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Interest only property bunnies at greatest risk - 89% think they don't have to pay off capital
Topic Started: 9 Sep 2014, 06:35 PM (8,433 Views)
miw
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goldbug
10 Sep 2014, 11:11 AM
Bullshit. Don't try and dismiss a fact just because some obscure exceptions to the rule. Average Australians never had access to IO loans prior to the last leg of the housing bubble here in Australia. Before deregulation banks were a lot more prudent. Here is what other coutries think of them.
Total rubbish. IO loans were fairly standard for investment loans going back to at least the late 1980s when it started to be possible to get investment loans at all. Much more likely to be applied to commercial property investments than residential, for sure.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Bardon
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Silence is golden.

But I have at least taken a mental note that the one with the several children will buy by 2018.
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John Frum
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K-town
10 Sep 2014, 12:04 PM
So you can be dismissed with 30 days notice?
Yes.

But so what? I'm a contractor. That's the nature of the beast.
Dr Watson
10 Sep 2014, 12:09 PM
Feel free to kid yourself but that is absolute, utter nonsense. The performance of the property market has no direct link to your contract rates. Your employer does not say, "Sydney housing did well in August, let's give Frum an increase." The supply of similarly experienced and skilled contractors that you compete against is far more relevant.
Ok sure, you want to play this literally because you're an anally retentive, over-leveraged, recently converted property bull that's scrabbling for a leg up in this argument.

Technically no, my pay is not indexed to the performance of the housing market.

But the contract rates in banking are at least at a 30-40% premium over the standard market rate for equivalent work in other industries, and there is simply no way that this correlates with the extra difficulty of the job. Sure you have to be more careful and thorough when dealing with other people's money, but they're no innovation-tech-start-up-hub brimming with ambition like Google (which also deals with sensitive data). They just happen to be flush enough with money to pay for the best, and not have to bother milking their talent as hard as they could.

And undoubtedly this ability to underutilise labour would not be possible were it not for these huge piles of debt assets, owned by the banks, and ticking over constantly with easy money. So there is a premium being paid out of a mortgage holder's pocket to me here.

When the champagne stops flowing I imagine there will be large cutbacks at the banks. But I've been here before, I was in Europe during the GFC so I know what to expect - often demand for contractors increases during downturns, as companies realise that they've overshot with their downsizing.

Bardon
10 Sep 2014, 08:58 PM
Silence is golden.

But I have at least taken a mental note that the one with the several children will buy by 2018.
...and that he predicts the wheels to start falling off the aussie economy in earnest in around a year's time.
Edited by John Frum, 10 Sep 2014, 11:54 PM.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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goldbug
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miw
10 Sep 2014, 02:55 PM
goldbug
10 Sep 2014, 11:11 AM
Bullshit. Don't try and dismiss a fact just because some obscure exceptions to the rule. Average Australians never had access to IO loans prior to the last leg of the housing bubble here in Australia. Before deregulation banks were a lot more prudent. Here is what other coutries think of them.
Total rubbish. IO loans were fairly standard for investment loans going back to at least the late 1980s Much more likely to be applied to commercial property investments than residential, for sure.
The late 80's...
Much more likely in commercial loans...
You just agreed with my statements. What was the percentage of residential in the late 80's? Nonexistent I would wager. You bulls just can't see how distorted the market is, you regard every distortion as a normal market factor just because it was in place during the last big doubling in prices.

Around 50% of all home units sold for the past 5 or 6 or more years have been bought by investors so called. And 89% of the loans to buy them are IO. They have deferred payment of the homes for what, 10 years? And now as the time or capital repayment approaches we find that the assets have not risen in value by much and the rental returns for the majority have been declining in real terms for years.

And you don't see any problem in this. Those million odd property investors are not going to have a problem repaying 300 billion+ in capital in this sort of economic environment?
Edited by goldbug, 11 Sep 2014, 12:09 AM.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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szokolay
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I think he's got a point.
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Frank Castle
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Business As Usual

szokolay
11 Sep 2014, 12:13 AM
I think he's got a point.
This is the only point that dipshit has

Posted Image
Edited by Frank Castle, 11 Sep 2014, 12:32 AM.
Ignore posts by The Whole Truth · View Post · End Ignoring
The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
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Bardon
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John Frum
10 Sep 2014, 11:14 PM

...and that he predicts the wheels to start falling off the aussie economy in earnest in around a year's time.
Each to their own.

But I suggest that you have an Option B, to help cushion the psychological blow if it doesn't pan out that way.
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Bardon
11 Sep 2014, 08:51 AM
Each to their own.

But I suggest that you have an Option B, to help cushion the psychological blow if it doesn't pan out that way.
Is all your property in Queensland and how many interest only loans are you paying to maximise your wealth ?
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goldbug
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Frank Castle
11 Sep 2014, 12:31 AM
szokolay
11 Sep 2014, 12:13 AM
I think he's got a point.
This is the only point that dipshit has
(Some picture I found on the web, but not one used to illistrate my personal finances this time)
You're a little schizophrenic this month frank.
frank on monday: back on the ignore list where you belong gb
frank on tuesday: rabbit rabbit rabbit gb, blah blah blah gb.

Either I'm ignored or I'm not frank?
Either you own your cheap flooders outright or you... don't perhaps?
A man is only as good as his word.
Bardon
11 Sep 2014, 08:51 AM


But I suggest that you have an Option B, to help cushion the psychological blow if it doesn't pan out that way.
The same could be said for the millions of property investors who have flooded the market in the past decade. But they don't have a plan B do they? Aside from all putting their properties on the market at the same time and know how well that plan will work.

If it wasn't for the douchbag IO loans most might be able to weather a big downturn by drawing on the equity, but not as it stands.
" Don't worry, house prices always go up and rents go up with wages so you're safe, it can't fail. Just sign your PPOR over to us here on the dotted line."
Edited by goldbug, 11 Sep 2014, 09:38 AM.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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Bardon
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Guest
11 Sep 2014, 09:03 AM
Is all your property in Queensland and how many interest only loans are you paying to maximise your wealth ?
No and all of them. 105% for each IP.

Even my own personall joint which was paid off and is now getting a major reno is in an IO loan now as well, I think I might keep it so.
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