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Housing market....again
I keep hearing that the Australian housing market is different to other property markets because the average aussie owner pays off their loan faster.
It's been reported time and again that home owners are (likely) using the record low interest rates to pay off their 'extra large' home loans. Even the RBA has said that Australians can handle larger home loans because they manage their finances better than UK/US counterparts. But then I read this... "Rather than paying down debt when interest rates were low, households have been taking on more debt." Looks like the average 'Australian' is more like the rest of the world afterall. :D |
Re: Housing market....again
Originally Posted by coolshadows
(Post 8482841)
I keep hearing that the Australian housing market is different to other property markets because the average aussie owner pays off their loan faster.
Originally Posted by coolshadows
(Post 8482841)
Looks like the average 'Australian' is more like the rest of the world afterall. :D
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Re: Housing market....again
RBA Deputy Governor Ric Battellino, from end of 2009:
"borrowers are continuing to take advantage of the low level of interest rates to make accelerated loan repayments" "Australians seem to spend less of their income on non-housing consumption than is the case for US households, with a significant part of this difference explained by lower health costs in Australia. Australian households therefore have greater capacity to service housing loans" "The faster pay-down of mortgage debt in Australia reduces the risk of borrowers subsequently getting into financial difficulty" "Overall, the experience of the last few years suggests that the Australian household sector as a whole appears to have the financial capacity to sustain a relatively high ratio of housing prices to income." "Indeed, it is fair to say that most mortgage borrowers can absorb much greater upside in interest rates" |
Re: Housing market....again
>>Even the RBA has said that Australians can handle larger home loans because they manage their finances better than UK/US counterparts.<<
I bought into this before settling down here - that Australians are more financially savvy than anyone else on the planet. It's a load of b*lls - like most of the other self generated myths about Australians. The average Australian doesn't "invest" - he gambles. He probably doesn't even do his own tax return, and knows less about the tax system than most of us who have arrived and take the trouble to learn a bit about it. |
Re: Housing market....again
RBA Deputy Governor Ric Battellino, from end of 2009:Quote:
borrowers are continuing to take advantage of the low level of interest rates to make accelerated loan repayments" "Australians seem to spend less of their income on non-housing consumption than is the case for US households, with a significant part of this difference explained by lower health costs in Australia. Australian households therefore have greater capacity to service housing loans" "The faster pay-down of mortgage debt in Australia reduces the risk of borrowers subsequently getting into financial difficulty" "Overall, the experience of the last few years suggests that the Australian household sector as a whole appears to have the financial capacity to sustain a relatively high ratio of housing prices to income." |
Re: Housing market....again
Arthur Karabatsos, vice-president of Moody's rating agency, from 7th April 2010: Quote: "Indeed, it is fair to say that most mortgage borrowers can absorb much greater upside in interest rates" From today's papers: Credit ratings agencies including Moody's have urged Australian banks to diversify the make-up of their lending book, arguing that a large exposure to housing has left the sector vulnerable to a sharp drop in prices. http://www.theage.com.au/business/bi...0408-rv7y.html |
Re: Housing market....again
May I suggest there is one major factor that is being overlooked in this housing debate.... comes down to distance and travel.... Aus Cities are very spread out as we all know.
Fuel Costs... they have to jump considerably and fairly soon I would say. It has to creep up on mosts peoples blind side within the next 48 months. That'll put a dampner on the Housing market more than most factors |
Re: Housing market....again
So responsible lending may become the order of the day - hardly a bad thing!
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Re: Housing market....again
Originally Posted by ozzieeagle
(Post 8483384)
May I suggest there is one major factor that is being overlooked in this housing debate.... comes down to distance and travel.... Aus Cities are very spread out as we all know.
Fuel Costs... they have to jump considerably and fairly soon I would say. It has to creep up on mosts peoples blind side within the next 48 months. That'll put a dampner on the Housing market more than most factors |
Re: Housing market....again
Originally Posted by ozzieeagle
(Post 8483384)
May I suggest there is one major factor that is being overlooked in this housing debate.... comes down to distance and travel.... Aus Cities are very spread out as we all know.
Fuel Costs... they have to jump considerably and fairly soon I would say. It has to creep up on mosts peoples blind side within the next 48 months. That'll put a dampner on the Housing market more than most factors Here in Perth when the oil price went up to $140 a barrel, the outer suburbs started to tank in price as people started to realise that the cost of oil would be a huge factor in living far from the City. Not a problem if you work locally or from home though. Of course, there is the increasing costs of food and goods that have to be transported. On the last oil spike all the local supermarkets raised their prices but failed to lower them when the oil price subsided. :( |
Re: Housing market....again
Originally Posted by hotfuss
(Post 8483387)
So responsible lending may become the order of the day - hardly a bad thing!
Responsible lending it a fantastic idea and will keep Australia out of the proverbial. Bring it on I say (.... and in the meantime it will dampen house prices - ;)) |
Re: Housing market....again
Originally Posted by coolshadows
(Post 8483391)
Also the cost of gas, electricity, and water are all expected to increase considerably.
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Re: Housing market....again
Originally Posted by pomtastic
(Post 8483412)
Don't forget taxes, state and local will have to rise, these $900 handouts, pink batts and school sheds have to be paid by someone. :p
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Re: Housing market....again
Originally Posted by pomtastic
(Post 8483410)
It has to be done otherwise we'll end up like the Yanks with high personal debt levels brought on by people tapping into their ever increasing house equity. It's how the GFC started in the first place.
Responsible lending it a fantastic idea and will keep Australia out of the proverbial. Bring it on I say (.... and in the meantime it will dampen house prices - ;)) Not that the bankers can be blamed for everything - personal responsibility has to come into it too, but it's been well proven that people will take what they're offered, so if responsible lending comes as a result of this whole GFC mess, that has to be a hint of a silver lining.. |
Re: Housing market....again
LPG >>>
thanks to the RAA... Currently, fuel excise tax does not apply to Autogas, whereas petrol is taxed at 38.14 cpl. Starting in 2011, fuel excise tax will be added to Autogas at a rate of 2.5 cpl. This will increase by 2.5 cpl for five years, until the fuel excise on Autogas reaches 12.5 cpl in 2015. In today's terms, this will mean that in 2015, motorists will be paying approximately 30% more for Autogas when they fill up. (wonder what will happen to the 1000s employed in the LPG conversion industry?) |
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