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/biz/ - Business & Finance


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8021106 No.8021106 [Reply] [Original]

Anyone else in Australia really worried about the rise in mortgages recently and how the banks are ignoring the 2007 crises and giving risky loans?

Apparently a parent of mine was paying ridiculous amounts of interest (basically more than the loan over a decade just in interest) on their most recent mortgage (to buy out sister from her share of an inherited property), suggesting that the mortgage was considered very risky.
I've also heard that many people are beginning to sell properties to pay off similar mortgages. (see http://www.abc.net.au/news/2018-02-20/rba-warns-on-interest-only-loans-and-financial-stability/9464536))

Is this another financial crises now emerging?

>> No.8021117

>>8021106
https://www.yourmortgage.com.au/mortgage-news/anzs-mortgages-grow-despite-recent-lending-clampdown/246909/

Bets on ANZ for first to fall?

>> No.8021128

you dont know how bad things really are.

https://medium.com/@matt_11659/matt-barrie-australias-economy-is-a-house-of-cards-6877adb3fb2f

>> No.8021177

>>8021128
to be honest I've been expecting this for 2 years now... but the bubble just won't go.

>> No.8021179

>>8021106
Just wait until the house of cards that is the Chinese economy takes a shit. I hope your angus is peppered m8.

>> No.8021188

Don't worry. The government always makes sure their self-created artificial bubbles never pop.

Look at student loans. This should have popped ages ago with tuition and debt skyrocketing every year. They managed to contain default rates by making new rules that say you don't have to pay anything back if you don't make enough money.

The government will do everything in it's power to keep this bubble going.

>> No.8021222

So what do we short? Australian construction companies and bonds?

>> No.8021250

>>8021222
Credit default swaps?

>> No.8021281

>>8021188
Umm they literally lowered the threshold of income to force more people to payback and also made it so you can't just fuck off to another country without paying.

>> No.8021331

>>8021177
would the government even let the bubble pop? All the boomers I know personally are balls deep in real estate. They own 3 - 4 fucking houses. If it happens, they're going to buttblasted lol. They fucking deserve it, cunts.

>> No.8021402

>>8021222
ANZ? Anything really. This will hit most of the economy.

But the problem is timing. This bubble has been bad for a long time and it's not really a secret here (especially after 2007). It's hard to time the burst.


>>8021188
>The government always makes sure their self-created artificial bubbles never pop.
I fear they've lost the restraints on this one. They tried tightening loans, but ANZ still gives more and more. see >>8021117

>>8021331
>All the boomers I know personally are balls deep in real estate. They own 3 - 4 fucking houses.
Do they own them, or just have a mortgage?
If they own them, they might just ride the burst for a couple decades and keep the property as retirement prep.
Otherwise they will struggle to pay off that mortgage if the prices fall significantly.
My parents timed it well with one property I think. They seemed to "wake up" recently to their poor liquidity situation.

>> No.8021419

>>8021281
It doesn't matter. The fact that governments around the world introduced this new income-based- repayment to lower loan default rates is an admission that the system is broken and rather than let the bubble pop naturally they all opted to put a band-aid on it to keep it going.

They will come after you if you live in Canada UK or Japan.

>> No.8021532

>>8021331
well this is why the crash has/will be delayed for as long as possible. probably wont be until the next decade. they know the next crash will be the absolute just'ening and so many people will be wiped out. my parents and their friends among them. The gov will have to print so much money to bail people out hyperinflation wouldnt be a stretch to imagine

>> No.8021570

>>8021188
>They managed to contain default rates by making new rules that say you don't have to pay anything back if you don't make enough money.
That's much harder to do with real property. Firstly, I think the mortgages are lent by private banks, not the government (need to check how the loan system works for students). Secondly, there are significant rates with owning property too, like tax, that may force people to sell now.
And - https://www.businessinsider.com.au/australian-bank-lending-standards-mortgage-fraud-2018-2


And that government investment for students will create a significant liquidity issue within their government, creating the need to print money and pay off the debt of supplying that education.

>> No.8021597

>>8021532
hyperinflation would lead to increase property purchases however... that would be an interesting situation. Means I can finally buy clay.

>> No.8021897

>>8021570
Student loans are lended by banks. The government guarantees the loans by saying they will pay the loan with tax payer money if the student can't pay it.

During the housing crisis before 2007-8 it worked virtually the same way. Banks Gabe out mortgages because the US government said they would back the loan if the borrower couldn't pay. What happened was the price of homes skyrocketed because everyone could afford to pay higher and higher prices since the government backed it. Eventually it became obvious that people couldn't meet the minimum obligations of mortgage payments and the bubble popped.

But yes it is probably a little harder to introduce income based repayment for mortgages. Just lower interest rates. Let people use their super as a down payment....there will always be a way to keep it going.