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Credit conditions easing? Bankwest introduce 97% home loan. Australian Subprime?; First-home borrowers still looking for no-deposit home loans
Topic Started: 16 Aug 2011, 02:17 PM (10,566 Views)
Shadow
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Evil Mouzealot Specufestor

With banks relaxing LVR requirements and cutting fixed rates, and the RBA set to slashing soon, do the bears still think the big crash is imminent?

Bankwest introduces 97% loans

Quote:
 
Bank offers home loans with 3pc deposit

KIM MCDONALD, The West Australian August 16, 2011, 8:39 am

First homebuyers will be able to borrow 97 per cent of a loan under a new Bankwest mortgage product.

Bankwest managing director Jon Sutton announced the $500m loan strategy this morning, which will be available to 1300-1500 WA borrowers.

The loan undercuts the traditional 20 per cent deposit rate normally required of first homebuyers.

The bank claimed it would cut the deposit saving time for first homebuyers from four years to six months.

Mr Sutton denied that it was irresponsible to lend first homebuyers such a large proportion of the value of a property, claiming the bank had put in place strict lending criteria that would ensure payments were sustainable.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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davel
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IMO, the only conditions in which the RBA will "slash" rates would be a major external event that has big impact here e.g. credit freeze.

As has been discussed before, credit is getting easier in some places because banks want to find customers for their loans. They aren't succeeding that much according to credit growth numbers. I'm sure there'll be an uptick becasue they're throwing the kitchen sink at it.

But in some places, there seems plenty of stories of credit getting tougher i.e. certain postcodes need much lower LVR.

Even if the RBA slash rates, I dont see a return to what we saw in 2008/9. The good ship "take on massive debt" has sailed. JMO.


So overall, I dont see any convincing scenario for much of an upturn. I dont see a crash either. Just a long, long flatness with occasional falls and even more occasional small bounces. That to me is the "new normal" replacing the "old normal" from late 80s to 2010 of pretty constant growth with regular large spikes, and the odd small correction.
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themoops
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Shadow
16 Aug 2011, 02:17 PM
With banks relaxing LVR requirements and cutting fixed rates, and the RBA set to slashing soon, do the bears still think the big crash is imminent?

Bankwest introduces 97% loans

Available to only 1300-1500 borrowers in WA.

Plus you can still get 5% lvr, or even less at the moment anyway.

Sounds like a last, pathetic and desperate attempt to stop house prices in WA falling any further.
stinkbug omosessuale


Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
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BarnDogg
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"with a five-metre frontage"

Would love to see the house built on that block!
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Yorke
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Shadow
16 Aug 2011, 02:17 PM
With banks relaxing LVR requirements and cutting fixed rates, and the RBA set to slashing soon, do the bears still think the big crash is imminent?

Bankwest introduces 97% loans

So does Rams,

http://www.rams.com.au

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Trojan
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BarnDogg
16 Aug 2011, 06:16 PM
"with a five-metre frontage"

Would love to see the house built on that block!
Don't think you can do anything other than a terrace house with 5m frontage and 150sqm block.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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BubbleBoy
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davel
16 Aug 2011, 02:46 PM
IMO, the only conditions in which the RBA will "slash" rates would be a major external event that has big impact here e.g. credit freeze.

Agreed. Inflation is higher then it should be, and then there's the huge expansion in resource capital expenditure coming our way. So if "steady as she goes" continues I think it is unlikely to see variable interest rates fall.

Also agree with your other comments - bottom line is the credit growth statistics. Which show positive, but weak credit growth.



Edited by BubbleBoy, 16 Aug 2011, 06:54 PM.
My name is based on a Seinfeld character, not on a belief of a housing bubble.
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BubbleBoy
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Edit: Double post

Edited by BubbleBoy, 16 Aug 2011, 06:49 PM.
My name is based on a Seinfeld character, not on a belief of a housing bubble.
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Yorke
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Trojan
16 Aug 2011, 06:32 PM
Don't think you can do anything other than a terrace house with 5m frontage and 150sqm block.
A terrace house beats a studio apartment and for most FHBs its all they need. Too many of them have been aiming for a McMansion only to find they have bitten more then they could chew when the rates when up 1-2%.
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dgarbutt
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http://www.perthnow.com.au/business/low-deposit-loans-deals-to-boost-perth-property/comments-e6frg2ru-1226116007112

Same story, but the comments are almost all bearish. And I agree with them too. 2 years interest only with incentives as in rate reduction on the interest if you lock in for longer at interest only payments, and the fact they've teamed up with Satterly and the like as well. This smells so much of subprime/alt-a or whatever the term is for it.
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