10 reasons why house prices won't crash...

And books, and blogs and half the posters on this forum. Jump onto MacroBusiness if you want some examples. 'nuff said

It may be the world we live in but it's wrong and we shouldn't copy it. Why not stick to being truthful?

 

Just occurred to me,
Since the differential in interest rates between IO and PI broadened by quite a lot in last year or so, So much so that many of who could have.. would have voluntarily switched their IO to PI just to save on punitive IRs differential,
wouldn't they?
I wonder whether those who haven't... can't?


here's the latest on IO loans front

Over a third of NAB and ANZ customers have made 'early conversions' out of their interest-only home loans







the elephant in the room are WBC and CBA, lets see what their figure tells us.

 

[There is a lot of underemployment too, which doesn't show up in the headline figure:

The latest data from Roy Morgan Research estimates that unemployment is higher than 5%. In fact, they think it is at 9.4%, with almost 2.4 million Australians — about 17.8% — either unemployed or under-employed.

As they noted:

‘The Australian economy has grown strongly over the last year with nearly 200,000 jobs created at a rate of just over 15,000 new jobs per month. However there were almost as many part-time jobs (+95,000) as full-time jobs (+97,000) created. As a consequence part-time employment in Australia has hit a new record high of nearly 4.5 million in September[…]

‘As we’ve noted previously the persistent high level of unemployment and under-employment in Australia isn’t because jobs aren’t being created, it’s because the workforce continues to grow at a faster rate than the growth in employment. Not only is the expanding Australian workforce not providing enough jobs to reduce unemployment but the long-term trend of an increasing casualisation of the Australian workforce is continuing.’

There are also a lot of people working below their skills level.

 

I don’t disagree, but ethics of press another topic entirely and somewhat of a deadend tangent unless you plan to start your own newspaper.

The data however doesn’t lie, and doesn’t have a positive or negative spin. That is what I’m talking about.

 

I'm talking about people on this forum carrying on like pork chops about bubbles and crashes like they are stating facts. Newsflash: we are not the media so there's no need to be sensational.

 

I would not make that assumption. People just can't be bothered. I have been meaning to switch a year but only just got around to it and I am usually on top of these things. A lot of people with loans don't even know what their interest rate is so they won't take action until they are forced to.

 

In some cases IO only IR rises, increased the repayment by close to 20% of previous repayments, I am sure Investors holding such loans would have noticed their increased repayments, anyhow it's just a speculation for now in the absence of data to prove it.

 

Interesting but a lot of what he insists will "save" the market didn't save Ireland. We had very high GDP growth, unemployment didn't start rising till long after house prices were falling, recession didn't hit till a couple of years after etc.

 

Looking back at historical articles I can't find any evidence of serious price declines occuring during the 2010-2012 downturn. I'm skeptical that the current downturn is anything like people have seen in 30 years.

Also Dr Andrew Wilson was a prominent voice of optimism in 2010-2012 and look at him now: Auction Insider: 5th November 2018

 

Interesting that he is talking about another interest rate cut. Not sure if that's the right call..

Also, on one hand tightening of the lending policies and on the other hand hoping for another interest rate cut..

 

That's a good question,CBA 's AGM is on in Brisbane tomorrow and may well come up during question time..

 

Many of them would be on fixed interest rates. I know of the two IO loans I had I only switched the variable one to P&I.