i'm not sure if this is the right category, but i think that the whole of the Australian community needs to unite to voice their disgust at the way in which this labour government is destroying the whole economy, and as this affects property more than any other investment, i would think the people on this forum would be most affected.
the banks are being blamed for government legislation(no i don't like banks either) but due to stupid knee jerk reactions based on the US economy, they and the RBA have put our economy in a far more dangerous position than the US.
everybody should read all the latest actual economic figures being put out in the last 6 months, not those touted by the media. i'm not one to run around shouting " the end is nigh" in fact the very opposite, however, being in the property game for 35+ yrs, i am really concerned, not for me, but for the whole of Australia. we may very well have a crash in property prices, not due to over indebtedness, but to the absolute stupidity and " no idea what we are doing" mentality of this government and glenn stevens "i don't want to get it wrong again" which is exactly what he has done.
in other countries people go out and protest, here, everyone seems to be ok with what is happening and continue to vote in these incompetents, or maybe they haven't woken up yet and by then it will definitely be to late. the situation is now being made worse with the floods and a slow xmas.
Urging first home buyers to buy with government grants and low rates and then 12 months later, instigate a reversal which puts them in an even worse position is absolutely criminal and these are the people lest able to absorb rising costs, let alone the current rate rise taking affect in January.
I think you should educate yourself to the actual facts.
The Labor Govt’ (admittedly never voted for them, never will, it’s just not what I have been brought up to do.) actually saved the Australian property market through the Govt’ Guarantee. The Banks’ crawled on their hands and knees when the overseas debt markets dried up during the height of the GFC. Our banks get the majority of their money form overseas investors. The Banks’ borrow this money on the short term money market. Without the Govt’ Guarantee (which is like parents guaranteeing their kids mortgage) the funding costs (i.e your mortgage) would of increased conservatively 200 basis points over night. This would have happened irrespective of the RBA cash rate.Do you honestly believe that Glen Stevens sets the price of your mortgage?
I think you should look at the senate inquiry into banking competition; you should look at the Australian Office of Financial Management (AOFM) what dose the AOFM actually do? You should look at the Australian Prudential Regulation Authority (APRA) and actually read the RBA statements. You should also look at the transformation of Australian Banking regulation.
You should look at the motivation behind the historic changes we are seeing in the Australian financial and banking sectors.
You should ask yourself why have the RBA and APRA put in place an emergency loan system? You might want to read about Basel III and what is called the liquidity coverage ratio. You should read about the emergency facilities set up during the GFC when The Banks' self-securitised $43 billion in assets and handed them to the RBA for cash.
The Govt' is bending over backwards to stop the Australian Property market from ending up like our northern hemisphere cousins. They Govt', AOFM, APRA, The Banks' and the RBA are trying to use all the tools in the basket to keep the Aussie dream from becoming a nightmare.I am ashamed to say that the real damage was done during the Howard, Macfarlane years.
You should never forget that It is all about indebtedness, and liquidity and what is known as the Fallacy of Composition.pmack, you are travelling on blandishments.
First .. The labour government CANT possibly tank the Australian Economy. The Australian Economy HAD to change in nature during the 90s to accomodate what was coming. Lets be 100% realistic .. when China produces the goods at up to 1/5th of the cost as the same Australian product with the same quality or better, there is no way you can compete on the manufacturing side of things. So the economy had to be redirected to other industries .. and in those .. its functioning reasonably well.
As far as property markets are concerned .. THE AUSTRALIAN COMMUNITY ( what a wonderfully meaningless uniting voice that is) is a wonderful multicultural bag of people from all over the place. And there is no one specific market that is more vulnerable or stable than any other.
Second .. the gift horse of the first home buyers grant was only ever meant to be temporary. Taking it on board as a permanent uplift in the price bracket would have distorted not only prices for the longer term .. there would have been a need to BOOST the FHBG to a point where it kept stimulating a false economic lift. And that .. would be how u get a nice big plummet. The government can stimulate .. but then it has to adjust back to normal conditions. Its like the Kennett $100 property tax implemented in the 90s. To keep it for any length of time would start to affect property prices downwards.
The Australian Government (Liberal or Labour it really doesnt matter) had every right to stabilise and guarantee the strength of the banks during the GFC. And it not only probably saved our economy from plummeting .. it gave our creditors some degree of comfort with our current backing arrangement. The same cannot be said for the US, it has lost a lot of key markets due to a TOTAL lack of trust in its fiscal machinery as it now stands. The worst part for the US .. it has done nothing to accurately remedy the measure. And that for the US spells more long term gloom.
The same can be said for the foreign purchase of property rules being tightened. Up until 2009 there was a constant stream of foreigners from various countries using the current foreign purchase laws to buy apartments off the plan AT ANY PRICE for the vehicle of citizenship to be gained at a later stage. Often these properties were later to be sold at a loss .. for the privelege of gaining citizenship. As you might guess that scenario creates a false market.
Two things we did bad for a long time (in Victoria at least) was to ban flats because of the fear of high density living. It meant that a lot of areas ended up being built with medium density living (late 80s onwards) instead of the appropriate high density living that would improve the transit of strip shopping and the wider viability of commercial areas in the vicinity. This is even now only just starting to get remedied. And it means that a lot of the high prices that we have for housing are because we didnt build up when it was necessary.
Its one thing for a bunch of Armadale residents (Vic) to put up their NIMBY signs for a large block of apartments in their area. But due to the fact that rents are constantly rising in the nearby High St commercial area, there are large shops vacant because the rents are unaffordable DUE TO LACK OF STREET TRAFFIC JUSTIFYING THE RENTAL. It eventually affects commercial rentals .. which in turn affects residential rentals. With the increased density there is enough street traffic flow to justify the increased rentals. Managed properly .. increased densities are also an asset to the rich in the area as well.
The final thing that will save our banking butts is the fact that the banks have got extremely tight on lending again. And that in turn will protect the value of owning an asset currently. Two things keep the value of a property up, the lack of property available on the market .. and the lack of people willing to sell. The hammering of the credit market means that only people who can really afford to make a solid purchase will be able to buy property in the short term. That strengthens the merit and value for the long term. However it also means that there will be less solid buyers out there. And there will be a minor pricing adjustment to reflect that.
nicolas_b,
Your post is very correct. Unfortunately this bit:
_______________________________________________________________________
I am ashamed to say that the real damage was done during the Howard, Macfarlane years.
_______________________________________________________________________will not be remembered or known by most Australians when the feces hits the spinning blades. Apathetic, self indulged, short memories abound.
xdrew,
I must comment on your closing comment
_______________________________________________________________________
The final thing that will save our banking butts is the fact that the banks have got extremely tight on lending again. And that in turn will protect the value of owning an asset currently.
_______________________________________________________________________The banks are starting to get tight, they aren't there yet. It will protect the underlying value of those who have owned housing assets for a long period of time, not those who brought recently and not those who are relying on top dollar.
_______________________________________________________________________
Two things keep the value of a property up, the lack of property available on the market .. and the lack of people willing to sell. The hammering of the credit market means that only people who can really afford to make a solid purchase will be able to buy property in the short term. That strengthens the merit and value for the long term. However it also means that there will be less solid buyers out there. And there will be a minor pricing adjustment to reflect that.
_______________________________________________________________________Under supply is a myth. Stock for sale is steadily growing everywhere. In WA and QLD REAs are telling vendors not to list – how does that reflect under supply?
If things start going south, more and more will want to sell. No-one will be able to stop the stamped, as it has occurred elsewhere. Also consider that there is a big demographic bubble moving into retirement that are overly invested in housing. The BBs can't NG when they aren't working, they will have to sell to reap the rewards of their investments.
I agree that only buyers with good wages and deposits will be able to get in soon. I disagree that this will cause 'minor' adjustments. There won't be enough buyers for the current stock over the next 3 years – if vendors keep adding to it it will get worse. In a year or 2, without more stimulus, those buyers with solid finances will have the total pick of the litter.
pmack wrote:Urging first home buyers to buy with government grants and low rates and then 12 months later, instigate a reversal which puts them in an even worse position is absolutely criminal and these are the people lest able to absorb rising costs, let alone the current rate rise taking affect in January.
they did their job, they stimulated the economy
having young people " take one for the team" is a well worn Australian tradition.
In the 1980s if you were not young enough to have your piece of Australia with loan in place then you got to pay 17-19% on your loan while the older Australians with their smaller loans got 11%.
Can't remember the majority of those on 11% rising up …
remember their is no " I " in team…. it will make a man of them, ….unless of course they are women …or are men wearing womens clothes ….
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