Recession over - Things looking Up!

The changes to responsible lending require changes to legislation. Even if that happens, the changes are a long way off and the effects will be to remove those powers from ASIC, which would mean banks are no longer required to scrutinise living expenses forensically. The effect will not be to remove powers from APRA, who determine assessment rates, the treatment of IO debt etc. It may make credit approval faster. Its unlikely to boost capacity much, for most people. Myself and several others have already calculated the impact of this proposed change + the tax cuts and the results were modest at best for almost all circumstances. Better? yes... By much? no . Sensitised principle and Interest remaining term being abandoned ( SPARTA) is what is required to get the investor borrowing capacity rocket people are looking for

What I have argued is that without a reduction to assessment rates, credit growth was unlikely. What I have argued is that without a reduction to interest rates to provide a cushion to P&I migration, things could have become problematic for some investors holding costs. And both of those things happened exactly as I suggested they would. I haven't ever argued prices "had a long way down for years". But what I have argued is that debt reduction is more important then it used to be, in order to protect borrowing capacity and holding power . My view on that is unchanged, because unless you get SPARTA ( see above) , when the stimulus ends, APRA's rules will still be operating

What is happening now is unrelated to those things; it is related solely to vast sums of money being made available to pull vast numbers of buyers into the market at a time when unemployment has risen to levels that would at any other time create huge trouble, and when many employers very viability is being protected solely by subsidies that will be withdrawn next year. My question is... what happens if or when those artificial supports are withdrawn? Will umemployment rise? Will delinquencies experience a 2nd wave? Will all of this be proven to be a sugar hit / fools gold? Will this set the foundation for a huge bubble 4 or 5 years down the road? I don't know the answer. No one does. We haven't ever been in this situation before. But its reasonable to ask; is this real, or is it illusion/delusion?