Australia housing bubble

[b0son]

Originally Posted by FTE217

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

The proportion of investors doubled in the 20 years since the early 90s. Not sure what's happened in the last 10 years, but I'd be surprised if it hadnt continued to rise.

https://www.rba.gov.au/publications/...c-housing.html

[FTE217]

that true I suppose, point I was trying to get across that we/me/you/them/kids have battles getting into buying property no matter when for there is always 1 or 5 others that have more $$$.
Lets not forget interest rates had been in a "peach" for around that time, especially post GFC 07 once things settled back again so could say 16yrs.
You didn't have to have a lot up front no matter who you were and age.

[buggerlugs]

Originally Posted by FTE217

Lets not forget interest rates had been in a "peach" for around that time, especially post GFC 07 once things settled back again so could say 16yrs.
You didn't have to have a lot up front no matter who you were and age.

Exactly. Let's not forget the Media and all the Current Affair viewers banging on about the interest rate rises. Did all these clowns think the term of there mortgage would stay at 1% ? We have been warned many times that the good times couldn't last forever...........

[prydey]

Originally Posted by buggerlugs

We have been warned many times that the good times couldn't last forever...........

Good times??

Mortgage to income ratio is the highest it's been and 3% on $500000 is more than 17% on $50000.

The good times have been gone for many years.

[FairmontGS]

Originally Posted by prydey

Good times??

Mortgage to income ratio is the highest it's been and 3% on $500000 is more than 17% on $50000.

The good times have been gone for many years.

And in 1985 I was earning $28k pa and now I'm earning Zilo's kid's-type money. Check

[buggerlugs]

Originally Posted by prydey

Good times??

Mortgage to income ratio is the highest it's been and 3% on $500000 is more than 17% on $50000.

The good times have been gone for many years.

If you haven't made a quid in this country in the last 15 years you
are seriously doing something wrong..........

[T3rminator]

Haven't read one media report where anyone has said rates shouldn't rise. I called it here back in Nov 2021 that it should have risen. People are cheesed off with the behaviour of the RBA, and rightly so IMHO.

Lets break it down.....

RBA has conceded that it was a mistake to make the 2024 forecast. Fair enough, think we can agree that was a fail. Did not revise the statement when they had data to suggest that the forecast no longer held true. Big fail. Data suggested that rates should have started to rise around Nov-Dec 2021, but they delayed the decision due to looming federal election. Given they are not supposed to be swayed by politics, that's another fail. Being late to the party, and now having to dish out 9 in a row playing catch up, possibly going on to 12 or 13, risks putting the country into recession, which is going to impact more than just recent home owners, massive fail.

Responsible recent home owners probably factored in 3 or 4 rate rises in a given year, not 9 going on to 12 . Not sure telling those people to "live within their means" will go down too well. Maybe I'll increase my rent 30% in a couple of months and tell my tenant to go live within his means. The RBA has given very little time for households and government policy makers to make adjustments.

Would love to see stats on spending and contribution to inflation vs age groups.

[FairmontGS]

No one sounded the alarm bells for us back in the 80's/90's when we were crucified. It was just accepted casualties.

Rates go up 3% and suddenly the RBA/Federal Gov-Co are burnt at the stake. Go figure...

[MITCHAY]

If you are negatively geared it means your costs are more than the income you make for that property. Renters think that you as an investor should just be a good sport and take it on the chin

As I said before, play the game, not what you think it should be. By the way I'm not an investor and have none other than my own place but starting to rethink that.

[Itsme]

Originally Posted by T3rminator

Haven't read one media report where anyone has said rates shouldn't rise. I called it here back in Nov 2021 that it should have risen. People are cheesed off with the behaviour of the RBA, and rightly so IMHO.

Lets break it down.....

RBA has conceded that it was a mistake to make the 2024 forecast. Fair enough, think we can agree that was a fail. Did not revise the statement when they had data to suggest that the forecast no longer held true. Big fail. Data suggested that rates should have started to rise around Nov-Dec 2021, but they delayed the decision due to looming federal election. Given they are not supposed to be swayed by politics, that's another fail. Being late to the party, and now having to dish out 9 in a row playing catch up, possibly going on to 12 or 13, risks putting the country into recession, which is going to impact more than just recent home owners, massive fail.

Responsible recent home owners probably factored in 3 or 4 rate rises in a given year, not 9 going on to 12 . Not sure telling those people to "live within their means" will go down too well. Maybe I'll increase my rent 30% in a couple of months and tell my tenant to go live within his means. The RBA has given very little time for households and government policy makers to make adjustments.

Would love to see stats on spending and contribution to inflation vs age groups.

You can blame the RBA as much as you want but in reality, people should know their own limitations and capacity to repay variable loans, also people should also be aware economy can be volatile at times.
As an example, who foreseen the Covid pandemic, the Russian Ukraine war which has greatly impacted budget blow outs and the rising costs of living.

In my opinion the feds are trying to deflect some of the blame onto the RBA as they are failing to keep inflation under control in this country.

To be honest the RBA is making decisions that has to be made whether we like them or not.

[T3rminator]

Originally Posted by Itsme

You can blame hold the RBA to account as much as you want but in reality, people should know their own limitations and capacity to repay variable loans, also people should also be aware economy can be volatile at times.
As an example, who foreseen the Covid pandemic, the Russian Ukraine war which has greatly impacted budget blow outs and the rising costs of living.

In my opinion the feds are trying to deflect some of the blame onto the RBA as they are failing to keep inflation under control in this country.

To be honest the RBA is making decisions that has to be made whether we like them or not.

Slight correction made above. Have said many times before, the issue isn't about needing to raise rates - I said they should have done it sooner, its about how it was done.

Covid - they get reports from the banks frequently, and would have known that deposits were being stashed and that the economy was flooded with cash from covid bail outs. Hey, you could even magically pull out $20k from your super, tax free, if you wanted to. Yet they never revised their forecast...fail.

Ukraine war - no amount of interest rates hike is going to fix cost of living increase due to the war, so not in the equation.

Had to have a laugh at the guvnor's forecast today...

"There is a risk that we've gone too far and don't need to do anymore, that the economy will slow more than we expect," Dr Lowe told a parliamentary hearing on Friday.

"But there's also a risk that we haven't done enough, that inflation proves more persistent and doesn't come down. And our job is to try and balance those."

well, you can't go wrong with that forecast. Confidence fully restored. Bet the bond traders at the private lunch had more of an insight than that.

I'm just glad i dont have to pay rent.

Found out the townhouse two doors down is perma rented for $720 a week !!!

[buggerlugs]

[John 13]

Is it really a matter of interest? Considering eight nearby houses including ours, are occupied by twelve people. Most of these would be three to four bed one bath all on reasonable sized blocks. The area is within eight kilometres of the CBD. I estimate that up until forty years ago these same eight houses would have been home to at least twice as many people. Housing shortage ! Go figure.

[Syndrome]

The bottom is in! Prices are starting to going up!

[Citroënbender]

That’s a big call. Just had someone else (angling to buy) telling me it will be September.

[fordomatic]

Originally Posted by Syndrome

The bottom is in! Prices are starting to going up!

Yeh, no chance, still more cuts coming. People aren't hurting properly yet, that'll come though.

[T3rminator]

Originally Posted by fordomatic

Yeh, no chance, still more cuts coming. People aren't hurting properly yet, that'll come though.

The committee who aren't very good at forecasting reckon full effect of rates won't be seen for 12-18 months. Borrowers, on average, are 12-18 months ahead on their payments. Although, with rates continuing to rise, its going to eat into that safety net a lot quicker.

Not seeing a slow down in spending. The big shopping malls are still chockers. Reckon the small independents will get hit first as people look to big chains for savings.

[prydey]

RBA will keep going until inflation starts to ease or reverse. Blind Freddy can see that needs to happen.

[b0son]

Originally Posted by prydey

RBA will keep going until inflation starts to ease or reverse. Blind Freddy can see that needs to happen.

Not quite. They'll be factoring how much of the inflation is coming from overseas, because they cant control that. The last thing they want is a recession while inflation is still ticking along.

[MITCHAY]

Originally Posted by Syndrome

The bottom is in! Prices are starting to going up!

It seems crazy but a bloke at work was saying the same thing today.

[Techno]

Originally Posted by zipping

Anyone selling up to take advantage of the market or are people still happy to try get in or invest in a second property.

not in a million years

[T3rminator]

Sounds like the folks who aren't very good at making forecasts, aren't very good at interpreting data either. That or they were just batting for the blue team.

https://www.abc.net.au/news/2023-02-...tion/102020610

One of the biggest decisions the current board has made in recent times was the unveiling a 0.25 percentage point rate hike in May 2022, taking the cash rate from an historic low of 0.1 per cent to 0.35 per cent. It was the first time the central bank had raised rates since 2010.

A key part of its justification was that there was evidence of strong upwards pressure on wages growth.

Close to a years' worth of official data now shows that evidence was misleading — wages were not rising to any great degree.

.............................

The Consumer Price Index (CPI) for the December quarter rose 1.3 per cent, bringing annual inflation to 3.5 per cent.

To be clear, before the Reserve Bank made any move on interest rates, inflation was already well outside the bank's own target band of 2 to 3 per cent.

The RBA eventually decided to lift the cash rate at its May meeting, several months after inflation showed signs of being a problem.

[FairmontGS]

Originally Posted by Syndrome

The bottom is in! Prices are starting to going up!

Yes... Sydney Inner West. People over the road rejected offers of $2.7m in December and sold last week for $3.25m. There was a flurry of bidding at the end. It wasn't even officially listed by the agent.

[Itsme]

Originally Posted by FairmontGS

Yes... Sydney Inner West. People over the road rejected offers of $2.7m in December and sold last week for $3.25m. There was a flurry of bidding at the end. It wasn't even officially listed by the agent.

Hmmm something tells me that dwelling was well and truly not for 1st home buyers.

[zilo]

Next Tuesday will be fun...another RBA meeting.

If it gets to 6% i might put some money back in the bank instead of under the mattress.

[T3rminator]

Originally Posted by zilo

Next Tuesday will be fun...another RBA meeting.

If it gets to 6% i might put some money back in the bank instead of under the mattress.

They were thinking about 0.5 rise last month, but went with 0.25. Reckon they'll go 0.1 to 0.2.

Deposit interest of 6% will see mortgages hit +7.5%. And at that rate, someone on an average income taking out an 80 LVR loan on an average house price, will be putting 90% of their monthly wage to service a P&I......same as 17% in the early 90s.

[Itsme]

Originally Posted by zilo

Next Tuesday will be fun...another RBA meeting.

If it gets to 6% i might put some money back in the bank instead of under the mattress.

Well, you are being a mug to yourself if you have not already done so, the last 6 months I've been making good money with bank interest.

[Techno]

Originally Posted by Itsme

Well, you are being a mug to yourself if you have not already done so, the last 6 months I've been making good money with bank interest.

Must be the first time you have made money with bank interest in more than a decade

[Syndrome]

Where is dave289? Many years ago he had a lot to say about this subject.

https://www.fordforums.com.au/search...rchid=13647869