Credit tap to be turned back on, full strength?

Discussion in 'Property Market Economics' started by Sydlad, 25th Sep, 2020.

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  1. euro73

    euro73 Well-Known Member Business Member

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    Seems to me that says " mortgages and populations are bigger in Sydney /NSW than in Melbourne/VIC/TAS. Bigger in Melbourne than in Brisbane/QLD. Bigger in Brisbane than Perth/WA ... and smaller in Adelaide and Darwin " :) or something like that
     
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  2. euro73

    euro73 Well-Known Member Business Member

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    Client sent me this earlier via Whatsapp. One of 50 texts or calls Ive had today by people wondering whether they had just won the lottery of borrowing capacity ;)

    PHOTO-2020-09-25-11-27-42.jpg
     
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  3. DueDiligence

    DueDiligence Well-Known Member

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    Step 1 liquify banks (Done)
    Step 2 remove capital ratios and force lending (In progress)
    Step 3 open immigration (Coming)
     
  4. Younginvestor2

    Younginvestor2 Well-Known Member

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    Step 4 Dismantle FIRB- allow foreigners to buy
     
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  5. DueDiligence

    DueDiligence Well-Known Member

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    Step 5 - Dismantle insolvency laws
     
  6. DueDiligence

    DueDiligence Well-Known Member

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    Actually I forgot Step 0

    Flood the economy with government funded and approved non genuine savings and income.

    That one is critical
     
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  7. Harris

    Harris Well-Known Member

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    NoCookies | The Australian

    couldn't be more clearer around the intent of the said legislation and how this would create a massive spike in lending for resi investors.

    "..Under new obligations, which have yet to be legislated, lenders will be able to take at face value the information provided by borrowers on which they will base their loan assessments. Borrowers will shoulder the responsibility of providing accurate information, unlike the current laws, which place the onus on lenders to verify the information contained in a borrower’s application."

    @Redom , very interested to hear about your thoughts since this represents a very significant change in the landscape post Covid.
     
  8. DueDiligence

    DueDiligence Well-Known Member

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    Is it not just a green light for self employed parties to borrow? The structural problems are deep, the credit quality in the self employed and business sector has never been worse, but if the onus is on the borrower to not lie , and that is overlooked then all of that can be overcome.

    I expect to see low docs and +100 % LVR loans to balloon, IO loans, the lot... insolvency moratoriums, non performing loans will stay performing, credit impacts will be abolished.

    Everyone gets a 1000 point credit score reset, and going forward told not to lie.

    Investors have been absent in the credit market since Feb 2017, this is the lure.

    Tax benefits will follow, to quote Dickens, “It is going to be the best of times, and, the worst of times”
     
    Last edited: 26th Sep, 2020
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  9. Blueskies

    Blueskies Well-Known Member

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    Step 6 - Rework our ridiculous system of enterprise agreement, awards, and industrial red tape
    Step 7 - Massive government infrastructure investment
     
  10. gman65

    gman65 Well-Known Member

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    It's party time...

    And let's face it this will help tip a lot more disposable income into the economy. I've had no trouble servicing my loans for well forever, yet the APRA stuff meant I had to stay in mostly non tier1 lenders due to silly HEM measures. So for the last 18 months or so I've been stuck in the the 4.x region, when I could get 3.x or even lower if I were able to go back to a tier1 lender. That difference would mean I can service even more easily, freeing up money to spend spend spend..

    Yes the logical part of me says this will come back to bite the country eventually, but in the short term it's going to make a big difference to restimulating the economy.
     
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  11. Just_A_Name

    Just_A_Name Well-Known Member

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    It sounds like they just want to keep the normal lending and borrowing activities going smoother. Lenders are very reluctant to lend at the moment since they feel the uncertainty, which is bad for the economy. Also, if the market liquidity dry up or hitting another air pocket again, those loans need to roll over might have no choice but default. But I don't think this is the case at the moment.

    It have nothing to do with what you guys worrying about.
     
  12. DueDiligence

    DueDiligence Well-Known Member

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    The latest policy in vogue is kick the can until MMT is established. Then it will be a whole new economic position anyway.
    The can will just keep getting kicked, indefinitely
     
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  13. euro73

    euro73 Well-Known Member Business Member

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    Household Expenditure Measures are not an APRA thing. They are an ASIC thing, and form part of ASIC's "responsible lending" guidelines. . APRA looks after other stuff- IO lending, assessment rates, DTI ratios etc. The treasurer seems to believe ASIC duplicates some functions with their responsible lending guidelines and it's causing huge traffic jams in loan processing, and wants to legislate his way around it by taking their powers away - ASIC's, no APRA's . Probably worthwhile distinguishing between the two regulators and what they do.
     
  14. BunnyXiao

    BunnyXiao Well-Known Member

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    Do you mean China which provides so much student revenue to Australia? Surely not as it is not a poor nation. Also we have and are using a vaccine currently.
    Rest of the information however is interesting.
     
    Last edited by a moderator: 26th Sep, 2020
  15. pattoman

    pattoman Well-Known Member

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    So, have a RC on banking, goes against the recommendation of RC. Why have the RC in the first place?
     
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  16. datto

    datto Well-Known Member

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    Quite frankly I found the scrutiny of living expenses very intrusive and it should be scrapped.

    So what there were regular payments to a masseuse on my Visa card. 100% therapeutic. Keeps me in top condition so I can work harder and earn money. Grrrrrrrr.
     
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  17. Burramys

    Burramys Well-Known Member

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    I struggle to see why there's a need to go into my details about income and expenditure. I hav one bank account into which dividends and rent go, and from which all expenses are paid, including the credit card, in full automatically each month. The only other accounts of substance are the mortgage and offset; the stock broker account has a few cents. From these the net position can be easily determined for a year or any period. Adjustments can be made for buying or selling shares or property, with CGT paid. Over the last six months income has gone down, arguably another adjustment, or at least a note made that this is one reason the mortgage payment rate has slowed, but it's still above the minimum. The HEM and how much I spend on rates, water insurance and the like seem to me to be secondary to savings capacity over the long term.

    If this can be easily done for applicants then it's much easier. Also, I'm not sure that the applicant has the skills to assess if he or she can adequately service the mortgage. Banks are far better placed than most people to assess this.
     
  18. euro73

    euro73 Well-Known Member Business Member

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    No. I named many countries aside from China - India. Indonesia, USA, Canada , UK, Rest of Europe etc - who are sources of immigrants and tourists and students , and all experiencing serious levels of contagion still, or second waves.
     
    Last edited by a moderator: 27th Sep, 2020
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  19. albanga

    albanga Well-Known Member

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    @euro73 who is responsible for DTI’s?
    I think these are ridiculous! Someone can earn 100k with no other debt and a $1,000 monthly net surplus but can’t have over $600,000 in debt.

    I just don’t understand the logic?
     
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  20. pattoman

    pattoman Well-Known Member

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    On 100k and only 1k surplus a month, I think 600k is way too much already.