Mortgage Rates

Lender Bashing Time – Who’s Really To Blame?! True Reason Property finance loan Fees Are Going UP





Although it’s been common to bash banking institutions more than their lending techniques, who is it that put them there, designed so referred to as ‘regulators’ and allowed the complete technique to go for this extensive?

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12 comments

  1. Immorality and Dishonesty lead to final crash!

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  2. The "banking cartel" has been excellent to the superannuants though with its dividends, ah?

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  3. If you look at the BIG picture, then you will find the ROOT causes! Is it logical? are we all dumb??

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  4. Australia seen as one of the world's four riskiest housing markets
    By Michael Heath

    13 September 2018 — 2:41pm

    Housing market dangers are "especially acute" in Australia, Hong Kong, Canada and Sweden, Oxford Economics has said, warning this has historically posed a threat to economic activity.
    "In all four, valuations are very elevated, there has been a lengthy housing boom, debt levels are high and there is a significant share of floating rate debt," Adam Slater, lead economist at Oxford, said in a research note.
    In contrast, risks are relatively limited in markets like the US, Germany, France, China and Japan, according to the note.

    Australia is one of the four riskiest property markets, according to Oxford Economics.
    Photo: Jim Rice JRZ
    And across most major economies there has been no significant recent rise in mortgage rates, which have even fallen in some cases.
    "So, the classic 'trigger' for house price declines is largely absent," Slater said. "However, rising rates are not strictly necessary for prices to start falling."

    House prices have been falling in Australia, down almost 3 per cent in the year through August in major cities, and 5.6 per cent in the Sydney market. The slump started even before three of the big four banks raised mortgage rates in recent weeks, blaming higher funding costs. The Reserve Bank has so left rates at a record low.
    Oxford said it compared markets across OECD countries from 1970 to 2013 and found a clear negative relationship. Where valuations had risen 35 per cent or more above the long-term average over that period, real house prices fell 75 per cent of the time over the following five years, it said.
    "This points to many OECD countries seeing stagnant or negative real house price growth in the next few years: the scope for a further house price 'melt-up' in highly valued markets looks extremely limited," Slater said.
    Stretched valuations also matter because house price changes can have a significant impact on economic activity, Oxford said, citing a sample of 83 house price booms. It also found house prices tended to fall after booms, and often substantially.

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  5. easy money for all and people can't be complaining. now its time to feel the pain for the whole country.

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  6. For such a bubble to form you need a high level of complacency from everyone involved. There’s no single person at blame here.

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  7. Geez, that bloke at the start is so emblematic of this country… Lost his job, speculated on housing and went into a self employed gig ecconomy/small business.

    To the government, he is employed, he is consuming. He is fine. But its all going on credit when he is struggling to service the debts he already has. This is what we saw in the Q2 GDP print. Economic growth, but with debt growth of the same measure…

    …and now rates start to rise. And the poor bloke appeals to the banks better nature for them to be "open and honest". Wow, the naivety is staggering.

    Step back people. This will be messy.

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  8. The Government gives the Big 4 it's backing through deposit guarantees which helps their funding rates (lower than competitors). So it makes it difficult for small banks to compete.

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  9. By the way, the good news is that the blame game has started, which means we're in the downturn stage of the bubble..

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  10. And who did nothing about foreign speculators entering our market and pumping prices $200-$300k above reserve over and over especially in Sydney? Oh yeah our regulators…

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  11. A: "whoever let's them get away with it"

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  12. As much as i love ragging on the banks and as usual they had their snouts in the trough the whole time but that trough was put out for them by the government and the RBA and thats exactly where the blame lies here.

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