Sir lastnail wrote on Sep 12^th, 2010 at 4:04pm:


Take a look inside your computer and see where these chips are made... ASIA.

longweekend58 wrote on Sep 12^th, 2010 at 3:58pm:


Yes but you would be the first to expect someone on low wages to pay over inflated prices for a house in a property bubble. You can't have it both ways.

Sir lastnail wrote on Sep 12^th, 2010 at 4:08pm:



But nails, even you must realise that eventually the housing 'bubble' will burst and house prices WILL drop back into line with wages.....

The credit companies are, currently, holding housing prices artifically high....so they can demand higher interest rates...

This cannot and will NOT continue...

gizmo_2655 wrote on Sep 12^th, 2010 at 4:12pm:


that is nonsense. anyone who has ever read about - never mind studied - eceonomics knows all bout the value of goods and that this 'value' is given by the CONSUMER/CUSTOMER, not by some other regulatory or third party buyer. House prices are what they are simply because that is what people are willing to pay. Now you might say that it is a bubble. maybe you are right maybe you are wrong but it is a price generated by DEMAND.  The most likely result wil be a small correction of perhaps 10% sometime soon followed by flat-lining prices for a few years while inflation and wages catches up. The class example of how this principle operates is that 30 years ago houses only required a single income to be bought, however at that time dual income families were quite rare. The houseing prices matched the market-places expectations and ability to pay. when dual income families became the norm house prices became much higher because - shock horror - people had more money to pay and so did exactly that.. pay more. It is no more complex than that. A recession causes houe prices to fall because... people have less money. a boom casues prices to rise because people have MORE money. and just liek in stocks, if house prices get out of kilter with their actual intrinsice worth there comes a correction. Usually in the 5-15% range. The US example is not the same as the housing market collapsed over there for very very different reasons. Primarily because of the structural condition of their economy. House prices merely led the way for the rest of their hosue of cards to collapse. Australias economy is vastly different and essential stable.

gizmo_2655 wrote on Sep 12^th, 2010 at 4:12pm:


that is nonsense. anyone who has ever read about - never mind studied - eceonomics knows all bout the value of goods and that this 'value' is given by the CONSUMER/CUSTOMER, not by some other regulatory or third party buyer. House prices are what they are simply because that is what people are willing to pay. Now you might say that it is a bubble. maybe you are right maybe you are wrong but it is a price generated by DEMAND.  The most likely result wil be a small correction of perhaps 10% sometime soon followed by flat-lining prices for a few years while inflation and wages catches up. The class example of how this principle operates is that 30 years ago houses only required a single income to be bought, however at that time dual income families were quite rare. The houseing prices matched the market-places expectations and ability to pay. when dual income families became the norm house prices became much higher because - shock horror - people had more money to pay and so did exactly that.. pay more. It is no more complex than that. A recession causes houe prices to fall because... people have less money. a boom casues prices to rise because people have MORE money. and just liek in stocks, if house prices get out of kilter with their actual intrinsice worth there comes a correction. Usually in the 5-15% range. The US example is not the same as the housing market collapsed over there for very very different reasons. Primarily because of the structural condition of their economy. House prices merely led the way for the rest of their hosue of cards to collapse. Australias economy is vastly different and essential stable.

Mortgage Lenders Returning To Reckless Practices

MORTGAGE lenders are returning to "reckless" practices last seen before the credit crunch, lending desperate homebuyers more than a property is worth in a bid to keep the market rising.

Next month, non-bank lender Mortgage House will offer a home loan equivalent to 105 per cent of the property's value - the most generous deal since the global financial crisis kicked in three years ago.

The company also offers a 99 per cent loan-to-value ratio loan, which it launched last month, and says applications have been flooding in.

"Demand is really strong; people are finding it difficult to save substantial deposits" Mortgage House CEO Ken Sayer said.

But it's not just the non-banks that are splashing the cash.

Last week, Westpac raised its LVR for new customers from 87 per cent to 92 per cent, reversing the cut it made back in January; while ANZ also last week raised the maximum LVRs from 95 per cent to 97 per cent for existing customers, and from 90 per cent to 92 per cent for new borrowers.

Commonwealth Bank has left its LVRs unchanged, at 97 per cent, but is trying to attract extra business by increasing its discount from 0.6 per cent to 0.7 per cent on loans taken out before the end of October.

With affordability at near-record lows, experts say banks have had to loosen their lending criteria or see potential buyers priced out of the market. "Banks need to keep on lending but, with house prices rising, they have to lend more - Westpac customers will now be able to borrow almost double what they could before," University of Western Sydney economics professor Steve Keen said.

"Little changes in LVRs have a massive impact on what you can borrow. If you need a deposit of 13 per cent and have $50,000 saved up, that cash will enable you to spend $384,000 on a property.

"But if the bank will lend 92 per cent, your $50,000 will allow you to buy a property worth $625,000."

Westpac denied it was fuelling house-price growth and said the falling unemployment and strong economy were behind its decision.

"This change reflects our growing confidence in the economic environment, reflected in the low level of delinquencies for this market segment," it said.

ANZ's motives are less clear: the company refused to comment.

Mortgage House's 105 per cent deal is targeted at first-home buyers, helping them cover costs associated with entering the market.

But it denied that it constituted irresponsible lending.

"We are being very particular about the borrowers we are lending to, and the types of properties they're buying" Mr Sayer said.

"Unless the borrowers have a good credit record - and the properties are readily saleable - we'll be much more conservative."

But John Symond of Aussie Home Loans warned a return to pre-GFC-style lending would be disastrous.

longweekend58 wrote on Sep 12^th, 2010 at 4:21pm:


Rubbish. The housing market as been distorted for years by Government intervention with tax payers money and taxation policies that favor speculation. As a result the bubble has been overinflated when the rest of the world has been deflating or bursting.

And what is our fame to claim ? Virtually zero manufacturing and just a pile of minerals in the ground. No more or less than other countries that have gone into recession.