Australians

Spamalot
Spamalot

Australians: commonwealth bank has suspended all further loans on investment residential property.

We could see other banks follow suit.

Maybe see a swathe of asset holders on 25 year mortgages holding the unsellable that's giving ROI of 2% without taking into account running costs.

This may finally be it, the popping of the biggest bubble in human history.

All urls found in this thread:

youtu.be/czyG7UgRWTM

farquit
farquit

Buy foreign assets.

Bidwell
Bidwell

Maybe see a swathe of asset holders on 25 year mortgages holding the unsellable that's giving ROI of 2% without taking into account running costs.

what percentage of the market do you think that is?

Playboyize
Playboyize

what did u expect from a bank with ancap logo>?

ZeroReborn
ZeroReborn

when you hire private police to drown a hobo for poaching a feral ram that wandered onto your property

Nojokur
Nojokur

20-25% gross
Maybe 10% to 15% in total have mortgages encouraged by negative gearing

Techpill
Techpill

I've found 3 or so articles from BAKA, The Financial Review and news.com.au reporting on the freeze 4 days ago. If it's been out this long, I would have thought this would be bigger news.

If this has the potential to pop the bubble as OP infers, why wouldn't this be bigger news? Especially with all the talk recently regarding the housing market in Sydney, Joyce's comments making headlines last week and all. Is it because many Australian investors simply refinance with their mortgage to buy additional properties, as the new approach does not affect this aspect of investment?

PackManBrainlure
PackManBrainlure

Sorry, I was unaware of the Sydney Morning Herald acronym's similarity to that of shaking my head. Please substitute BAKA with the Sydney Morning Herald.

Snarelure
Snarelure

KOK

Gigastrength
Gigastrength

Isn't in merely because they were exceeding the regulatory lending limits?

Stupidasole
Stupidasole

If other banks follow suit it's time to worry

All 4 big banks exceeded that in early 2016

Bidwell
Bidwell

my parents have investment houses on loans and the houses have decreased in value since they bought them, are they fucked?

Poker_Star
Poker_Star

Yes.

SniperGod
SniperGod

what should they do?

Fried_Sushi
Fried_Sushi

Where the fuck do your parents live if their investment houses have dropped in value...?

TalkBomber
TalkBomber

the houses have decreased in value since they bought them

Yes, they are. I mean everyone makes a decent profit out of their investment properties, how stupid your parents are?

idontknow
idontknow

My uncle just got a loan through CBA and bought an investment property, how fucked is he?

Methshot
Methshot

Its probably spending limit per period so each 3 months

How long will the big banks have to hold of from giving loans, for house prices to crash?

Also without loans form the banks, the economy will slow right down seems a bit silly to let the banks quit cold turkey on ledning

Illusionz
Illusionz

Also without loans form the banks, the economy will slow right down seems a bit silly to let the banks quit cold turkey on ledning

Ding ding ding.
This is actually what the reserve bank want. Inflation is in the back of everyone's mind right now.

Fried_Sushi
Fried_Sushi

The newspapers especially rely of property advertising for income. In their own bottom line interests they can't negatively report too much on something tied to income stream they rely on.

Like another poster said if the other banks apply the same freeze there won't be any refinancing and this will have a definitive effect on the market

Garbage Can Lid
Garbage Can Lid

tfw i'm moving back to australia in two years
holy shit i hope the housing market crashes right on time for me to buy in

Methshot
Methshot

B O O M E R T E A R S
O
O
M
E
R
T
E
A
R
S

Skullbone
Skullbone

I hope this is true.

Sydney property market here i come

yes, but if they have income maybe not fucked
fucked if cash rate is increased

MPmaster
MPmaster

Bigger than you think. When all those people lost their homes in 2008/09, many of the newly empty homes we bought up super cheap and spun into the rental market. Those rentals were then bundled into new securities, similar to what caused the original crash in the first place.

w8t4u
w8t4u

we're talking about australia here m8

King_Martha
King_Martha

What and pay two to everyone dollar maybe more once Australia currency is devalued.
no thank you

Methshot
Methshot

invest in S&P
AUD nosedives, housing market crashes
cash out investment for big $AUD
purchase house
what's not to like?

AwesomeTucker
AwesomeTucker

BUT WHAT DOES THIS MEAN FOR ME
WHEN WILL PRICES DROP
HOW FAST
WHEN
HURRY UP I HATE RENTING I WANT A HOUSE
FUCKING BOOMERS

PurpleCharger
PurpleCharger

Hello all australians...

I am an amerifat who has wandered into the thread.

StrangeWizard
StrangeWizard

HELLO AMERICAN YOUR BUBBLE COLLAPSED DOES THIS LOOK LIKE THAT I WANT TO BUY A FUCKING HOUSE FUCK

Supergrass
Supergrass

I went into NAB 3 weeks ago asking if they'd refinance my house back to 80% LVR so I can buy an investment and they said no problem

I didn't sign the paperwork though so I can't say if it would have been approved by the next level of people

Nude_Bikergirl
Nude_Bikergirl

the only bubbles I care about are in this soda I'm drinking along with my 3 sandwiches from McDonalds

5mileys
5mileys

They're called burgers, not sandwiches :-)

Sandwiches don't have grilled patties in them, that's how you can tell the difference. Eg bacon, cheese, lettuce, that's a sandwich. A dripping beef patty and other fried matter, that's a burger.

Emberfire
Emberfire

he doesn't call them ground beef patty sandwiches

VisualMaster
VisualMaster

Doesn't matter where you live if you buy at the absolute top of the market.
Here, I spent 10,000 hours in paint to illustrate where parents are at right now

Methshot
Methshot

This is so correct it's not funny.

This will either crash and burn like we've never seen or be the most prolonged shitty era of stagflation where you literally can't give homes away.

Keep in mind there's 23 million people in Australia and about 10,000,000 dwellings.

Investors in residential are fucked once this turns

New_Cliche
New_Cliche

Inflation is already below target and the RBA predicts inflation to rise still, although I guess there still is business investment

BlogWobbles
BlogWobbles

B O O M E R T E A R S
It's going to be so good.
I'll relish lowballing them, watching them huff-and-puff about "Muh value", then either just walk away laughing because there's a better deal across the street, or accept it and watch as their dreams fall apart in front of their eyes.

Fuck'em.

LuckyDusty
LuckyDusty

I'm going to save that.
Cheers.

w8t4u
w8t4u

ho le fuk

tfw my parents have >1 million mortgage including the debt of their 'investment' houses

its game over

Bidwell
Bidwell

the bubble isn't popping

you guys are so dumb

Soft_member
Soft_member

he doesn't call them steamed hams

Methshot
Methshot

People have been saying the housing bubble will pop for the last 10 years.

How long can a bubble exist?

likme
likme

Longest in history
banks no longer have asset value and cash reserves to cover retail debt
household income alone can't cover repayments

The answer to this is simply this is so precariously balanced that any major external event which impacts Australia eg trumps war with China our biggest trading partner, Australia's entire economy could flush down the toilet within 1 financial year.

The fallout could be the entire value of the mortgage some professionals predict.

youtu.be/czyG7UgRWTM

Deadlyinx
Deadlyinx

the fun starts when your parents want to sell their property at the same time everyone else, then the value plummets and they sell it for 250k whilst still owing the bank 1M

Skullbone
Skullbone

As an investment residential homes are financial suicude currently
This as an investment vehicle makes far more sense than

Mums and dads who do not understand Contract law are the only people investing in residential RE in Australia right now.
This is why CommBank has froze all further loans as the public doesn't know what's good for it

WebTool
WebTool

Threads like this make me so erect

tfw portfolio 60% overseas and 20% cash

Spazyfool
Spazyfool

I can confirm all major banks have collectively decided to freeze margin loans to Superannuation funds (self-managed), none of my bank contacts have said anything about all investment property loans, but this subsection of margin lending due to government pressure.

StonedTime
StonedTime

Bankwest has confirmed that property investors are no longer able to include the tax benefits of negative gearing when applying for a home loan from the institution.
In an emailed statement, a Bankwest spokesman said its loan serviceability calculators were updated on Friday to remove negative gearing tax benefits, "in line with regulatory guidance".

"This change aligns Bankwest with industry best practice and guidance from regulators, specifically APG 223 within the Residential Mortgage Lending prudential practice guide," the spokesman added.

Bankwest is a bit late to the party, with the bank regulator APRA's boss, Wayne Byres, speaking disapprovingly of the practice of including negative gearing benefits in loan assessments almost two years ago, after an APRA survey showed what Mr Byres labelled "disconcerting" lending practices.

"We also came across a few instances in which ADIs [authorised deposit taking institutions] were relying on anticipated future tax benefits from negative gearing to get a borrower over the line for a mortgage," he said in the May 2015 speech.

Mortgage brokers say including the benefits of negative gearing in investor loan assessments is still a widespread practice, with Westpac having excluded it for a while last year before changing back.

StrangeWizard
StrangeWizard

So to clarify...

People would apply for $500,000 loans with a 5% deposit, pay LMI and factor in assumed 'rental income' from the property into their income used to qualify for the loan.

They would also factor in capital depreciation, negative gearing etc. in order to 'qualify' for a mortgage they can only afford if the stars align

And we're meant to panic when banks decide it doesn't actually make much sense?

Just trying to make sense of how poor the average '$5m property portfolio investor' really is

Nojokur
Nojokur

Sorry, gross error made in that post.

They don't actually have a 5% deposit - the 5% stems from 'equity' in another one of their bank-owner properties

Fried_Sushi
Fried_Sushi

Yeah, maybe... maybe not.

People have been saying that for years... I was going to buy 3 years ago, but decided not to, and now everything has gone up 40% where I want to buy....

We're definitely not past the peak yet. Prices increased 3% in December alone, and just as much in January.

TalkBomber
TalkBomber

This.

Demand for loans and property isnt going anywhere.

GoogleCat
GoogleCat

I love how I'll be renting until I'm 40.

Fuck this shit, but the rest of the world is fucked also.

I'm getting a trade.

Illusionz
Illusionz

not as fucked as Oz

We're definitely not past the peak yet. >Prices increased 3% in December alone, and just as much in January.
The belief of boundless capital gains in this country is what is causing the problems. I'm not convinced there will be a crash because if things start looking grim rather than try to change landlords expectations and beliefs systems they'll just throw the gates open for unhindered immigration like Germany has.
Boom- instant housing shortage and prices skyrocket.
The underlying problem is wage growth hasn't matched capital growth in australia. So it's essentially a system that is working against non boomer generations of Australia.

Illusionz
Illusionz

It's not being too high that's the problem- it's too low

RumChicken
RumChicken

So it's essentially a system that is working against non boomer generations of Australia.
And yet "Back in my day... Get a real job... Why don't you just buy more money... You don't need University, you need hard work... School of Hard Knocks..."

RumChicken
RumChicken

This seems to be happening all around the world in every major international city - the prices get too high and the goys can't afford to buy, so the property stays within the weatlhy and eventually everyone is renting, like London. Not surprising, Melboune is a great city and up there with the best.

My parents now have a property thats now worth 1.2 million, they paid $100,000 for it 20 years ago. They get offers from developers all the time who want to buy up all the land and turn it into an apartment complex.

Firespawn
Firespawn

household debt going up and not stopping, whilst income remains stable and cost of living goes up == less money. We have raised our deficit back to only about 10billion through harsh liberal policies but we're still fucked, you can quote me on that.

hairygrape
hairygrape

Bruh
I wish I was a boomer
Pay off your 30 year mortgage and sit on your property like scrooge McDuck making mad rental gains

CouchChiller
CouchChiller

Parents just spent upwards of $50k renovating the house
House is now worth near a million
Tell them to sell because of the impending bubble burst
"Hmm.. we'll hold onto it for another 10 years we think"

Haha, oh boy..

CodeBuns
CodeBuns

RIP

Although I think all of our parents are absolutely fucked here.

But our generation will have cheaper housing soooo....fuck em?

whereismyname
whereismyname

I'm a neet who is probably going to inherit a house in Sydney in the next few years (single child to old single parent)

The house is fully owned and there's a fair bit of money in the bank too

What would be the best thing to do with it?

I was thinking of renting it out and moving to Dubbo or something for ultra cheap rent, but I don't know anything about managing property. I just want to something risk-free that retains my house and will give me at least a small passive income.

And what influences council rates exactly? What's the future outlook for that?

Need_TLC
Need_TLC

They didn't do it as a reaction to the market, they did it has a reaction to incoming legal issues. Wait a week or two and you'll see.

Emberburn
Emberburn

Do you Oz fags actually do 25 year, 80% ltv fixed mortgages?

30 year fixed mortgages, at 4%-4.5% with 80% LTV rates seem to be the norm for some reason in America.

But I always thought we were unique for 30 year, 80-97.5 ltv fixed rates

Soft_member
Soft_member

Good thing about it being in Sydney is that it will retain much of its value, even if the bubble bursts due to it already being grossly overpriced, and being in such a famous and overpopulated city.
I would also recommend slight upgrades here and there.
Pay a few grand to install a swimming pool, or even building a shed etc. The cost of upgrading will be nothing compared to the value it will add to your property.

But you're in a great position anyway. I'd kill to have a house in Sydney handed to me.

BunnyJinx
BunnyJinx

No most mortgages here are variable not fixed.

StrangeWizard
StrangeWizard

Will this effect share price?

Ignoramus
Ignoramus

Agreed,
i really want to see what this is about however

Nude_Bikergirl
Nude_Bikergirl

If its a prime location for tourists, airbnb and be a maid.
I have friends in South Yarra in Melbourne clearing $3000 a week for a large house they own there. I've been told of figures like $5,000 a week on the Esplanade in St Kilda but I simply can't believe that.
You can even pay a cleaning company to manage the cleaning and still make good profits, if the location is right. Just make sure you can get you're $300-400 per night and you're set.
Tell work to piss off.

Stark_Naked
Stark_Naked

so how can i make money out of this

happy_sad
happy_sad

Does anyone have any information about how many major banks have confirmed their exit of the Superannuation Industry? Or have sold off all/part of their wealth management branches?

This is an important final piece of the puzzle to a Marxist conspiracy I've been researching.

Buy on the dip which will come from a combination now of about 4 or 5 events/factors.

happy_sad
happy_sad

Australian superannuation particularly industry funds are all propped up by lies.
The growth rates they quote are completely fictional

Boy_vs_Girl
Boy_vs_Girl

kek

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