now and then or leap is okay as long as you have enough to back yourself up, not over do it whereas so so many have like b0son posted.

I grew up in a pretty good area but my parents could only afford being on the cheap side of it.
It was good grounding, whereas you see people with new cars,fancy large homes with blinds down.
Stories came out people like them were so hocked up hardly own anything as long as it looks as if they did.
The cycle still occurs today.
We've lived frugal, not OTT but have everything we need and more, own the lot and mortgage is zack.
Who's more worried about every single cent and where it goes and the economy.
Live long and prosper my friends

Well said.

[asagaai]

Originally Posted by FTE217

Live to your means - even in the best of times for you never know whats around the corner.

This.

When interest rates were super low, a colleague who is very senior and a recognised "leader" was talking to me during negotiations, and he was laughing about a junior colleague who wanted to buy into chambers did not have the $$$.

He laughed and said its simple, get a loan with money so cheap.

Another colleague was going to take out a loan for a turbo Bentley- because its free money as there is bugger all interest nowadays.

Anyway covid hit, and a lot of people in my game have suffered. Last year for me was very quiet- felt like I was on the way to early retirement.

Thing is- like FTE 217, I own everything outright, owe nothing, and only have to pay minimal rent for business etc. So I was able to ride out the 1 year trough.

I think about that junior colleague taking out and being liable of the business loan, and having her work drop out for 2 years, probably while having to rent and or meet a housing mortgage, or Mr Bentley guy (but he is older and has assets behind him).

A lack of wisdom seems to escape all walks of life.....

[GO FURTHER]

Originally Posted by FTE217

Live to your means - even in the best of times for you never know whats around the corner.
A splurge now and then or leap is okay as long as you have enough to back yourself up, not overdo it whereas so so many have like b0son posted.

100% agree.
Always, always put something aside for a rainy day if you can.

That rainy day is sure to come if you live long enough... It's not a matter of "if", but just a case of "when".

3 weeks ago, I fell off my roof cleaning my gutters, as one of the ladder legs buckled and gave way.

I fell and landed on my back hitting the hard concrete path below, injured my shoulder and broke my arm. (Could have been much worse, so I am thankful).

Cannot drive and off work for 6 - 12 weeks.

No sick leave being self-employed, no income.

My rainy day had come, but fortunately, I had put enough away to see myself comfortably through financially.

[Citroënbender]

Wishing you a full and timely recovery!

[Yellow_Festiva]

Originally Posted by prydey

Those who justify it as 'providing a service', do you rent it out for the maximum you can get or do you just rent it out to cover your costs?

Both - well sort of somewhere in the middle... Had a tenant for several years. Moved in, never a peep. Kept the place clean, paid on time.

I think he only had 1 rent increase the whole time.

The second chap is much the same. Finished a 1yr term a few months ago and agent asked if I wanted a raise? I said no, just sign him up for whatever he is paying previously.

It's not all about the money, I've learnt that through experience just with life in general.

I treat my tenants exceedingly well (and I've had many).

[Yellow_Festiva]

Finally!

Inspected Tuesday evening. Offered a price they accepted Wednesday, nutted out a few revisions to the contract and paid the holding deposit. Paid the 10% today after everything checked out.

Couldn't be happier

Funny how things turn out - it was at auction last weekend and no one bid. I couldn't go as daughter had her first Saturday soccer match and I wasn't missing it for anything.

Finally got my weekends back.

[FTE217]

Originally Posted by Yellow_Festiva

Both - well sort of somewhere in the middle... Had a tenant for several years. Moved in, never a peep. Kept the place clean, paid on time.

I think he only had 1 rent increase the whole time.

The second chap is much the same. Finished a 1yr term a few months ago and agent asked if I wanted a raise? I said no, just sign him up for whatever he is paying previously.

It's not all about the money, I've learnt that through experience just with life in general.

I treat my tenants exceedingly well (and I've had many).

spot on YF.
I mentioned what prydey quoted falbbergasted me but I guess his perogative but maybe seeing it from a Agents perpective or large corporates I don't know.
A private owner is whole different ball game going to rental market and its not about greed that I took offense to.
Due to hard work, sacrifice and having to make use of equity or finances that need to work for you due to taxation implecations or leveraging or whatever else.
I recall we hadn't lifted rental in one property for 10yrs or more.
Plus no waiting for anything that needs a repair or upgrade due to age.
We've encouraged our renters don't be afraid to ask or question anything that concerns you, the worst you could hear is no but 9times out of 10 never got to no we just did it looking ahead.
No pain no gain.
The other point is when you have a good tenant you look after them.
Long term its a win win !
I won't bother going into the ones that have abused the privilidge for it hasn't been many but for the life of me if you don't respect where you live rental or not you got a real problem.

I tell you who are the ogarlord types, for the life of me I just don't a small biz owner going into companies like Westfields, now thats a whole diff ball game and you've signed in getting fleeced.

[FTE217]

Originally Posted by Yellow_Festiva

Finally!

Inspected Tuesday evening. Offered a price they accepted Wednesday, nutted out a few revisions to the contract and paid the holding deposit. Paid the 10% today after everything checked out.

Couldn't be happier

Funny how things turn out - it was at auction last weekend and no one bid. I couldn't go as daughter had her first Saturday soccer match and I wasn't missing it for anything.

Finally got my weekends back.

Congrats mate, all good things come to he/she who waits and ready to pounce.

[prydey]

Originally Posted by FTE217

I mentioned what prydey quoted falbbergasted me but I guess his perogative but maybe seeing it from a Agents perpective or large corporates I don't know.
.

I don't expect those in the game to agree. Most would see it as a personal attack, but it's just my opinion.

Investors are driving up house prices. That is an indisputable fact. First home buyers are being denied the opportunity to purchase due to investors. Also fact.

It's like being a private buyer at a vehicle auction house. Dealers snap up all the good buys and push the price of everything up. Private buyer pays more even on the stuff dealers don't want.

Now obviously there is a need for rental properties as well, I don't deny that, and those that do the right thing by the tenants, all praise to you however let's not kid ourselves that the primary purpose of most is to look out for number 1.

Now the economy is in need of some desperate correction hence the interest rate rises. Who hurts the most from this? Those with little equity or asset. Generally first home buyers.

It's kind of ironic though when people get all up in arms when investors are from overseas.

This is not a personal attack on anyone though. It's just a difference of opinion.

[FTE217]

Originally Posted by Citroënbender

Wishing you a full and timely recovery!

yer ditto mate, consider it good luck could have been way worse so speedy recovery G F.

Sheer coincidence about falling off the roof the house we are living in today we bought 6yrs ago was a rental and the poor lady who lived here fell off the roof as well cleaning the gutters and suffered brain damage.

[Citroënbender]

Originally Posted by Yellow_Festiva

Finally!
…got my weekends back.

So - approximately what did you buy?

[Yellow_Festiva]

Originally Posted by Citroënbender

So - approximately what did you buy?

Small but very livable house on a huge block of land with good future prospects in what many may say is a cheaper part of Sydney.

Ticks 9/10 boxes. Good enough for me.

[FTE217]

Originally Posted by prydey

I don't expect those in the game to agree. Most would see it as a personal attack, but it's just my opinion.

Investors are driving up house prices. That is an indisputable fact. First home buyers are being denied the opportunity to purchase due to investors. Also fact.

It's like being a private buyer at a vehicle auction house. Dealers snap up all the good buys and push the price of everything up. Private buyer pays more even on the stuff dealers don't want.

Now obviously there is a need for rental properties as well, I don't deny that, and those that do the right thing by the tenants, all praise to you however let's not kid ourselves that the primary purpose of most is to look out for number 1.

Now the economy is in need of some desperate correction hence the interest rate rises. Who hurts the most from this? Those with little equity or asset. Generally first home buyers.

It's kind of ironic though when people get all up in arms when investors are from overseas.

This is not a personal attack on anyone though. It's just a difference of opinion.

Oh, there wasn't investers in the 60/70/80's for eg ?.....and a fact.

Its like being at an auction 30yrs ago or going back and forth with the conniving Agent that you find out its a developer or large owner builder or the next coming a asian, the OS investor started long long before these recent times, I was effected at the start of it.
Also fact.

Yep the car auctions have been just as you describe for 30+yrs and more.
Nothing new there as well, infact worse con job than RE, the backhand deals made was just sheer arrogance between dealers let alone those friends of friends not what you know who you know.
Sound familiar, fact.

Who hurts the most whenever there's a shift/down turn or crisis, exactely where you mention, the cycle of life I'm afraid and where I have been once upon a time.

and there in lies looking after No1 has been going on from the beginning of man, need to mention women today as well.


I agree your entitled to your opinion.