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The Suburbanites are Tapped Out
Topic Started: 10 Jan 2017, 09:30 AM (3,168 Views)
Terry
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Served up on a plate. The more aspirational, the more tapped out. No wonder demand for cocaine is so hot.

--------------------------------------------

ustralia's wealthiest suburbs are among the most vulnerable postcodes in terms of mortgage stress.

Private data compiled by Digital Finance Analytics has captured 16,000 homes within 20 suburbs that are under significant financial strain.

For example, households in Melbourne's Toorak, where the median house price is $3.5 million, are five times more likely to default on mortgage payments than the national average.

Residents in the Sydney beachside suburb of Bondi are facing the same financial stress.

"Quite a few households are actually cash strapped, despite the fact that they're affluent ... and that's a really quite unusual phenomenon," said Martin North, founding principal of Digital Finance Analytics.


The analysis shows the extent to which wealthier households manage their finances over the next 12 months will be the acid test of whether Australia experiences a property crisis.

Mr North said these households - while currently enjoying the spoils of a once-in-a-generation house price boom - will be "disproportionately affected by even a small rate rise".

On Sydney's leafy north shore, in suburbs such as Hornsby and Gordon, home owners are already making late mortgage repayments.

"If you're a more affluent household, you'll tend to have higher costs," Mr North observed.

"You'll be going out and eating more, you've got bigger cash flow issues with regards to credit cards, say larger credit cards, and larger repayments on the credit cards, you have a more expensive car.
"So this is about lifestyle."

Next 18 months the 'acid test' for a 'property crisis'

The data also showed the probability of households in the riskiest 20 suburbs defaulting on mortgage repayments over the next 12 months ranged from about 3 to 5 per cent. A probability of more than 2 per cent is "significant", Mr North said.

Velocity Trade financial expert, Brett LeMesurier, said it is wealthier Australians with multiple properties that will be hit hardest by any interest rate rises, including independent moves beyond Reserve Bank decisions.

"Because that's where the banks have shown that they at the end of last year shown that they would target that's their preferred method of maintaining their margin, [targeting investor loans]," he told ABC news.

Mr North said if interest rates do rise, a growing proportion of households will be under pressure.

"These are the early warning signs of potential difficulties," he said.

"So how households will respond over the next 12 to 18 months, and how lenders respond and how regulators respond in a potentially rising market, is going to be the acid test of whether we end up with a property crisis, or whether we muddle our way through."


http://www.abc.net.au/news/2017-01-09/wealthiest-suburbs-among-most-vulnerable-postcodes-for-mortgage/8170338?section=business
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Simon_S
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LOL......Mortgages Stress........But I thought Debt was Wealth?

And to think its happening when Rates are at their Lowest.

What happens when they rise further........

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Terry
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Simon_S
10 Jan 2017, 09:36 AM
LOL......Mortgages Stress........But I thought Debt was Wealth?

And to think its happening when Rates are at their Lowest.

What happens when they rise further........

Shop at Aldi. Buy your undies at Kmart and save the expensive ones for Xmases and birthdays. The strategists have been aware of it for quite a while.
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Rufus
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Terry
10 Jan 2017, 09:30 AM
Served up on a plate. The more aspirational, the more tapped out. No wonder demand for cocaine is so hot.

--------------------------------------------

ustralia's wealthiest suburbs are among the most vulnerable postcodes in terms of mortgage stress.

Private data compiled by Digital Finance Analytics has captured 16,000 homes within 20 suburbs that are under significant financial strain.

For example, households in Melbourne's Toorak, where the median house price is $3.5 million, are five times more likely to default on mortgage payments than the national average.

Residents in the Sydney beachside suburb of Bondi are facing the same financial stress.

"Quite a few households are actually cash strapped, despite the fact that they're affluent ... and that's a really quite unusual phenomenon," said Martin North, founding principal of Digital Finance Analytics.


The analysis shows the extent to which wealthier households manage their finances over the next 12 months will be the acid test of whether Australia experiences a property crisis.

Mr North said these households - while currently enjoying the spoils of a once-in-a-generation house price boom - will be "disproportionately affected by even a small rate rise".

On Sydney's leafy north shore, in suburbs such as Hornsby and Gordon, home owners are already making late mortgage repayments.

"If you're a more affluent household, you'll tend to have higher costs," Mr North observed.

"You'll be going out and eating more, you've got bigger cash flow issues with regards to credit cards, say larger credit cards, and larger repayments on the credit cards, you have a more expensive car.
"So this is about lifestyle."

Next 18 months the 'acid test' for a 'property crisis'

The data also showed the probability of households in the riskiest 20 suburbs defaulting on mortgage repayments over the next 12 months ranged from about 3 to 5 per cent. A probability of more than 2 per cent is "significant", Mr North said.

Velocity Trade financial expert, Brett LeMesurier, said it is wealthier Australians with multiple properties that will be hit hardest by any interest rate rises, including independent moves beyond Reserve Bank decisions.

"Because that's where the banks have shown that they at the end of last year shown that they would target that's their preferred method of maintaining their margin, [targeting investor loans]," he told ABC news.

Mr North said if interest rates do rise, a growing proportion of households will be under pressure.

"These are the early warning signs of potential difficulties," he said.

"So how households will respond over the next 12 to 18 months, and how lenders respond and how regulators respond in a potentially rising market, is going to be the acid test of whether we end up with a property crisis, or whether we muddle our way through."


http://www.abc.net.au/news/2017-01-09/wealthiest-suburbs-among-most-vulnerable-postcodes-for-mortgage/8170338?section=business
These suburbs a quite different to the standard middle class suburbs full of accountants and public servants. They have a high % of self employed people, so inevitably some will struggle as some business models stop working when technology and shopping habits change.

Ordinary Australians are actually quite buoyant.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Khaderbhai
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Wealthy Suburbanite

Oh I see Roddy, suburbanites are tapped out because Martin North says so. :re:
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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Simon_S
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Rufus
10 Jan 2017, 09:56 AM
These suburbs a quite different to the standard middle class suburbs full of accountants and public servants.

Ordinary Australians are actually quite buoyant.
Wow full of accountants and Public servants......
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Rufus
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Simon_S
10 Jan 2017, 10:04 AM
Wow full of accountants and Public servants......
What I said was middle class suburbs are full of accountants and public service types - on that income strata.

Suburbs like Toorak may have some high echelon public servants, but they have a high % of self employed people who do struggle when their business isn't running well.
However those people don't get 95% loans, they have genuine equity in their homes and often other assets. They may get stressed from time to time but they can usually work their way through it.

Ordinary Australians in middle class and working class suburbs are a different category, and they are in a quite confident mood with employment picking up and house prices rising.

But don't take my word for it - read it here - http://www.businessinsider.com.au/australians-are-feeling-confident-in-early-2017-2017-1
Take risks - if you win you will become wealthy, if you lose you will become wise
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Foxy
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Zero is coming...

Terry
10 Jan 2017, 09:30 AM
Served up on a plate. The more aspirational, the more tapped out. No wonder demand for cocaine is so hot.

--------------------------------------------

ustralia's wealthiest suburbs are among the most vulnerable postcodes in terms of mortgage stress.

Private data compiled by Digital Finance Analytics has captured 16,000 homes within 20 suburbs that are under significant financial strain.

For example, households in Melbourne's Toorak, where the median house price is $3.5 million, are five times more likely to default on mortgage payments than the national average.

Residents in the Sydney beachside suburb of Bondi are facing the same financial stress.

"Quite a few households are actually cash strapped, despite the fact that they're affluent ... and that's a really quite unusual phenomenon," said Martin North, founding principal of Digital Finance Analytics.


The analysis shows the extent to which wealthier households manage their finances over the next 12 months will be the acid test of whether Australia experiences a property crisis.

Mr North said these households - while currently enjoying the spoils of a once-in-a-generation house price boom - will be "disproportionately affected by even a small rate rise".

On Sydney's leafy north shore, in suburbs such as Hornsby and Gordon, home owners are already making late mortgage repayments.

"If you're a more affluent household, you'll tend to have higher costs," Mr North observed.

"You'll be going out and eating more, you've got bigger cash flow issues with regards to credit cards, say larger credit cards, and larger repayments on the credit cards, you have a more expensive car.
"So this is about lifestyle."

Next 18 months the 'acid test' for a 'property crisis'

The data also showed the probability of households in the riskiest 20 suburbs defaulting on mortgage repayments over the next 12 months ranged from about 3 to 5 per cent. A probability of more than 2 per cent is "significant", Mr North said.

Velocity Trade financial expert, Brett LeMesurier, said it is wealthier Australians with multiple properties that will be hit hardest by any interest rate rises, including independent moves beyond Reserve Bank decisions.

"Because that's where the banks have shown that they at the end of last year shown that they would target that's their preferred method of maintaining their margin, [targeting investor loans]," he told ABC news.

Mr North said if interest rates do rise, a growing proportion of households will be under pressure.

"These are the early warning signs of potential difficulties," he said.

"So how households will respond over the next 12 to 18 months, and how lenders respond and how regulators respond in a potentially rising market, is going to be the acid test of whether we end up with a property crisis, or whether we muddle our way through."


http://www.abc.net.au/news/2017-01-09/wealthiest-suburbs-among-most-vulnerable-postcodes-for-mortgage/8170338?section=business
Hi Terry,

The donkeys flanks are foaming, got to get that carrot quick, before the other donkey gets it...

The I/Q/bell curve says it all.

What would an intelligent rational actor do??

Strap themselves up with mortgage debt??

Hmmmm.

Does it really matter what the dumb dumbs do?

And to be fair what else can they do??

http://www.zerohedge.com/news/2017-01-09/heres-unique-sign-inflation

The game is designed by very intelligent people, and played against the average Joe??

What do you think the outcome will be?

What it was always designed to be?

Terry you are frightening the children again :D :D :D
Terry
10 Jan 2017, 09:41 AM
Shop at Aldi. Buy your undies at Kmart and save the expensive ones for Xmases and birthdays. The strategists have been aware of it for quite a while.
Imagine the I.Q. of top strategists?
V's the dumb dumbs???
Edited by Foxy, 10 Jan 2017, 10:28 AM.
http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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Terry
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Simon_S
10 Jan 2017, 10:04 AM
Wow full of accountants and Public servants......
Nightmarish. The BBQ conversation would be less than riveting.
Khaderbhai
10 Jan 2017, 09:58 AM
Oh I see Roddy, suburbanites are tapped out because Martin North says so. :re:
He didn't say that MC. He said the following:

"Quite a few households are actually cash strapped, despite the fact that they're affluent ... and that's a really quite unusual phenomenon,"
Edited by Terry, 10 Jan 2017, 12:10 PM.
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Khaderbhai
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Wealthy Suburbanite

Terry
10 Jan 2017, 11:56 AM
Quite a few households are actually cash strapped, despite the fact that they're affluent ... and that's a really quite unusual phenomenon
Unusual for a few affluent households to be cash strapped? Roddy, you don't have a clue what proportion of affluent households are usually cash strapped. You call this analysis?
Edited by Khaderbhai, 10 Jan 2017, 12:42 PM.
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."
Profile "REPLY WITH QUOTE" Go to top
 
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