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Suburbanites Infected by "Wealth Building"
Topic Started: 10 Oct 2016, 03:20 PM (1,426 Views)
Terry
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How Bloomie describes our suburbanites' behavior...

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Beset by lending curbs and bubble-esque prices, first-time home buyers in Australia are turning to a rapidly growing source of finance: The Bank of Mom and Dad.

More parents are taking advantage of record-low interest rates to refinance their properties and help their grown-up kids onto the housing ladder amid sky-rocketing house values. Digital Finance Analytics estimates the number of Aussies getting help from their parents has soared to more than half of first-home buyers from just 3 percent six years ago.

Australia's housing rally has favored baby-boomers and locked out youth, compounding an inter-generational shift of wealth. As the number of bank loans to first-time buyers dwindles, the average slice of cash handed to them by parents has almost quadrupled in the past six years, DFA says. The downside: a market that the Reserve Bank of Australia is already wary of may get further inflated.

First-time buyers are "being infected by the notion that property is about wealth building, rather than somewhere to live,” said Martin North, Principal at DFA. That “may be tested if interest rates rise later, or property prices fall from their current illogical stratospheric levels.”

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Sydney, where values have risen more than 90 percent since the end of 2008, remains the priciest city; it was last month named the world’s fourth bubbliest market by UBS Group AG.

The boom is turning some homes into cash dispensers. More than two thirds of owners that refinanced houses worth more than A$750,000 did so to extract capital for reasons including helping their kids. Near the start of 2010, the average helping hand from parents was about A$23,000; today, it's more than A$80,000.

Aussie first-time buyers had a somewhat easier time a decade ago, thanks to government grants to help them enter the market. The assistance has since been scaled back.

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http://www.bloomberg.com/news/articles/2016-10-09/meet-mommy-and-daddy-australia-s-fastest-growing-mortgage-lenders
Edited by Terry, 10 Oct 2016, 03:21 PM.
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Khaderbhai
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Wealthy Suburbanite

Terry
10 Oct 2016, 03:20 PM
Sydney, where values have risen more than 90 percent since the end of 2008
Do you regret believing Steve Keen in 2008 when he promised the 40% crash?
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Terry
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Khaderbhai
10 Oct 2016, 03:57 PM
Do you regret believing Steve Keen in 2008 when he promised the 40% crash?
Talking to yourself mother cat or Bloomie? The article makes no reference to Stevie Keen or a "crash". It's focused on the behavior of the suburbanites.
Edited by Terry, 10 Oct 2016, 04:34 PM.
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Khaderbhai
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Wealthy Suburbanite

Terry
10 Oct 2016, 04:32 PM
The article makes no reference to Stevie Keen or a "crash"
It says Sydney prices are up 90% since 2008. And 2008 happens to be the year when Steve Keen predicted the 40% crash, which suckered you and many others into either selling a home, or delaying a property purchase. Just wondering if you regret that decision Roddy?
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Terry
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Khaderbhai
10 Oct 2016, 04:44 PM
It says Sydney prices are up 90% since 2008. And 2008 happens to be the year when Steve Keen predicted the 40% crash, which suckered you and many others into either selling a home, or delaying a property purchase. Just wondering if you regret that decision Roddy?
Nope mother cat. The fact that house prices are up 90% since 2008 is not the focus of the article. Neither is the following:

First-time buyers are "being infected by the notion that property is about wealth building, rather than somewhere to live,” said Martin North, Principal at DFA. That “may be tested if interest rates rise later, or property prices fall from their current illogical stratospheric levels.”

It's simply Martin North trying to explain the behavior of their suburbanites, not the actual behavior itself.
Edited by Terry, 10 Oct 2016, 05:03 PM.
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Khaderbhai
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Wealthy Suburbanite

Terry
10 Oct 2016, 05:01 PM
The fact that house prices are up 90% since 2008 is not the focus of the article.

It's simply Martin North trying to explain the behavior of their suburbanites, not the actual behavior itself.
Well Roddy, I think the rise in house prices since 2008 is more interesting than your waffle about "suburbanites".
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Terry
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Khaderbhai
10 Oct 2016, 05:54 PM
Well Roddy, I think the rise in house prices since 2008 is more interesting than your waffle about "suburbanites".
Not me mother cat. Best you take it to Bloomie and Martin North. Fire up the creepy clown.
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Khaderbhai
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Wealthy Suburbanite

Terry
10 Oct 2016, 06:34 PM
Not me mother cat.
Yes, you Roddy. Bloomie and Martin North said nothing about "suburbanites".
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Terry
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Khaderbhai
10 Oct 2016, 06:37 PM
Yes, you Roddy. Bloomie and Martin North said nothing about "suburbanites".
Of course they did. Without the suburbanites, the dynamics could not be measured.
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Khaderbhai
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Wealthy Suburbanite

Terry
10 Oct 2016, 07:54 PM
Of course they did.
Can you quote the part where they waffled about "suburbanites" Roddy?
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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