The RBA devalues the AUD 5% to 5.5% every year. Hence banking savings is in the long term made useless. Hence tangible assets such as property become the vehicle of savings. Hence the popular tangible assets are in a perma bubble of varying degrees. It's that simple!
The next trick of our glorious banks will be to charge us a fee for using net bank!!! You are no longer customer, you are property!!!
Too late Glenn, you and your buddies have spawned your Frankenstein - all you can do now is sit back and watch it wreak havoc.
The all-out bull assault will continue unabated.
+1
I think the bull run will go well into 2015, ppl blinded by the potential gains couldn't care what Stevens says. Most ppl believe we have the RBA over a barrel and they will not raise rates, in fact must ppl I speak to are certain they won't rise and hint to potential falls.
By the time the sentiment changes the bubble would have exploded all over their pants!!!
Nothing is ever is a straight line… the AUD is one of the few (only?) major currencies that is AAA rated, and current domestic interest rates cannot be lowered (hence a massive global carry trade) without some major prudential slap to domestic housing market – which is already out of control, especially in Sydney. Even then, that won’t stop wealthy Chinese buying houses because they don’t need debt to do so.
The RBA are in a serious bind. They desperately need to lower interest rates – but how? (I don’t have the answer – but make no mistake, they are going to have to drop).
This suggestion maybe a little left field – but if the government raised taxes substantially, that would lower aggregate demand sufficiently that lowering interest rates could be off-set without a last speculative boom… in all honesty, I am out of ideas on this one. With IO and coal prices at these levels I would have expected the AUD to be in the 70′s by now – approaching the 60′s… but it isn’t going to happen this time.
A really nuts idea would to borrow hundreds of billions of dollars at basically zero percent and raise our reported Government debt holdings to make us economically unattractive???
The baby boomer generation’s love of investment property could end in tears, according to the governor of the Reserve Bank of Australia, Glenn Stevens.
Mr Stevens, speaking after a speech that raised the prospect of a housing bubble, suggested property wasn’t the fail-safe investment many Australians believe it to be.
“We perhaps have been a little bit over keen on investment property as our retirement plan,” he said. “We may at some point be a little disappointed.”
The comments appear to be part of a carefully calibrated strategy by the central bank to dampen expectations about surging property prices, which by some measures have risen the most in the English-speaking world.
The comments were backed up by Aussie Home Loans founder John Symond, who said prices in Melbourne and Sydney have been “on fire” and could be unsustainable.
“I’ve been involved in housing and finance now since 1970, over 40 years, and I’ve never ever seen the market where interest rates are so low and the belief of consumers is that these rates are going to stay low for quite a while,” he said in an interview.
“So that gives them confidence to go and borrow.” Experts are split over whether property prices have risen too high. But a sharp fall could hurt the banking industry, which finances most mortgages, and hit the broader sharemarket. Mr Stevens said there was a need to avoid building up too much risk in the banking sector by individuals taking on too much debt, a reference to investors who borrow to buy property.
“That could leave the economy exposed to nasty shocks in the future. The more prudent approach is to try to avoid, so far as we can, that particular boom-bust cycle,” he said.
“It is stating the obvious that at present, while we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that.” Mr Stevens indicated to a function organised by the Committee for the Economic Development of Australia in Adelaide on Wednesday that it was the task of state and federal governments to help ensure price gains didn’t become unsustainable.
He said monetary policy could not add to the amount of land available for housing or improve the ability of the construction sector to respond to demand for extra housing.
“Other policies have to do that – and it’s important that they do, if we are to see easy credit result in more dwellings as opposed to just higher prices for the existing dwellings,” he said. “Monetary policy can’t create the additional infrastructure that most people agree we need. Funding conditions are not, in fact, an impediment to infrastructure.
“The real issues are governance, risk-sharing and pricing – areas where other policies have to be right.”
He said powerful demographic shifts have substantial impacts and the large numbers of people in the baby boomer category will have a large influence on the economy, particularly in the health sector. He said in answer to a question about the impacts, that baby boomers had been too reliant on investment properties.
There's no hope for me ever owning a home. I've been living in Sydney all my life and housing affordability was never an issue except for Eastern suburbs but even the inner west used to be cheap. Since the immigration wave from Asia (including India and partly middle east) I've noticed a change in Sydney society. There's no longer a desire to own boutique cottage type housing, instead cheapo apartments keep going up that look like socialist block country developments. The attitude of these non-continental immigrants is to scavenge and work ridiculous hours to help pay for the small piece of accommodation that used to be undesirable parts of Sydney. The real estate man has seen these and is taxing the poor buggers to the max! I don't see my self ever living in Kellyville. Not because of the ridiculously inflated price but I don't want to live next to people that buy McMansions at the expense of a balanced life. The overpopulation of Sydney is only going to make these far reach areas worse and with no transport the city will soon choke on itself as it has started to do. I have no desire staying here anymore. I thank the mismanagement of council and government at both levels for unrealistic immigration programs and the lack of respect for original residents such as myself to earn a decent living and existence in the city I grew up in. Sydney is a sellout, an overpriced piece of temporary gip rock. It's time to move where the Sth East Asia wave is not penetrating, even Canada has taken steps to lower immigration from these parts but I don't see it happening at the greedy hands of a sell out Sydney. Good Bye.
Beaten before you've started The attitude that FAIL is made with.
Ignore posts by The Whole Truth · View Post · End Ignoring The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
You have picked up a thing or two in your time here
Hah hah golly goo goo
I've said ages ago I'm not into the bull & bear stuff, I consider my self a realist. ..& no one can say they know it all.
Sometimes it does pay to toughen up & be realistic, the CG party is not as hot as what it was in previous yrs, however one can only keep looking at what bnefits them. There's always some potentials to provide PATIENT investors a good return.
The thing is We are not scaring the foreign investors ..think about that carefully in what it means.
Oh well, we are not all invincible & yes some do try to be too impatient to deserve the big house, a couple of expensive cars boat & techno stuff hols etc. Cannot always blame the pollies, we have to accept that the people vote with their feet with their spending trends.
So is Glenn Stevens passing the buck, in that there's only so much he can do?
Blondie girl
4 Sep 2014, 02:21 PM
Hah hah golly goo goo
I've said ages ago I'm not into the bull & bear stuff, I consider my self a realist. ..& no one can say they know it all.
Sometimes it does pay to toughen up & be realistic, the CG party is not as hot as what it was in previous yrs, however one can only keep looking at what bnefits them. There's always some potentials to provide PATIENT investors a good return.
The thing is We are not scaring the foreign investors ..think about that carefully in what it means.
Oh well, we are not all invincible & yes some do try to be too impatient to deserve the big house, a couple of expensive cars boat & techno stuff hols etc. Cannot always blame the pollies, we have to accept that the people vote with their feet with their spending trends.
So is Glenn Stevens passing the buck, in that there's only so much he can do?
Another thing.. The reason that the oz economy is so unbalanced is that the focus has been on Asia as the exports destination . Yeah it's impostant I'm not trying to downplay that but we've forgotten other countries in terms of services export stuff .
High wages & high welfare liabilities just don't make it better either.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
There's no easy answer. Some people do conveniently forget history, there's some who do understand a time of high IR of housing loans of even 16%, as opposed to the present easy peasy credit.
People should get their butts into gear in understanding what's really sustainable, & stop expecting the govt to protect us all. That's what the average people should uderstand.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
There's no hope for me ever owning a home. I've been living in Sydney all my life and housing affordability was never an issue except for Eastern suburbs but even the inner west used to be cheap. Since the immigration wave from Asia (including India and partly middle east) I've noticed a change in Sydney society. There's no longer a desire to own boutique cottage type housing, instead cheapo apartments keep going up that look like socialist block country developments. The attitude of these non-continental immigrants is to scavenge and work ridiculous hours to help pay for the small piece of accommodation that used to be undesirable parts of Sydney. The real estate man has seen these and is taxing the poor buggers to the max! I don't see my self ever living in Kellyville. Not because of the ridiculously inflated price but I don't want to live next to people that buy McMansions at the expense of a balanced life. The overpopulation of Sydney is only going to make these far reach areas worse and with no transport the city will soon choke on itself as it has started to do. I have no desire staying here anymore. I thank the mismanagement of council and government at both levels for unrealistic immigration programs and the lack of respect for original residents such as myself to earn a decent living and existence in the city I grew up in. Sydney is a sellout, an overpriced piece of temporary gip rock. It's time to move where the Sth East Asia wave is not penetrating, even Canada has taken steps to lower immigration from these parts but I don't see it happening at the greedy hands of a sell out Sydney. Good Bye.
Nail on head.
The equivalent of Canberra's population in immigrants floods in every year, yet we have red tape galore & fire hoops to jump through for developers.
Infrastructure cant handle it, Sydney is a lost cause the amount of lost productivity must be frightening.
Been saying it for a while now "get out of Sydney it has turned into a pit of over rated shit'.
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