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Housing credit growth worst on record

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Australian Broker | 01 Jul 2011, 03:00 AM Agree 0
Credit demand slowed in May, with home loan demand showing its lowest growth on record
  • sidbroker | 01 Jul 2011, 11:49 AM Agree 0
    The so called and much heralded new credit act, NCCP is LARGELY RESPONSIBLE for this downturn. The future will show if i am right or not. How any govt. (Rudd, Swan, Gillard and company)could be so irresponsible to inflict the limmitations of this act on all of us is inconceivable. We did not have any part in GFC as we already had in place responsible lending which by and large was regulated by the people doing the lending. ie Banks and Non Bank Lenders. These people were way to smart to lend money to irresponsible people unlike what happened in the US. So now where does that leave all us. Looks to me that we are struggling. How do we fix it? I have the answer but i don`t have the power.
  • Martin J. Rollins MPIA | 30 Aug 2011, 05:35 PM Agree 0
    I'll go on the record and disagree with the last comment in the above article.

    ....Dale blamed supply side obstacles and weak demand, which he said was exacerbated by "incessant chatter" about a "fictitious" housing bubble.

    Ficticious? Well, let's pull this a part just a tad.

    Steven D. Levitt (an economist) at the University of Chicago wrote a book that was essentially all about 'causation'. What those of us less learned souls might refer to as 'some stuff that indirectly or directly lead to some other stuff happening'.

    In Australia the 'stuff' that's happening here (in this topic) is that less people want to build, buy or refinance properties.

    What's the reason behind this 'stuff' happening.

    Is it because of carbon tax? nope! What about the price of fish n chips?? Nope again... I wonder what it could be?

    Could it be that people are stalling purchasing because their wages havent appreciated in a similar fashion to houses over the last ten years AND they simply can't afford to in-debt themselves to the gills in order to satisfy an executives salary bonus ????... hang about, you might be onto something here.

    What could possibly confirm this big assumption?

    Hm, I wonder if the massive increase in National savings tells us anything. Well yes it does... people are DEFINITELY holding onto their money, and additional evidence of that is found in 'other' economic data in regards to retail spending, it's down!

    If you superimpose a ten year graph (Economists love these things) of housing appreciation over a ten year graph of wage appreciation, you just might find your cause.... and its effect is (wait for it Dale) people can't afford to buy your product.

    Ficticious is something that doesn't exist; are you as an Economist arguing that Cause and Effect doesn't exist? I'm willing to bet on the aggregate of Aussies, and, like all of them would argue that housing in Australia is over-priced to the hilt!

  • mortgageandlease | 31 Aug 2011, 09:38 AM Agree 0
    Mr Martin J Rollins.

    You are right on the money. Housing costs are far and above what they should be comparable to salary. Even with 2 incomes, couples are attributing 40% - 50% of their net salary in some case just to cover mortgage and house costs. That really does not leave much left over for living and in a lot of cases commute costs just to earn that income.

    Real Estate Agents advertise $350 - $400 K property as first home buyer / entry level property.

    New construction costs in any city is near $300 - $350K as well. You can't find a decent size block under $150K - $200K and cost around $200K to build a 1/2 decent house and deck it out.

    There is your problem. People have come to the realisation that they cannot afford it and don't want a $300K, $400K, $500K mortgage around their neck for the next 25 - 30 years.
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