Negative gearing changes

7.5% more normal based on historical data isn't it? When inflation was high and super high, wage growth was excellent. We are now in a new world with low inflation so hard to compare with the past.

Can rising global yield be sustained? Is it caused by low IR and QE after the GFC? Can the US share market keep going up?

 

not too long ago.i am talking about average mortgage rate post 2000,
7% mortgage rate is the normal and 4% is the exception.

 

Our of curiosity what is the low point that banks can charge before they start eating into their margins, and thats including the portion that they have to fund from overseas.
At some point they would completely ingore the RBA or stop lending .
Even if there was a big shock to the economy you simply cannot drop rates by 300-500 points as we have done in the past when the RBA rate is at 1.5% , which means we might see a lot more volatility in the economy and in house prices.

 

Why are you worried about every one else.

This is a Property investment forum.

I want property to continue to rise...... I should hope most on here should want the same.

 

I'm no finance specialist but I doubt they will stop lending altogether, it is their main profitable business activity. Home loans plus Business Loans Plus Credit Cards/Personal Loans ARE the banks core business. I guess daytrading is another fun thing for bankers to do. Recently they dallied into selling insurance and financial planning, and didn't do so well, hence royal commission.

They fund loans from deposits plus wholesale funding plus equity. So the RBA rate is only one of the drivers.

For context here is recent statement from RBA regarding lending conditions.
https://www.rba.gov.au/publications/smp/2019/feb/domestic-financial-conditions.html
and a comment here on spread and rba rate vs bank rates.
Australian home loan borrowers shouldn't expect much relief from RBA rate cuts, if they actually occur

I am sure the finance boffins will have more educated comments.

 

Lots of people are here to ensure they feel better about their course of action (or inaction)

 

Nah I dismissed that notion a long time ago. There are many, many ppl on here who are more interested in everyone being equally poor than being interested in building wealth. Imo It's an insidious poison for the wealth creation mindset.

Its really no wonder why the vast majority of folks in society are not financially free.

 

Some very interesting comments here.