/biz/ - Business & Finance

US Fed is raising rates and the BBSW increases for Australian banks who pass on the interest rate rise to Australian mortgages: https://d3fy651gv2fhd3.cloudfront.net/charts/united-states-interest-rate.png?s=fdtr&v=201809261820x

The Fed is expected to raise rates in December, three more next year, and one increase in 2020. https://www.reuters.com/article/us-usa-fed/fed-raises-u-s-interest-rates-sees-at-least-three-more-years-of-growth-idUSKCN1M60EE

So when do I buy cheap Aussie flats?

>>11465277
Real estate will only have brief flash crashes, when they quickly buy the dip.
It is easier to print 500k paper dollaroos than building a house is.

>>11465394
Start looking in 2020 before us fed reduces rates

Political instability at the federal level orrleates with decreasing consumer sentiment

you've clearly put a lot of work into this post ok, but I'm too stupid to understand what any of this means as a bogan Australian.

*hits bong*
*eats mcmuffins*

>>11466391
>the political world in 2019
I wonder if we will get to see another GFC anytime soon?

>>11466413

Yes we will

>>11466405
>*hits bong*
>*eats mcmuffins*

god i wish that were me

>>11466570
who knows how long it'll stay in the warning zone though, could be 2 years or 10 years

>>11466605
No itll be a short fall. US feds rates increases guarantee that.

>>11466575
It's bliss, Start on the bongs (preferably bucket) 24x7 and you will be there to!

>The number of Australian homeowners over the age of 65 still carrying mortgage debt has trebled since 2002, raising concerns the nation's retirement savings could be absorbed into the housing boom.

>In 2002 only 4 per cent of homeowners aged over 65 carried mortgage debt, figures from the Australian Bureau of Statistics show. By 2015, the latest figure available, that had grown to 12 per cent.

lol

https://www.sMh.com.au/money/borrowing/rapid-rise-in-retirees-with-mortgage-debt-20181018-p50aea.html

>>11466685
>The number of 55-64 year-old homeowners with mortgage debt had more than doubled, from 23 per cent in 2002 to 47 per cent in 2015. The percentage of homeowners aged 45-54 with mortgage debt climbed from 55 per cent to 77 per cent over the same time frame.

what a shambles

>>11466685
12% - thats fluff my man, those people should never have bought to begin with. This is the sort of thing that brings the market back to sanity.

>>11466702
It is just another great legal Ponzi scheme. The only losers are those who had no idea of the risks or take them at the extremely vulnerable point. Some came out with a motza and most everyone got a little something. It is pretty much life really.

>>11466710
The trend is worse than the static number. 12% today is 40% in a few years.

Look at 47% of 55-64 yos having mortgages, up from 23 in 2002. It'll be over 50% by now. These people have no wage growth and will retire with mortgages. They will be forced to sell. More stock on the market for a seller who has no choice but to sell, so theyll bring prices down while bringing property choices up.

>>11466710
>>11466730
>tfw ywn be this short-sighted

>>11466747
Those numbers are pretty alarming..
I wonder what the mortgage rates are like?
What percentage (with age breakdown) of people have mortgages now compared to 2002? Mortgage completion stats would be nice to see too.

>>11466757
Sadly I'd wager that these near sighted bastards are in charge of a property fund or high flying exec. Australia is rife with the biggest grabbastic boys club who slap each others backs and bray like donkeys meanwhile everything is in shambles

>>11466730
It really is just a classic ponzi, built on credit lending to retards who never could pay it back. Once the credit dried up it was like the ponzi collapsed because nobody could repay the newest buyers. Unlike stocks prices cant change so dramatically within a week, but the rate of change seen in Sydney and Melbourne is staggering as far as illiquid real estate prices go. It should be falling much slower, its fallen 7% year on year in the first year, so 10%+ falls by this day next year are highly likely as falls accelerate. 20% in 2 years, that's the median $1m home down to $800,000 - that's $200k saved on the principle plus the 5% interest p.a., you're talking about buyers saving half a million dollars over their lifetime. The opportunity cost of this event is going to be the biggest in a persons lifetime in most cases.

Imagine beeing such a zoomer that you think a 'housing market crash' means you would able to afford a home

Would you have been able to afford a 'crashed' home in 2009? Probably not

>>11466802
Do metro and regional areas respond differently in these kinds of situations? Will country towns remain unaffected while city properties tank?

>>11466907
The MSM has swung from 'its just a dip' to 'its only going to effect syd and mel'. Anyone who's studies this knows how interconnected our property market and banks are - multiple property owners have investments outside the hubs and the same banks lend for both. It takes a cursory glance to understand how much our economy is driven by construction and a crash will have widespread effects as tradies stop spending try to move where the work is flooding that employment market. They know that bubble crashes are not fully rationale and even some places with health will fall for the same FUD.

This is going to be a lot worse than most people expect.

>>11466907
Because of the property ripple effect smaller areas follow the same trajectory but they have lower falls/rises because theirs just not as much investment/competition there.

Country towns will essentially just lose tourism dollars, less purchases for their goods they export because city people have to cut back on spending, and their home prices will fall a little bit but nothing insane. If you invested regionally since 2015 itd be annoying because youd be taking an L

How bad will it be? Minor correction(10-15% fall) predicted by most mainstream economists? Or are we going to see Ireland 2007, or even worse Iceland 2007

>>11467014
My guess is ireland but I'm prepared for iceland.

>>11467001
>This is going to be a lot worse than most people expect.

Yep

>The normalcy bias, or normality bias, is a belief people hold when facing a disaster. It causes people to underestimate both the likelihood of a disaster and its possible effects, because people believe that things will always function the way things normally have functioned. This may result in situations where people fail to adequately prepare themselves for disasters, and on a larger scale, the failure of governments to include the populace in its disaster preparations. About 70% of people reportedly display normalcy bias in disasters.[1]

>Cause: The normalcy bias may be caused in part by the way the brain processes new data. Research suggests that even when the brain is calm, it takes 8–10 seconds to process new information. Stress slows the process, and when the brain cannot find an acceptable response to a situation, it fixates on a single and sometimes default solution that may or may not be correct. An evolutionary reason for this response could be that paralysis gives an animal a better chance of surviving an attack and predators are less likely to see prey that is not moving.[8]

https://en.wikipedia.org/wiki/Normalcy_bias

You can tell them whats going to happen and why its going to happen but the biological wiring in their brain wont let them see it, understand it, or believe it.

You really need to be kind of autistic and be unemotional to override the bias. Which is why you find lots of autists in trading and investing rather than emotional extroverted optimistic people.

>>11467027
Iceland is actually the better scenario, Iceland today is better off having let everything crash and taking the fresh start, Ireland re-inflated the bubble now they are back to square one

>>11467014
It can't just stop at 10-15% because buyers literally do not have the amount of money necessary to buy for 10-15% less than the peak.

They havnt got $1m in savings
The bank wont lend them $1m

They can only pay what they can afford, which is now 40% less than at the peak. So at an average you're looking at 40% losses until the median buyer can buy the median house again.

But because of the trajectory of falls it'll exceed 40% as the public shit themselves once they see -7% become -10% become -15% become -20% become -25% become -30% become -35% become -40%.

That's all before the economy grinds to a halt as the negative wealth effect kicks in and unemployment increases and absolutely nobody is buying anymore. The people who used to be able to get a mortgage, who now can only get 60%, now cant get 0% because theyre unemployed.

>>11467079
Agree, i would prefer a complete crash with nationalisation of banks and glass steagall legislation. I think they will try reinflating the bubble, tanking the AUD in the process. Given current world economics (china trade war, US fed hikes) I don't believe it will be successful.

>>11467079
Actually Ireland is doing ok. We tried our best to reinflate the housing bubble but the banks being total cunts abiut mortgages now managed to stave that off (probabky by accident) at the expense of a weird rent bubble

>>11467001
Very interesting take, anon. I wonder which places (rare nuggets) are going to BOOM or remain stable during the recessive phase where everything else crumbles to base demand/value. Your posts are a fucking good read, dude.

Best thread on fourchan right now.
Have you considered copy/pasting to /POL/ for further discussion?

>>11467135
Thanks anon. I don't think i have many original thoughts, all this shit is out in the open and people are starting to connect the dots.

Get whatever money you can out of Australia imo. Only industry i can see doing better from this is domestic tourism and cheap camping stores when people can't afford 2k AUD to fly to Thailand.

>>11466570
Fantastic. Enough time for one more retarded crypto bubble

>>11467006
>if you invested regionally since 2015 you'd be taking an L
Forward-thinking millenlials and late gen X on suicide watch.

When I replied to this guy >>11467001 I thought it was you for some reason, this post is mostly intended for you >>11467135 (no disrespect to the other guy who's posts are of equally high quality).

hopefully the same happens to Canada's housing market

>>11466773
This is up till 2013 so its much worse now because prices roughly doubled in Sydney from 2012 to 2016

>>11467194
https://www.youtube.com/watch?v=XiUONOfs0hI

yes brother. we are not bulls or bears but realists. ride the waves as they come. triumph and victory

>>11465277
Using some simple sentiment analysis would show Australia is not in a housing bubble. Since everyone has believed we are for a long time, it was already a good time to sell years ago. If you sell now you're selling the dip

>>11467229
For most of the past 5 years sentiment has been above average

>>11467229
Its only just turning and a we've had a year of decline. Its a classic bubble.

>>11467251

Daily reminder

The Australian government will confiscate your savings to bail out failing banks
http://cecaust.com.au/releases/2018_02_16_Govt_APRA.html
https://www.ainsliebullion.com.au/gold-silver-bullion-news/senate-passes-e2-80-98bail-in-e2-80-99-law-e2-80-93-how-safe-is-your-cash-now-/tabid/88/a/1722/default.aspx

Is it just me or did anyone else link a surge in cheaper properties being bought up, barely renovated then relisted on the market within 6 months at a 20%+ markup with the increased popularity of home reno shows like the block or whatever. More noticeable in rural cities and towns.

>tfw unlike my millenial friends I don't trust the media so I create a document that contains every piece of information I find to piece together a broad analysis of the market that aims to be as objective as possible because I don't feel like fucking spending a million fucking dollars on an investment that'll could turn sour and shackle me for decades or my entire life all because I trusted everything I heard from people who had a vested interest in telling me things were going to always go up and that $1m house would be worth $2m in 7 years and $4m in 14 and $8m in 21 years despite nobody in the world having enough money to create $8m median middle class homes

>>11467132
Nonsense, the rent bubble is only distracting from the fact that house prices are as high and higher in Dublin specifically than before 2008. The Irish bubble is certainly reinflated. Banks still having to pay for non-performing mortgages they should've never given out 10 years ago has raised our interest rates far above EU levels, which is inevitably going to bite current mortgage holders when the precariously positive situation we are currently in goes tits up, and they end up in arrears and eventually default, continuing the cycle. But sur' lookit, we're not used to the money, sur' we've been poor for all of history, sur' we may as well enjoy it now

>>11466824
Bought in 2010, got a great deal

So where should i store my money, another countries currency? bonds?
Or just keep funneling cash into crypto?

>>11467280
I don't watch TV but I noticed a few years back that Domain had partnered with a lot of media outlets, and like 90% of their articles were promoting the idea of flipping homes for free money. Many of these articles were formatted as news pieces to the point that I didn't know I was just reading blatant advertising. Not sure how the hell it was even legal.

>>11467340
Just put your savings into crypto. Livingroomofsatoshi lets us use crypto to pay bpay, credit card bills, direct bank transfers. Only reason I have cash anymore is to use it as cash.

>>11467269
From my understanding account holders are covered for 250k by the financial claims scheme or whatever. So if banks raid your account, government is just going to pay you back anyway. This creates even bigger problems...

Wonder if this will effect NYC property. Prices already slightly dipping if some recent news feed articles I've seen are to be believed.

I imagine foreign money trying to stash cash in NYC property may prefer to buy the dip in Australia, leading to falling demand in NYC.

>>11467229
Quite a (relatively) controversial view you have there. If the Australian housing market isn't a bubble and this is a dip, what happens in the future? Similar growth and blow-off like we've seen?

I wish I understood how equity, mortgage and interest worked, it seems like everyone is on a different "contract" with their respective banks.

>>11467396
>banks dont have enough and take your savings
>dont worry goy its all guaranteed up to 250k
>money is "frozen" while everything is sorted out
>miss all the prime buying opportunities because of "frozen" money
>Government: "Shit now we need more money to give back to the people"
>Print more money
>Your money is unfrozen, along with massive inflation, having missed all good buying opportunities

Sounds like fucking bitconnect to me

>>11467396
And it looks like the government has to 'activate' that scheme. So in the case banks start to kick it and government hasnt hit the switch, depositors will be left out of pocket entirely.
Holy fuck.

>>11467340
>funneling cash into crypto
I'm going to start/continue to do this.

>>11467294
Based autisic information gatherer

keep the thread alive lads

also >>11457787 (yesterdays thread)

>NAB has slashed the number of home loan referrers from 8000 to 1000, and revealed 300 staff were sacked last year for breaching its code of conduct.

lian loans

https://www.afr.com/business/banking-and-finance/financial-services/nab-overhauls-controversial-introducer-program-20181019-h16us7

Fixed rate, variable rate, equity, interest, principal, repayments, ownership.

It's all so complicated.

>>11468142
alright, what do you want to know? i'm fairly experience in mortgages as i've had a fair share of them.

Wish I could invest in Aussie property, but as a Yank I doubt I'd be able to without a shell company/owner.

>>11467229
30% of mortgages over the last five years have been interest only. They are just starting to mature now which means a massive increase in payments for 10's of thousands. Over the next 5 years watch as these speculators or over capitalised try to sell before they are in negative equity territory. The RBA can't drop rates because the money the banks borrow from offshore is already subject to higher interest.

>>11468157
>Note: I am not an expert

I think you can. How come those rich chinese can buy properties in Aus and you can't?

>>11467316
Why is rent so fucked up?

>>11468157
You can

lol @ new loan approval drop

>>11468151
I'd like to know, generally, what will happen to people who are about halfway through paying off a mortgage in regional Australia, if/when we're finding the bottom of the market?

As a side query, what if someone has been paying the mortgage off faster than required with extra cash? Is this a good thing to do? Does it depend on the market?

>>11468157
Mate, I'll buy houses/property for you, wherever you like, just give me a small cut and I will hunt down anything you want!

>>11468284
The faster the debt is paid the sooner you stop losing money on the interest of the principle. Then you can get working to investing that money saved thats no longer going into interest.

>>11468284
>>I'd like to know, generally, what will happen to people who are about halfway through paying off a mortgage in regional Australia, if/when we're finding the bottom of the market?

don't understand the question really. if you are half way through you mortgage and the market bottoms, it will eat into their equity value. i don't see it causing people to default though.

>>what if someone has been paying the mortgage off faster than required with extra cash? Is this a good thing to do? Does it depend on the market?

it means you will save money on the total interest paid on the loan. paying off the mortgage sooner then later is generally a good idea if the interest on the mortgage is greater than the rate of return on an investment. example a index fund returns 8% a year while your mortgage payments are 4%. you are better off investing any extra money than paying off the mortgage. but if the returns on the market are 2% and your mortgage rate is 4% it's better to pay down you mortgage than investing it.

>>11468229
>mortgage is interest only
>higher payments on mature loans
>negative equity
>over capitalised
Please explain these, I'm a brainlet.

>>11467099
Hey Dick nose, people live in these houses. They won't sell just because the market plummets.

The worst it will get is that there will be more foreclosures and these will make up the stock being traded.

No one else will sell unless forced.

Hey dooms dayer, last time I looked the people if Ireland and Iceland still live in houses and eat food and drink.

Don't push your apocalypse bullshit. Not many will fall for it.

>>11468319
>example a index fund returns 8% a year while your mortgage payments are 4%. you are better off investing any extra money than paying off the mortgage.
Not necessarily true after you account for the fact that you get taxed on your 8% return and then adjust it for inflation too

>>11465277
New laws came out in China earlier this year.
Basically mainlanders are no longer allowed to own
more than 2 properties (In China and Overseas).

The Mainland Authorities are also cracking very heavily, which is why a fuckton of Chink overseas real estate corporations bailed early.
This coupled with new Overseas restrictions on real estate purchase in Australia/NZ/USA/EU would ensure that there will be no one propping up this market when crisis hits

>>11468359
depending on you jurisdiction canada and the USA have favourable taxation rates on capital gains. 8% return + dividends are more then enough to counter the rate of inflation. and given the interest rates of the last 10 years, it is very favourable to leverage your mortgage into the stock market.

>>11468306
I understand this better now, thanks.

>>11468319
It was just meant to be a general question, think you answered it quite well as I feel I understand it better now, thanks. The second part of your post makes sense to me also, thanks.

One more question:
>eat into equity
What does this mean? Does it have any effect if the person has low/negative equity?

>>11468319
>>11468359
Even if we assume you're only paying 30% tax overall, that brings your net return from 8% down to 5.6%
Even if inflation is only at 2% (its between 2 and 3) this means that your net inflation adjusted return is only 3.6% i.e. you would have been better off paying down your mortgage.
This of course assumes no CGT discount on the investment, but even then with a more accurate rate of inflation it probably still holds true

>>11467359
So you can't live without cash. Interesting how far crypto has come.

>>11468330
>doomsday/apocalypse scenario
Yeah, it seems like this pretty much never happens.

>>11468382
>leverage your mortgage into the stock market.
Agreed. But direct execss cash flow to investments instead of paying down the mortgage? Probably not a good idea

>>11468381
https://www.bloomberg.com/news/articles/2018-03-27/chinese-real-estate-deals-drop-in-u-s-as-regulators-clamp-down

Yeah the Chinese got banned from capital flight.

Ironically they were the only reason prices were rising so now they've taken their money out the prices are falling and they won't want to buy into a falling asset. Look for them to invest in other anglospheres.

>>11468330
They are forced to sell for

Deceased estate
Divorce
Moving
Default on mortgage

Its not some calculated option people make optionally, lol. the fuck is this post.

>>11468387
>>What does this mean? Does it have any effect if the person has low/negative equity?

example. your property is 1m in assessed value. you have 200k in a mortgage(debt) and 800k in equity. if the property value drops to 500k you will still have 200k in debt but your equity gets reduced to 300k from the 800k.

>>Even if we assume you're only paying 30% tax overall, that brings your net return from 8% down to 5.6%

5.6% not including dividend gains or any tax shelter schemes available to you. 5.6% still being less than the current interest rates. inflation also affects the mortgage interest rates as well. it erodes the amount you owe.

>>11468416
With the advent of washable money and crypto, will these restrictions have any effect? Maybe if the Chinese Government brutally punished offenders to make an example, but even then..

>>11468416
china is a very small player in the NYC market. they are far more prevalent in California. China represents about 17% of the Californian market and less then 5% of the national market. the real reason why there has been a run up of the market is because the vast majority of purchases are american.

>>11468427
and exactly what percentage of the market do these circumstances cover?

>>11468408
LOL, There is not one documented case of it happening.

>>11468448
>inflation also affects the mortgage interest rates as well. it erodes the amount you owe.
Effect of inflation in this situation is not as pronounced as interest on mortgages is front loaded. On a 30 yr mortgage making minimum repayment it generally takes about 15 years for principal repayments to even equal interest repayments.

>>11468448
Ahh I see, and I hate ask such a beginner question, but is equity what people use as a kind of proof-of-payment to take out further loans up to (or around) their equity value? Does equity have any other value? Can you "withdraw" from your equity?

>>11468411
is generally a good idea for people who do not have access to large loans. mortgages are some of the cheapest loans available to the typical person.

so i just bought a house for 600k in clayton, victoria. 4BR, double car garage, brand new build nbn etc. real nice place

feels like i bought the top. how fucked am i? i used a 200k deposit. minimum repayments with principle are around $450 pw, with a combined income of $3k a week

how much value is property set to lose? hopefully ive got enough capital by then to buy up

>>11468416
According JL Warren & the other Chinese overseas investment sites, they are hoardin' gold until the whole thing (GFC) blows over.
They are timin' the bottom so to speak

>>11468505
you can withdraw from your equity as long as you are within the banks guidelines. these are typically called HELOCS. you can leverage your equity into other things provided the bank allows it.

>>11468500
the effect of inflation is consistent regardless of the term of the loan. 2% inflation per year effects you the same regardless if it's is 2 year loan or a 30 year loan.

>>11468465
Crypto already got banned last year.
The traceable 'washable' have been made to pay a 'fee' or sorts to ensure compliance.
And the 'untraceable' Black Washables are being hunted & used to pay off the Shadow loans

>>11468465
Its already worked, lets look at some Chinese popular suburbs in Sydney: Chinatown (Haymarket), Ashfield, Campsie, Chatswood, North Ryde, Hurstville.

Source: https://www.realestate.com.au/invest/unit-in-campsie,+nsw+2194 just change the suburb.

>>11468492

except all the recorded instances here >>11467099
then Ireland and Spain and Iceland

>>11468517
>how fucked am I?
5/10, average joe, as a worthless guess.

>>11468517
anyone?

>>11468517
if you plan to live in it for long term, you're fine. if you are comfortable in your place. it's okay. if the market tanks, it isn't optimal, but you'll still have your place to live in.

>>11468605
ya i needed a place to live and im comfortable. im not buying it for an investment, its just buying was the same price as rent repayments pretty much. everyone saying the market is gonna crash is scary because everyone will lose their jobs too probably

>>11468536
Thanks again mate, top-shelf answers.

>>11468547
>pay a fee to be "compliant"
This sounds fine.
>untraceable black washables being hunted
Fair enough.

>>11468548
Yeah, it does seem like the ban is working to deter capital flight. Can we find out how much the Chinese cashflow was responsible for market movement over time?

>>11468553
Apparently is you search Google all these places still exist. Inhabited by people living in houses.

Exactly what is it you believe happened to the people who live in these countries?

>>11468663
nah almost noone loses their jobs, thats a myth. almost everyone stays employed, they just earn less money. unemployment does go up but it'll hit 10% maximum.

>>11468663
>market crashes
>1/3 of jobs disappear
This sounds like a doomsday scenario that probably won't happen, in my humble opinion.

>>11468677
They got #DOOMSDAY'D, duh.
GOTTEEEEEEEEEM.

>>11468663
look, people will rarely every sell at the top and buy at the bottom. that's the risk we all take. but if you are comfortable living where you are and can make the payments, you can ride out the bumps. it may not be optimal but most people aren't lucky enough to time the market.

>>11468536
>the effect of inflation is consistent regardless of the term of the loan. 2% inflation per year effects you the same regardless if it's is 2 year loan or a 30 year loan.
Im not talking about the term of the loan I'm talking about the fact that interest repayments are front loaded and the for the majority of most mortgages people are just paying interest and not principal for the first 10-15 years.

>>11467294
based anon.

>>11468735
How is it not universally better to just "choose" (if possible) to pay off the principle first?

>>11468766
It is. That's why I'm suggesting that people should rather direct any excess cash to their mortgage rather than invest it. Because at the end of the day even if your investment is returning 8% but your mortgage is 4% you are better off getting it paid down after you account for tax, inflation, and the fact that your mortgage interest is front loaded. Any extra repayments on a mortgage directly reduce the principal thus reducing your interest immensely since it is front loaded. If you want to invest focus on paying down your mortgage first and then taking out an equity loan in your property. That's my advice.

>>11468766
>>11468766
And to further answer your question you can't really choose to do that. The bank withdraws their minimum monthly payment no matter what you do and since interest is front loaded the vast majority of that minimum repayment will purely be interest usually for at least 10-15 years. But any extra repayments you make go straight off the principal.

>>11468735
that is absolutely untrue. a mortgage makes the interest payments greater in the starting years but you still pay towards the principal. upwards of 40% of your payments int the beginning years of a mortgage go towards your principal.

>>11468735
>>11468766
Kek!

>>11468802
Thanks for these replies mate, very easy to understand. It's a complicated system though isn't it? Hundreds of millions of people worldwide, hundreds of millions of houses, thousands of banks, trillions in the stock market - I'm surprised it moves along so smoothly, just a few dirty resource wars in shithole countries and the whole thing keeps running!

>>11468766
>>11468794
>>11468802
Pic related.
The banks are jewing you in more ways than you know.
The worst part about this is that on average Australians move every 3-4 years and refinance every 7 years. Which means most people with a mortgage are actually just paying the bank interest most of their lives, since as soon as they refinance they're back to square one with front loaded interest

>>11468837
>upwards of 40% of your payments int the beginning years of a mortgage go towards your principal.
See >>11468854
And go to any online mortgage calculator and see that you are wrong

>>11467269

Based, listen to this Anon unironically

>>11468854
it is dependent on the rate and the borrowing amount. it is untrue that it takes 10-15 years to pay more into you principal than your interest rate.

the last 10 years have seen sub 3% interest rates.

>>11468880
Isn't it (reserve interest rate?) like 2.5% or something? I heard that it hasn't changed for a while now and they can't (?) lower it further..

>>11468880
>it is untrue that it takes 10-15 years to pay more into you principal than your interest rate.
For a 30 year loan it is true
>the last 10 years have seen sub 3% interest rates.
You're not getting the concept of front loaded interest

>>11468908
i understand the concept, but you can carry over your mortgage amortization period to render it pointless as long as you carry a mortgage.

>>11468906
rates are rising due to the better economy,

>>11468923
And for all others wondering about front loaded interest
https://www.mtgprofessor.com/A%20-%20Amortization/Is%20the%20Mortgage%20Front%20End%20Loaded.html

>>11468923
>hey buddy, if you wanna reduce the fees you pay towards this scheme over time, just make sure to always stay inside the scheme!
This sounds like a Jewish trick.

>>11468945
the loan is designed to make you maintain it. the same way producing 10 of a product is cheap. but producing 1000 of them is cheaper per product. while the difference is that the 1000 is more cost to produce, per product it is cheaper.

>>11468923
>understand the concept, but you can carry over your mortgage amortization period to render it pointless as long as you carry a mortgage.
The majority of Australians don't do this when they refinance.
They automatically think lower interest rates or lower monthly repayments save them money but they fuck themselves long term

>>11468941
This a really interesting read - halfway through.

>>11465277
Feels good having all my savings in crypto

But I'm student so i don't have much anyway

>>11468984
>the majority of Australians don't do this
How do we know this is true?

>>11468984
refinancing while withdrawing equity is a personal choice. while i don't agree with it. it's really up to them. the point is though, given that interest rates are low, it is better to leverage your mortgage into equities. when interest rates go up, it is better to pay down you mortgage.when mortgage rates hit 4%, it is in my opinion time to withdraw from equities and to pay down your mortgage with those gains.

heh so that 4 mil shit box will be 3 mill and still normies cant afford

>>11469012
I work with a mortgage broker who has been doing this for almost 30 years, he's given me statistics before but don't recall where he got them from. Can always ask him tomorrow.

>>11468906
RBA are unlikely to raise interest rates due to the extra mortage stress it would cause when banks pass on the cost. Unfortunately the banks also loan money from US banks, and their rates are going up.

RBA have actually said a weaker dollar would be better and are likely to lower their interest rates and print money when this recession really kicks off.

Unfortunately it will result in household stress since lower rate mean all the goods we import (everything), fuel (a big portion of the cost of food and personal transport) go up proportionately.

RBA is in a position where they can't raise or lower rates without fucking everything. Too little too late. If they do absolutely nothing we're at the whims of the international market - slowdown in china, increase in fuel prices due to Saudi, higher interest on US rates.

Its interesting seeing them try to uplift sentiment with the latest employment figures as though that's going to help. They know what's coming.

>>11469194
What will be done to soften the blow to the masses, legal weed?

>>11469243
legalize weed, remove taxes on alcohol, rum and bud becomes new default currency of australia

>>11465277
Bro, I'm in Melbourne and wouldn't mind seeing a "crash" or more like a correction but desu even if the market fell 40% it would be still unrealistic. In fact prices were insane over 10 years ago.

If shit goes down 10%, people will call it a crash but it'll still be over priced.

This place is fucked.

>>11469256
>rum and bud as the default currency
This would be fucking awesome.

>>11469295
I've been follow auctions of various suburbs around melbourne, i work in realestate. I dont even think we dipped 3% yet. I can show you 20 suburbs and they all have a profile like pic related.

>>11468854
Hey mate could you explain front loaded interest to me? Hope your still around. I've never heard that term before but interested to hear what it means. Cheers!

>>11469353
Read the link in this post >>11468941

>>11469353
he's referring to the nature of mortgages that make you pay majority of the installments in interest payments first. meaning, as an example, the first 10 years of any mortgage the majority of your payments will go towards interest over equity. so imagine a 25 year mortgage where you maintain the same interest and payment schedule. for the first 10 years 60% will go towards interest and 40% towards you equity. the latter half of the terms will see you paying more into equity than interest.

this is penrith, apparently one of the worst performing suburbs for NSW

>>11469372
>>11469374
Ahh shit sorry fellas didnt make it that far down the thread to see that post. Appreciate the replies :)

>>11469256
rum corps days are back. also full recourse loans unlike us and uk. so you still owe the residual mortgage debt if house sale could not cover it all. in the 80s in 0z when interest rates went to 16% the govt told banks to not call in loans and give repayment free years...or lose thier banking licence. it does not help gov to have millions suddenly on the street.

>>11468664
you wont be able to find outflow of chinese money since its laundered in a 100 different ways, same with inflows

Dislike how realestate.com.au updated to become almost exactly the same as domain

>>11469542
Are domain and realestate.com.au super similar? To me they seem to have the same properties. Can you explain it to a pleb?

>>11469542
Did you know that your average run-of-the-mill real estate agent has something like an access login to a system where they can see market data of all sales in their respective state? They can see historical data for every recorded sale and they have a huge toolbox at their disposal (contracts with advertiser's like domain and real-estate.com); this came as a surprise to me.

>>11469583
Theyre the most popular and agents generally put up advertisements on both sites

>>11469601
you can buy that kinda data from corelogic for personal use im pretty sure

>>11469609
https://www.corelogic.com.au/

>>11469609
I was just above the to post the link anyway haha; from what I've seen of the different portals they have some really (seemingly) complex tools at their disposal. They get some kind of licence with tiered access levels to different tools and data.

It will not burst because mass immigration will continue unabated.

The Coalition, Labor, the RBA, the Business Council, the ABC, and the mass media, 100% support continuing (even increasing) mass immigration, and the ever growing demand for housing our open borders bring will now always be enough to cushion any downfall and/or increase boomer's home values.

https://www.youtube.com/watch?v=cO_Qmpi9uo0

In addition, there is virtually no support for stopping Chinese laundering money via Australian property, which will also continue indefinitely raising Australian property prices.

thinking about dropping 50k into cba?
too close to a crash? thoughts?

>>11468468
What percentage do you think would be low enought to have zero negative effect?

>>11469703
they set up a task force to prevent untaxed money leaving the country, but definitely not the inflow, especially through the NZ corridor.

One of Australia's biggest weaknesses is how fucking laid back everyone is. The "nah she'll be right cunt" mentality is fucking the country over so badly because we never give a fuck anything. The pollies know it and take advantage of how complacent we are. I say this as someone who is just as guilty as everyone else is. I love Australia's easy going people but the reality is there are some complete scumbags who know this and take advantage of it to fuck us over. I don't know how you begin to 'fix' this.

>>11465277
Ausfag here, hoping to see increase in Baby Boomer suicides

>it's always gonna go up!

I feel a bit of pity for the boomers who thought housing was infallible.

The real vindication will be seeing the trustfund yuppy renovators get rekt. The type of craft beer swilling fags who want to go on the Block.

>>11470191
Australia is practically an American colony at this point.
I know it, you know it, your military knows it and your government admits it.

That aside, Agriculture & Big Pharma in Australia will remain strong, I reckon due to strong demand in Asia.
The cities will pretty much experience what Perth is experiencing- the post-boom hangover.
Finance already took a big hit and so will the Real estate market in the coming months.

>>11468517
As long as you keep some form of income you'll be fine.

If you can increase your home loan repayments/add to an offset account, you can build up a buffer against uncertainty, and in the case of the offset account, reduce the interest payable on the outstanding amount of the loan.

God Speed Anon.

>>11469583

Domain is owned by Fairfax.

Realestate.com is part of REA group and has links to News Corp.

Take from that what you will.

Dumb cunt here. I have 80k in savings. What should I do if anything? Any chance of snapping up a decent buy in like 2 years? Will small town prices be affected at all or just Melbourne and Sydney really?

Should we expect something similar in London? Looks like they have been going down for a year now.

>>11470367
in places where theres little demand the home prices will not drop by much if there is ever a "crash". suburbs of perth are a good example, 300k-400k for a home is reasonable

>>11470360
Any chance you could spoonfeed me a bit more anon

>>11469785
I bought 1k worth 6mo ago. It's now worth 950 lmao. Imo even though the dividend is great the bank stocks will not do well if there is a mortgage crisis/recession which is looking more and more likely so I would avoid.

Tbh if you want bluechip stocks go into BHP or Rio Tinto

>>11470490
keep in mind companies can issue stock, diluting your shares, everything is a risk and needs to be treated as such, diversification is key.

i dont want to shill motley fool, but i was subscribed to them for 2 years, not anymore, and helped me learn alot about the market.

>>11470454

Sorry, it wasn't a commentary on how the properties are listed on either, just that both are owned by large, arguably dominant media companies.

The majority of the listings on either website are done by real estate agents. Generally, if an agent wants to reach the most potential buyers, they will use those two sites as they are the most popular

Don't let this great thread die, make the Australian economy great again!

>>11470295

>Surry Hills absolutely BTFO

>>11470554
lol this country doesn't make anything. Just crops, wine and rocks out of the ground.

>>11469785
>>11470490
I sold all my australian shares 1 month ago. This next recession will hit Australia very hard

>>11470594
Are you still exposed to the AUD?
I'm unironically hedging with crypto.

>>11470594
I need to get my money out of the bank. Thinking about investing atleast half in US company, like Kimberly Clark, and some gold and silver.

>>11470605
I have <10% in AUD now. I'm hedging with some crypto as well because of this US-China trade war. Also got some gold and silver as well as US consumer staples. Its a comfy strategy

>>11470617
Youre thinking just like me, US consumer staples are a safe bet right now

>>11470594
>>11470605
>>11470630
I'm all-in on US stocks at the moment. Too much downside risk in Australia, even compared to the US.

>>11470645
the vts chad?

>>11470645
definately looks safer than Australia right now, maybe not so much for US tech stocks, but even they are probably safer than holding AUD or certain australian shares