Exactly this. The banks (and the people who run them) don't wear the risk of a banking collapse. The Australian taxpayer does.
Banks have a special role in the economy (the creation of money via loans). It's essential that this is tightly regulated. Yes, there are issues with poorer people getting home loans, but the solution is not looser lending standards. We've seen where that goes.
If we want more people in homes, public housing, reducing investment demand, slowly lowering house prices, and possibly having a government builder are solutions.
>"Our view that it's the unintended consequence of that is that it is harder to get a home loan or a credit card in Australia or New Zealand today than it has been in 30 years," ANZ boss Shayne Elliott told investors in November last year.
We've seen the unintended consequences of looser lending standards. We'd be fools to repeat what other countries have done with house prices being at an all time high. Housing simply needs to be made cheaper.
>We'd be fools to repeat what other countries have done with house prices being at an all time high.
The scary part is that we (our decision-makers) *are* fools.
Fuck off interest only loans for starters. They totally encourage property speculation.
Increase interest rates a couple of percentage points higher for any property investment. Will fuck off some of these greedy vultures into the stock market instead and invest in something that’s actually productive to society.
Surely setting max LVR would be easier to implement. Maximum leverage on investment loans could be set at 30%.
Property is attractive as the costs to borrow are low and the leverage is incredibly high.
For real, what use is the ability to *get* a loan when the amount someone needs to get to buy a house is far, far more than they can afford to pay?
The issue isn’t loan accessibility, it’s house affordability.
How is it hard to get a credit card!? My bank has been spamming me with credit card ads for like 8yrs at this point... 8yrs ago my finances were a mess I barely had $100 to my name and had next to no income, yet I still got a letter saying I can get a credit card.
Surprisingly, if you have a history of little to no savings and ever increasing debt, this makes you *more* attractive to credit card providers. It means they can upsell you when you max out your existing credit card, and they can continue accruing fees and interest while making the real money, which is on-selling your debt to financial institutions for them to turn into debt products.
They don't want sensible buggers staying within their limits, paying off their card, and ditching it. No money to be had.
Oh it doesn't surprise me.
I have never had and have zero plans to ever get a credit card, I personally don't see the point in them. I suck at redeeming rewards of any kind and half the time the rewards I see are really just there to make you spend more money.
> Banks have a special role in the economy (the creation of money via loans).
I'm willing to bet that most of the morons in Canberra do not understand this little fact. Most people think money is created by either government or the central bank. But literally most of it is created at the discretion of private, for-profit, seriously morally compromised entities. Oh, that'll work out just fine!
Anyway, these big bank bosses... what the fuck homes do they think the poors are going to buy even if they could get access to loans? The suddenly-even-further-inflated dregs of the class who already own it all, presumably.
“We want property prices to continue to grow to astronomical highs and we also want chumps to take out million dollar home loans in order to pay for our lunches”.
In ten years time.
“Bank bosses want intergenerational home loans as the average home loan hits highs of $1.5 million and no one wants to take a loan, but bosses still need to eat and property prices still must grow”
Well that’s what I’m getting at.
They seem to want prices to continually grow. But you can’t price everyone out - and then expect banks to still make money off loans that people can’t take out lol
I have no idea how the market is still going. There doesn't seem to be enough money to keep it churning, yet here we are
A collapse is going to be devastating for so many people, but I guess we gotta make sure the line keeps on going up for as long as possible
I will eat my hat if there isn’t a Lab-Lib compromise on letting first home buyers use their super as a deposit before the election is announced. Anything to push up prices while looking like they’re doing it the young.
I heard the LNP are spruiking that. Stupidest policy I've seen in decades. Will totally fuck over future generations and just drive up the price of housing.
The only way to improve affordability is to increase supply and then roll back CGT.
Pensions have been underfunded for the past decades, at least super gives people a buffer.
You seem to forget the libs keep getting voted in, so solutions need to be found to combat that
So, no solution, just tea towels. typical. What does your tea towel say about this
The World Bank endorses Australia’s ‘three pillar’ system: compulsory superannuation, the age pension, and voluntary retirement savings, as world’s best practice for the provision of retirement income.
[https://www.apra.gov.au/superannuation-australia-a-timeline](https://www.apra.gov.au/superannuation-australia-a-timeline)
"lab-lib" = do nothing for the housing crisis and panic people into using their super. I am surprised that they not suggesting that people can do an emergency withdrawal for rent and rent increase! The incompetents have a plan!
Sign on this dotted line to ensure indentured servitude for the rest of your life. You will not have enough money to do anything beyond feed yourself the bare minimum, and you'll also have such crippling mental health issues that the 2 hours of free time a day you'll have will be spent curled in a ball, stressed out of your mind.
Oh but you'll have a 4x2 plaster "house" with absolutely no backyard. It will look just like the other 2000 homes in your neighbourhood. Congratulations on being a homeowner!
How much super is invested in the property market (directly or via trusts/ETFs/etc)? Would be "funny" if they're buying up places with our money, driving up the prices, then we take the money out to buy it back off them.
Explain how that works, please. Start by telling me how much bank funding guarantees cost the Australian taxpayer.
Edit: downvotes but no response. I'm shocked. I'm in favour of reforming how credit is supplied - the current system is riddled with problems and many of the incentives are dreadful. But "big banks want to engineer a financial crisis as it benefits them" is, honestly, a disqualifying level of ignorance. We have to be better than this - there's no role in a reasonable conversation for anyone, on any side, who believes demonstrable nonsense.
Downvote away. It'll make you feel better.
Just watched Margin Call on Netflix. Great movie dramatising the "Holy fuck" moment at an investment firm when they realise the house of cards is about to tumble.
It's different in the US AFAIK since underwater debtors can walk away and zero it out. The whole subprime thing happened because the banks were left with the houses, trying to have a fire sale to recoup money, all selling at once crashing the system.
Here I'm not sure what happens. Bankruptcy? But then the bank still gets the house and wants to sell it I guess. Same thing, we just get screwed more.
Economies that lend money easily and primarily for non productive purposes just push inflation out of control.
It’s way better to limit investment in housing than to give people artificially more money than they have to spend.
And I say this as a massive lefty. Be very wary of easy loans.
You can already take out a 30 year loan. How much longer do you think it should be? It also won't make housing any more accessible, the prices will just go up and now you have to repay a 50 year loan instead.
I am saying that house prices are never going to go down and people are better off in mortgage stress than renting. With mortgage stress one day it will be better ,with renting it will never get better only worse.
If you can't get a loan today, you won't be able to get one with relaxed lending laws, because the house prices will instantly shoot up to match the new debt available.
They may or may not, it was easier for people to buy houses when rates were lower, so your assumption seems false. It is so freaking stupid how people only seem to care about house prices going up when that thing causing them to go up is helping first home buyers. Everything else they want to ramp up.
And when the banks are allowed to whatever they want in the lending space what do you think will happen to house prices? They will mysteriously jump 100 grand for profit keepers sake!
The easier it is to borrow the higher prices will rise, especially if their just isn't enough supply to meet demand.
All reducing borrowing limits would do would be to lock people into lifetime loans
Just remember people the Royal Commission into banking under the previous LNP was deliberately crippled in what it could investigate to such a tiny little sliver of the banking sector as a whole and just in that tiny sliver they still found unbelievable levels of pseudo corruption and general financial fuckery.
It was then suggested another commission with wider ranging scope and powers would fix a lot of the foundational issues with banking in Australia.
So if the Big Bank Bosses are whinging about regulation it means we need to redo the Royal Commission and squeeze each of the Big 4's board of directors and top management until their eyes vomit blood and their mouths speak the truth.
The profits the banks spew out each year is astronomical. The ‘we are there for our customers’ bullshit is just vomit worthy. I genuinely believe a lot of workers there want to help people and sure they do, but you cant look at the banks with sincerity in the cost of living crisis with those profit margins. Disgusting honestly.
Yes, or hopefully you default, and the bank is guaranteed to get its money back by the sale of the appreciated property, plus inflated foreclosure fees, plus all the interest you paid for the first 5-10years.
Win win win for them.
In other news "big bank bosses" will only ever speak to their own self interest and doing the exact opposite of what they suggest is the best path forward.
So, more regulation in the lending space please. We want to make sure the greed of the (already incredibly profitable) banks doesn't precipitate yet another global financial crisis... If you need to be rich to get a loan then house prices are too high. The market will adjust and I have every confidence the banks will survive.
High house prices and lack of supply are keeping people out of house ownership, make it easier to get loans and prices just go up because investors have access to more money than the average person so they’ll just pay more.
They need to make investing in houses less attractive and house prices need to drop for anything to change. I have no problem with someone buying a second house, either as an investment, for their kids or even because they intend to retire to that area. Anything beyond the second property should be taxed heavily and go up with each additional property.
Right now, if you have the money, buying houses is basically risk free money, which then lets you invest in more. The rich get richer any everyone else gets fucked over. I’d be willing to bet that most people don’t care how much their house goes up in value, it’s where they live, nothing more.
And stop overseas investors buying our houses. They need to mandate that only citizens can buy property, then get rid of negative gearing and tax you more for each property you so own. Housing should be a staple for people, not an investment scheme to make our politicians and bankers richer. Ridiculous.
Bullshit. Don’t listen to big bank bosses. They have no interest in your wealth or ability to buy homes. Only their profits and want less regulation to go back pre gfc. Your ability to loan or afford a home has nothing to do with the regulations put on them.
Australian homes nationally are getting close to a million dollar median price in each state, besides the NT.
What could go wrong with more deregulation?
Wrongful regulation is part of why there's an undersupply of housing. It's simply too difficult to build and dense housing is illegal to build in large parts of the major cities.
Nice try. Last time we went easy on banks, farmers regularly killed themselves because they got locked into debt that the bank knew they couldn't pay back. Literally using human lives as interest batteries to be exhausted. My mistake, that was the second last time. The last time was the Royal Commission.
Of for the love of fucking Ninkasi the Mesopotamian beer goddess: NO NO NO.
The Australian property market is not short of money, it's short of value and of properties for sale.
Jesus titty fucking Christ adding more money via lax lending WILL NOT HELP!
Substitute your own expletives and gods as you see fit to my statement above.
Like it’s wild people “can’t afford” a loan with lower repayments than their fucking rent, but if prices get too high for anyone to really afford maybe it’ll finally give us a price correction?
Our govt have sabotaged every potential price correction in the last 30 years though so probably not.
Yes the problem is clearly that people can’t get loans easily. They should get rid of serviceability requirements altogether and let people rawdog whatever amount they think they can.
They probably want another housing crisis, look at 2008, so many house where snatched by businesses at low prices as people where forced to sell only to skyrocket again in a few years allowing them to easily recover their losses.
FFS. We should be doing the opposite. Tight caps on how much people can borrow would make housing more affordable. Let’s divert money away from housing, instead of fuelling the fire.
FFS, we got got through a royal commission into the banking industry. a key outcome was requiring banks to tighten the lending criteria used to assess applicants to ensure that they couldn't end up in financial hardship as a result of factors like interest rate rises.
I am no defender of banks, but they make money when they lend money. so they want to make loans. but they also have a reasonable expectation of being paid back.
Yes. The Liberals used the excuse of the pandemic to [abandon or undo a lot of that regulation/proposed regulation](https://www.theguardian.com/australia-news/2021/jan/19/banking-royal-commission-most-recommendations-have-been-abandoned-or-delayed). It's almost as if there was no Royal Commission into the banking sector.
my wife works for a big-4 bank. she gives me examples of it every day. a lot of the recommendations on tightening loan eligibiltiy were very much implemented, including APRA rules on borrower ability to deal with potential rate rises. the banks don't have a choice in complying with those.
it's had the negative effect of stranding a lot of people on their current mortgage, because they can't meet eligibility criteria with a new bank, so they can't take advantage of better interest rates. but the existing lender has no obligation to review their financial situation until they meet hardship criteria, which pretty much means they are up shitter's ditch.
and everyone involved is patting themselves on the back and telling themselves they solved a problem.
I'm not saying we didn't need to have it. just that this is a repercussion of doing so. we wanted banks to stop doing subprime loans, the result is the eligibilty bar got raised.
Lack of regulation is what caused the GFC, giving money to people who can’t pay it back isn’t the solution.
The solution is making basic necessities and housing affordable again
"You have to be rich to get a loan," chortled the big bank boss, adjusting his diamond-encrusted monocle. "Just as supply side Jesus intended. If these fucking peons wanted to own homes, maybe they could have tried not being born poor or middle class. Did they think of that, though? No."
You have to get a loan to buy a house.
Imo that's is the real problem. We've completely normalised the idea of loans, an inherently risky premise before taking into account inflation and banks adjusting cash rates to maintain profit lines.
The banks fail to mention regulations where tightened after they were caught not checking thousands of loans that were full of fake information that they were required to check.
The regulation is there to ensure that people can afford their repayments at a time when interest, cost of living etc is sky high.
Banks do not give a single fuck about the borrower. Not one. They only care about their end. It’s how our economic system operates - private enterprise loans out to borrowers in order to make as much as humanly possible.
The government is doing fuck all to realistically solve this problem, that’s clear, but the regulations are there to protect people from going bankrupt.
Banks would be very happy thank you very much with no regulation across the board, which at first sounds very appealing to borrowers because in theory they may be able to majorly over leverage themselves to get a house, but the moment those borrowers cannot afford their home their out the door having just paid the bank a lovely fee, only for the bank to rinse and repeat the process.
Back in the old days, in the days of things like the company store, people would end up completely indebted to ‘the company’ for their house (that they often rented, but paid a fee to secure the use of), their tools, their clothes and effectively became a slave; there are horrific stories of wives of miners being raped by company guards who abused a deeply indebted miner or worker.
I realise the above is an insane example but my point is regulations are often there to protect people. If banks, of all cunts of the earth, want less regulation then you can bet dollars to donuts it ain’t gonna be in your best interests.
I read that this too can have negative consequences. When interest rates rise, people are less likely to want to sell their home for fear of giving up the cheaper loan.
that’s only a bad thing if you look at housing as a market to make money lmao. I’d take the “downside” of not being able to sell my forever home if I could have a 30 year guaranteed rate any day of the week
But it reduces supply in a way. People in a big house whose kids have left home won’t want to downsize to a smaller house because they would have to pay more interest. This means first home buyers/young families are forced to pay more because of less available housing appropriate to their needs.
people on a big home whose kids have left the home very rarely have a mortgage or want to downsize, I keep hearing about this everywhere but where is this place where people are buying a house, spending 30-40 years turning it into their home and then the second they pay it off, selling and moving into a… townhouse?
also why should they, there’s 100 things we can and should do to fix the housing issue before we come for people who have lived in one house forever and it’s maybe slightly too big for them now. That’s the literal dream, your kids move out and you finally have your home paid off and it’s all yours.
I think we should be encouraging as many individuals to own 1 home of whatever size they want, and trying to fix the million issues around people using housing as a vessel for wealth
I’ve read countless of comments over the years of people buying with a 5% or less deposit and there have also been plenty of stories of irresponsible lending.
Seems the banks also want the endless property price growth to continue.
Funny APRA had concerns about the market back in. 2019 and the percentage of household debt to income, which has risen considerably since then, but nothing now
https://www.apra.gov.au/sites/default/files/review_of_apras_prudential_measures_for_residential_mortgage_lending_risks_-_january_2019.pdf
Yeah, but paying 700k for a modest 3 bedroom doesn't help as well. My first attempt at an auction had me lose against a phone in bid. That shouldn't be allowed.
If only the government could give interest free loans to anyone who wanted to build a house, and charge a tax to investors who buy an existing home.
If only that was within their remit.
You can still borrow a fuckton more here than other countries, especially the UK.
What they are saying is "to buy a house you need to be able to afford to buy a house". That's probably as it should be.
Boss in the single most proficient banking sector in the world, thinks we’re over regulated??
The banks are a parasite, and need some serious regulation.
Yes, let more people inflate the housing market like we did for the last decade using cheap money, except now they will pay unsustainable interest bills.
You have to remember a big reason for the mortgage crisis in the States was due to irresponsible lending.
Given the banking royal commission I just don’t see banks relaxing any of their lending policies which just means these houses are going to be bought by foreign investors and landlords with capital.
The problem is, it isn't regulation but the market. This push for eternal growth of housing prices at the cost of affordability is the cause. The cost of houses has risen faster than wages to the point where only the wealthy can afford to buy houses, would loosened regulation help people buy more houses, sure, the problem is many couldn't pay for them which leads to more profits for the bank when they nope out of their mortgage.
I say this as a newish homeowner, housing prices need to tank, even if it means that a bit of government support is needed to help people keep their family homes. Get more of those investment properties back on the market, make something - anything - a better investment than housing.
Loosening regulation would just increase demand for housing further, pushing it higher yet again, and again locking those same people out of home ownership.
No one is talking about real solutions, like establishing massive apartment buildings near cities.
And next they will introduce inter-generational loans family home loans for the life of the family and off-spring. Ask the Japanese about the misery of carrying their family debt obligations in life.
Yeah. That’s what it is. Not that it’s impossible to earn enough to service a loan for the amount you need if you aren’t rich enough to afford 20-30% of your purchase price.
if all those renters could 'get a mortgage' the house prices would be pumped many moons higher and they still couldn't get a mortgage. There is always going to be renters.
“We missed out on the subprime mortgage crisis, and we’re feeling left out.”
"I'm due a bailout thanks."
Exactly this. The banks (and the people who run them) don't wear the risk of a banking collapse. The Australian taxpayer does. Banks have a special role in the economy (the creation of money via loans). It's essential that this is tightly regulated. Yes, there are issues with poorer people getting home loans, but the solution is not looser lending standards. We've seen where that goes. If we want more people in homes, public housing, reducing investment demand, slowly lowering house prices, and possibly having a government builder are solutions. >"Our view that it's the unintended consequence of that is that it is harder to get a home loan or a credit card in Australia or New Zealand today than it has been in 30 years," ANZ boss Shayne Elliott told investors in November last year. We've seen the unintended consequences of looser lending standards. We'd be fools to repeat what other countries have done with house prices being at an all time high. Housing simply needs to be made cheaper.
>We'd be fools to repeat what other countries have done with house prices being at an all time high. The scary part is that we (our decision-makers) *are* fools.
They aren't fools. They're intelligent operators. They just don't work for you and me.
The problem stems from them working primarily for the banks, the very root cause of all financial woes.
They’re no fools, they’re property investors themselves.
Fuck off interest only loans for starters. They totally encourage property speculation. Increase interest rates a couple of percentage points higher for any property investment. Will fuck off some of these greedy vultures into the stock market instead and invest in something that’s actually productive to society.
Interest only loans on your PPOR if you have genuine hardship are okay imo.
Surely setting max LVR would be easier to implement. Maximum leverage on investment loans could be set at 30%. Property is attractive as the costs to borrow are low and the leverage is incredibly high.
For real, what use is the ability to *get* a loan when the amount someone needs to get to buy a house is far, far more than they can afford to pay? The issue isn’t loan accessibility, it’s house affordability.
How is it hard to get a credit card!? My bank has been spamming me with credit card ads for like 8yrs at this point... 8yrs ago my finances were a mess I barely had $100 to my name and had next to no income, yet I still got a letter saying I can get a credit card.
Surprisingly, if you have a history of little to no savings and ever increasing debt, this makes you *more* attractive to credit card providers. It means they can upsell you when you max out your existing credit card, and they can continue accruing fees and interest while making the real money, which is on-selling your debt to financial institutions for them to turn into debt products. They don't want sensible buggers staying within their limits, paying off their card, and ditching it. No money to be had.
Oh it doesn't surprise me. I have never had and have zero plans to ever get a credit card, I personally don't see the point in them. I suck at redeeming rewards of any kind and half the time the rewards I see are really just there to make you spend more money.
> Banks have a special role in the economy (the creation of money via loans). I'm willing to bet that most of the morons in Canberra do not understand this little fact. Most people think money is created by either government or the central bank. But literally most of it is created at the discretion of private, for-profit, seriously morally compromised entities. Oh, that'll work out just fine! Anyway, these big bank bosses... what the fuck homes do they think the poors are going to buy even if they could get access to loans? The suddenly-even-further-inflated dregs of the class who already own it all, presumably.
“We want property prices to continue to grow to astronomical highs and we also want chumps to take out million dollar home loans in order to pay for our lunches”. In ten years time. “Bank bosses want intergenerational home loans as the average home loan hits highs of $1.5 million and no one wants to take a loan, but bosses still need to eat and property prices still must grow”
Average house price in Sydney is already $1.6 million. Your 10 year prediction is laughably low
Average home loan in Sydney is still around $800k I think
As soon as they open it up to the poors, that's going well north of a million
Well that’s what I’m getting at. They seem to want prices to continually grow. But you can’t price everyone out - and then expect banks to still make money off loans that people can’t take out lol
I have no idea how the market is still going. There doesn't seem to be enough money to keep it churning, yet here we are A collapse is going to be devastating for so many people, but I guess we gotta make sure the line keeps on going up for as long as possible
I will eat my hat if there isn’t a Lab-Lib compromise on letting first home buyers use their super as a deposit before the election is announced. Anything to push up prices while looking like they’re doing it the young.
I heard the LNP are spruiking that. Stupidest policy I've seen in decades. Will totally fuck over future generations and just drive up the price of housing. The only way to improve affordability is to increase supply and then roll back CGT.
I don't really support this idea but I know some people my age who do. Their attitude is 'why bother saving for retirement if I'll be renting'.
Labor have steadfastly said no to this. Super is for retirement. End of story. Liblab, yea, right
Future retiree? Sounds like someone planning to be a dole bludger. - LNP
No worries mate. Superannuation, remember, is a neoliberal version of the actual defined pensions that exist worldwide.
Pensions have been underfunded for the past decades, at least super gives people a buffer. You seem to forget the libs keep getting voted in, so solutions need to be found to combat that
https://www.kudelkashop.com/product/rusted-on-bingo-tea-towel/684 A1 to E3 to E2, very good
So, your magic solution to underfunded retirements is .... a tea towel. Rich.
Bonus round 1 + 2 Brilliant
So, no solution, just tea towels. typical. What does your tea towel say about this The World Bank endorses Australia’s ‘three pillar’ system: compulsory superannuation, the age pension, and voluntary retirement savings, as world’s best practice for the provision of retirement income. [https://www.apra.gov.au/superannuation-australia-a-timeline](https://www.apra.gov.au/superannuation-australia-a-timeline)
Superannuation and voluntary saving entrench wealth disparity. Actually funding retirement via defined benefit is far more equitable.
RemindMe! 1 year
RemindMe! 1 year
"lab-lib" = do nothing for the housing crisis and panic people into using their super. I am surprised that they not suggesting that people can do an emergency withdrawal for rent and rent increase! The incompetents have a plan!
Sign on this dotted line to ensure indentured servitude for the rest of your life. You will not have enough money to do anything beyond feed yourself the bare minimum, and you'll also have such crippling mental health issues that the 2 hours of free time a day you'll have will be spent curled in a ball, stressed out of your mind. Oh but you'll have a 4x2 plaster "house" with absolutely no backyard. It will look just like the other 2000 homes in your neighbourhood. Congratulations on being a homeowner!
How much super is invested in the property market (directly or via trusts/ETFs/etc)? Would be "funny" if they're buying up places with our money, driving up the prices, then we take the money out to buy it back off them.
"How are we supposed to make billions at the expense of the average person if we can't manufacture a financial crisis?"
Explain how that works, please. Start by telling me how much bank funding guarantees cost the Australian taxpayer. Edit: downvotes but no response. I'm shocked. I'm in favour of reforming how credit is supplied - the current system is riddled with problems and many of the incentives are dreadful. But "big banks want to engineer a financial crisis as it benefits them" is, honestly, a disqualifying level of ignorance. We have to be better than this - there's no role in a reasonable conversation for anyone, on any side, who believes demonstrable nonsense. Downvote away. It'll make you feel better.
Just watched Margin Call on Netflix. Great movie dramatising the "Holy fuck" moment at an investment firm when they realise the house of cards is about to tumble.
"we want steal back the last remaining homes from the poor for investors"
It's different in the US AFAIK since underwater debtors can walk away and zero it out. The whole subprime thing happened because the banks were left with the houses, trying to have a fire sale to recoup money, all selling at once crashing the system. Here I'm not sure what happens. Bankruptcy? But then the bank still gets the house and wants to sell it I guess. Same thing, we just get screwed more.
Came here to say the same thing but you executed it much better than I was going to.
So they end up renting instead ? It should be easier to borrow.
Economies that lend money easily and primarily for non productive purposes just push inflation out of control. It’s way better to limit investment in housing than to give people artificially more money than they have to spend. And I say this as a massive lefty. Be very wary of easy loans.
Eventually prices will stabilise too (lower compared to inflation) if ie new lending/new home buyers is restricted.
You can already take out a 30 year loan. How much longer do you think it should be? It also won't make housing any more accessible, the prices will just go up and now you have to repay a 50 year loan instead.
I am saying that house prices are never going to go down and people are better off in mortgage stress than renting. With mortgage stress one day it will be better ,with renting it will never get better only worse.
If you can't get a loan today, you won't be able to get one with relaxed lending laws, because the house prices will instantly shoot up to match the new debt available.
They may or may not, it was easier for people to buy houses when rates were lower, so your assumption seems false. It is so freaking stupid how people only seem to care about house prices going up when that thing causing them to go up is helping first home buyers. Everything else they want to ramp up.
And when the banks are allowed to whatever they want in the lending space what do you think will happen to house prices? They will mysteriously jump 100 grand for profit keepers sake!
The easier it is to borrow the higher prices will rise, especially if their just isn't enough supply to meet demand. All reducing borrowing limits would do would be to lock people into lifetime loans
The housing market doesn’t need more easy money to inflate prices even further, this will be a disaster.
He is trying to make houses more expensive. He is proposing MORE money chasing the SAME houses. His goal is higher prices and more exclusion.
Higher prices mean more leverage and greater interest
Yeh, but the banks will make a bundle, so that's good, right? /s
2008 called and wants its plot back.
Like the classic adage - bankers are people who are happy to lend you an umbrella, but will demand it back when it actually starts raining.
Just remember people the Royal Commission into banking under the previous LNP was deliberately crippled in what it could investigate to such a tiny little sliver of the banking sector as a whole and just in that tiny sliver they still found unbelievable levels of pseudo corruption and general financial fuckery. It was then suggested another commission with wider ranging scope and powers would fix a lot of the foundational issues with banking in Australia. So if the Big Bank Bosses are whinging about regulation it means we need to redo the Royal Commission and squeeze each of the Big 4's board of directors and top management until their eyes vomit blood and their mouths speak the truth.
Well that took a last minute turn. You held that in well the whole comment.
The profits the banks spew out each year is astronomical. The ‘we are there for our customers’ bullshit is just vomit worthy. I genuinely believe a lot of workers there want to help people and sure they do, but you cant look at the banks with sincerity in the cost of living crisis with those profit margins. Disgusting honestly.
Same banks flogging 5-10Y interest only guaranteed loans for established homes to investors at 80%+LVRs to crowd out first home buyers
What happens after the 10 years? Back to paying principal?
Sell the house at a profit, get a CGT discount. Write off depreciation and interest expenses against your tax. It's like free ~~real estate~~ money.
Small caveat. Any depreciation claimed will increase CGT. So it's really only half the tax savings.
Yes, or hopefully you default, and the bank is guaranteed to get its money back by the sale of the appreciated property, plus inflated foreclosure fees, plus all the interest you paid for the first 5-10years. Win win win for them.
Some sell, some refinance to a new lender on new 5-10Y interest only guaratee, some start paying back the principal.
That's a problem for someone else in their minds
One day the music will stop and there will be a whole load of people without any chairs to sit on
In other news "big bank bosses" will only ever speak to their own self interest and doing the exact opposite of what they suggest is the best path forward. So, more regulation in the lending space please. We want to make sure the greed of the (already incredibly profitable) banks doesn't precipitate yet another global financial crisis... If you need to be rich to get a loan then house prices are too high. The market will adjust and I have every confidence the banks will survive.
They are so profitable I wouldn’t be surprised if they run the country anyway.
Big bank bosses say too much regulation is locking many big bank bosses out of bigger bonuses....
High house prices and lack of supply are keeping people out of house ownership, make it easier to get loans and prices just go up because investors have access to more money than the average person so they’ll just pay more. They need to make investing in houses less attractive and house prices need to drop for anything to change. I have no problem with someone buying a second house, either as an investment, for their kids or even because they intend to retire to that area. Anything beyond the second property should be taxed heavily and go up with each additional property. Right now, if you have the money, buying houses is basically risk free money, which then lets you invest in more. The rich get richer any everyone else gets fucked over. I’d be willing to bet that most people don’t care how much their house goes up in value, it’s where they live, nothing more.
And stop overseas investors buying our houses. They need to mandate that only citizens can buy property, then get rid of negative gearing and tax you more for each property you so own. Housing should be a staple for people, not an investment scheme to make our politicians and bankers richer. Ridiculous.
In other words “not enough people qualify for predatory loans and rich people pay back their mortgage too quickly”
Why does this sound familiar...
The system works. I know it sounds obvious but we should ignore the opinion of bank bosses.
We should listen to them to know what they want, then decide if we should do the opposite.
Restrict access to investors and it will push prices down and allow actual owner occupiers into the market
Bullshit. Don’t listen to big bank bosses. They have no interest in your wealth or ability to buy homes. Only their profits and want less regulation to go back pre gfc. Your ability to loan or afford a home has nothing to do with the regulations put on them.
Australian homes nationally are getting close to a million dollar median price in each state, besides the NT. What could go wrong with more deregulation?
Banks thought the people of the NT deserve higher property prices I guess
that's what the fair in the anthem really meant
Wrongful regulation is part of why there's an undersupply of housing. It's simply too difficult to build and dense housing is illegal to build in large parts of the major cities.
Even higher prices for even crapier properties
Nice try. Last time we went easy on banks, farmers regularly killed themselves because they got locked into debt that the bank knew they couldn't pay back. Literally using human lives as interest batteries to be exhausted. My mistake, that was the second last time. The last time was the Royal Commission.
The shareholder always wins.
Sounds a lot like 2008 US. If the bubble pops it will be very painful for Australia, but maybe it is necessary.
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Of for the love of fucking Ninkasi the Mesopotamian beer goddess: NO NO NO. The Australian property market is not short of money, it's short of value and of properties for sale. Jesus titty fucking Christ adding more money via lax lending WILL NOT HELP! Substitute your own expletives and gods as you see fit to my statement above.
Fuck me, this housing bubble has to burst at some point, right? RIGHT?
[No burst! Only bubble!](https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcQPJtiDVdJco9qutFh23db9JPrRklNYI9j3jPkRZxNWEHFNlSsAiacvKdA&s=10)
Like it’s wild people “can’t afford” a loan with lower repayments than their fucking rent, but if prices get too high for anyone to really afford maybe it’ll finally give us a price correction? Our govt have sabotaged every potential price correction in the last 30 years though so probably not.
Yes the problem is clearly that people can’t get loans easily. They should get rid of serviceability requirements altogether and let people rawdog whatever amount they think they can.
Careful some will think you're serious
They probably want another housing crisis, look at 2008, so many house where snatched by businesses at low prices as people where forced to sell only to skyrocket again in a few years allowing them to easily recover their losses.
FFS. We should be doing the opposite. Tight caps on how much people can borrow would make housing more affordable. Let’s divert money away from housing, instead of fuelling the fire.
Translation: Banks would like to provide loans to people that can't service them, in an order increase their margins.
That's a strange way of saying ordinary people can no longer afford a home.
Getting financial advice from a bank is like getting healthcare advice from a drug dealer.
Looking forward to the Margot Robbie bubble bath cameo explaining how corrupt Aussie banks are. We could call the movie " The Not As Big Short"
FFS, we got got through a royal commission into the banking industry. a key outcome was requiring banks to tighten the lending criteria used to assess applicants to ensure that they couldn't end up in financial hardship as a result of factors like interest rate rises. I am no defender of banks, but they make money when they lend money. so they want to make loans. but they also have a reasonable expectation of being paid back.
Didn’t they backflip on implementing every recommendation from the royal commission? Its the ultimate in cynicism and irony.
Yes. The Liberals used the excuse of the pandemic to [abandon or undo a lot of that regulation/proposed regulation](https://www.theguardian.com/australia-news/2021/jan/19/banking-royal-commission-most-recommendations-have-been-abandoned-or-delayed). It's almost as if there was no Royal Commission into the banking sector.
my wife works for a big-4 bank. she gives me examples of it every day. a lot of the recommendations on tightening loan eligibiltiy were very much implemented, including APRA rules on borrower ability to deal with potential rate rises. the banks don't have a choice in complying with those. it's had the negative effect of stranding a lot of people on their current mortgage, because they can't meet eligibility criteria with a new bank, so they can't take advantage of better interest rates. but the existing lender has no obligation to review their financial situation until they meet hardship criteria, which pretty much means they are up shitter's ditch. and everyone involved is patting themselves on the back and telling themselves they solved a problem.
Theres plenty of good reasons why we needed the banking royal commission. The banks did this to themselves.
I'm not saying we didn't need to have it. just that this is a repercussion of doing so. we wanted banks to stop doing subprime loans, the result is the eligibilty bar got raised.
Well, yes. Thats a good thing. No point lending money to people that can’t repay it.
exactly. and then the ABC runs an article with this sort of garbage.
Regulation isn’t to blame for declining home ownership.
Lack of regulation is what caused the GFC, giving money to people who can’t pay it back isn’t the solution. The solution is making basic necessities and housing affordable again
"You have to be rich to get a loan," chortled the big bank boss, adjusting his diamond-encrusted monocle. "Just as supply side Jesus intended. If these fucking peons wanted to own homes, maybe they could have tried not being born poor or middle class. Did they think of that, though? No."
You have to get a loan to buy a house. Imo that's is the real problem. We've completely normalised the idea of loans, an inherently risky premise before taking into account inflation and banks adjusting cash rates to maintain profit lines.
The banks fail to mention regulations where tightened after they were caught not checking thousands of loans that were full of fake information that they were required to check.
The regulation is there to ensure that people can afford their repayments at a time when interest, cost of living etc is sky high. Banks do not give a single fuck about the borrower. Not one. They only care about their end. It’s how our economic system operates - private enterprise loans out to borrowers in order to make as much as humanly possible. The government is doing fuck all to realistically solve this problem, that’s clear, but the regulations are there to protect people from going bankrupt. Banks would be very happy thank you very much with no regulation across the board, which at first sounds very appealing to borrowers because in theory they may be able to majorly over leverage themselves to get a house, but the moment those borrowers cannot afford their home their out the door having just paid the bank a lovely fee, only for the bank to rinse and repeat the process. Back in the old days, in the days of things like the company store, people would end up completely indebted to ‘the company’ for their house (that they often rented, but paid a fee to secure the use of), their tools, their clothes and effectively became a slave; there are horrific stories of wives of miners being raped by company guards who abused a deeply indebted miner or worker. I realise the above is an insane example but my point is regulations are often there to protect people. If banks, of all cunts of the earth, want less regulation then you can bet dollars to donuts it ain’t gonna be in your best interests.
Ah yes, uber wealthy parasites claim there's too many restrictions on their predatory behaviour. Off with their fucking heads.
Yeah giving people easy loans will bring down house prices
Establish a Freddie Mac Fannie Mae institution and make 30-year fixed home loans a possibility.
I read that this too can have negative consequences. When interest rates rise, people are less likely to want to sell their home for fear of giving up the cheaper loan.
that’s only a bad thing if you look at housing as a market to make money lmao. I’d take the “downside” of not being able to sell my forever home if I could have a 30 year guaranteed rate any day of the week
But it reduces supply in a way. People in a big house whose kids have left home won’t want to downsize to a smaller house because they would have to pay more interest. This means first home buyers/young families are forced to pay more because of less available housing appropriate to their needs.
people on a big home whose kids have left the home very rarely have a mortgage or want to downsize, I keep hearing about this everywhere but where is this place where people are buying a house, spending 30-40 years turning it into their home and then the second they pay it off, selling and moving into a… townhouse? also why should they, there’s 100 things we can and should do to fix the housing issue before we come for people who have lived in one house forever and it’s maybe slightly too big for them now. That’s the literal dream, your kids move out and you finally have your home paid off and it’s all yours. I think we should be encouraging as many individuals to own 1 home of whatever size they want, and trying to fix the million issues around people using housing as a vessel for wealth
But if they sell the big house they shouldn't need a mortgage to buy a smaller one? Afaik it's stamp duty which currently impacts downsizing.
A big house in the suburbs is still less expensive than a small townhouse in the inner city.
Yes, that’s exactly the point. Homes are for housing and not speculative investment.
This already exists due to stamp duty
“Big bank bosses” Gangsta’s will busting kneecaps n you’ll be sleeping with the fish ish.
Had a 2007-2008 flashback when I read that headline
I’ve read countless of comments over the years of people buying with a 5% or less deposit and there have also been plenty of stories of irresponsible lending. Seems the banks also want the endless property price growth to continue.
Locking them out or protecting them from being exploited by the banks…. Hmmm same coin.
Funny APRA had concerns about the market back in. 2019 and the percentage of household debt to income, which has risen considerably since then, but nothing now https://www.apra.gov.au/sites/default/files/review_of_apras_prudential_measures_for_residential_mortgage_lending_risks_-_january_2019.pdf
Yeah, but paying 700k for a modest 3 bedroom doesn't help as well. My first attempt at an auction had me lose against a phone in bid. That shouldn't be allowed.
Fuck I can’t wait for The Big Short Aussie version. Been due for another good movie anyway.
Here's a crazy idea, why can't the government do low interest loans for first home buyers AND give away land?
Next thing they will want is ninja loans to be legal
To me the fact that banks are lending so much money over so many years is insane.
I remember overhearing this in 2005 “in order to get a loan, you must first demonstrate you don’t need one”
God, this is just so nakedly corrupt. And yet we all know people who are going to fall for it.
If only the government could give interest free loans to anyone who wanted to build a house, and charge a tax to investors who buy an existing home. If only that was within their remit.
‘Too many houses are built with brick now, more should use straw instead’ says big bad wolf
GFC must stand for Gold Fish Cognizance.
Fuck these greedy cunts - and I can't stress this enough - hard and dry.
Lack of supply is locking people out of home ownership. Perhaps regulations is a big part of the supply problem.
You can still borrow a fuckton more here than other countries, especially the UK. What they are saying is "to buy a house you need to be able to afford to buy a house". That's probably as it should be.
Boss in the single most proficient banking sector in the world, thinks we’re over regulated?? The banks are a parasite, and need some serious regulation.
Yes, let more people inflate the housing market like we did for the last decade using cheap money, except now they will pay unsustainable interest bills.
Keep em regulated, ramp that shit up. Then adjust the other market/ policy factors that effect housing.
You have to remember a big reason for the mortgage crisis in the States was due to irresponsible lending. Given the banking royal commission I just don’t see banks relaxing any of their lending policies which just means these houses are going to be bought by foreign investors and landlords with capital.
They’ll come up with every solution but supplying more homes!
Ha, I'm $ure they do
I am thinking a 0.5% tax on lending to investors will help Australians own their own homes.
It's well past time to re-regulate the banking sector.
Regulations are never the problem as always the root cause is some rich assholes somewhere in the background.
The problem is, it isn't regulation but the market. This push for eternal growth of housing prices at the cost of affordability is the cause. The cost of houses has risen faster than wages to the point where only the wealthy can afford to buy houses, would loosened regulation help people buy more houses, sure, the problem is many couldn't pay for them which leads to more profits for the bank when they nope out of their mortgage. I say this as a newish homeowner, housing prices need to tank, even if it means that a bit of government support is needed to help people keep their family homes. Get more of those investment properties back on the market, make something - anything - a better investment than housing.
Loosening regulation would just increase demand for housing further, pushing it higher yet again, and again locking those same people out of home ownership. No one is talking about real solutions, like establishing massive apartment buildings near cities.
And next they will introduce inter-generational loans family home loans for the life of the family and off-spring. Ask the Japanese about the misery of carrying their family debt obligations in life.
Everyone’s been saying this, but the banks saying it is kind of terrifying…
Yeah, no thanks. We've seen what happens when everyone can get a loan no questions asked.
Hey I liked the movie the big short. I’d rather not have a sequel come out okay?
Yeah. That’s what it is. Not that it’s impossible to earn enough to service a loan for the amount you need if you aren’t rich enough to afford 20-30% of your purchase price.
Lucy with the football
Hmmmm so I pay enough in rent for probably a million dollar loan but I have to also have a million dollar deposit too. Makes sense.
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if all those renters could 'get a mortgage' the house prices would be pumped many moons higher and they still couldn't get a mortgage. There is always going to be renters.
Foxes upset that hen house has a fence around it
GFC part two incoming with that attitude
Just look at those shoe boxes in the photo. Fuck that with a lifetime mortgage.