scamp why dont you look at the ABS site before getting so pathetically strident. your just an IT guy remember you dont actually know everything , none of us do.
gee housing is probably heating to warm up the house…… are you just joking or grasping at straws?
really I cant do much more, what part of housing do you not understand?
" CPI would capture only the cost of consuming owner-occupied housing services ………"
this un referenced quote demonstrates that housing costs arent in the CPI???? que? what do you think the " the cost of consuming owner-occupied housing services " is comprised of?
Scamps right,
It's here
And here
It's goods and service relating to households and housing – not the houses themselves. The cost of a house purchase is in the CPI (the fees etc) but not the cost of the house itself.
I agree that the cost of the house isnt there, the cost of buying or renting it is
yarpos wrote:I agree that the cost of the house isnt there, the cost of buying or renting it isOk well we do agree then that the cost of housing isn't in the CPI.
the cost of buying = nothing compared to equity / price inflation etc.
I'm not sure rents are in the CPI either by the way. Interest repayments certainly aren't, I'm sure of that.
Not sure of the rents though. But they are low enough and they haven't gone up exponentially like the houseprices. There's a reason rent price is so low : People just cannot afford it ( or don't WANT to afford it.. )Truth is : Governments and councils have personal gain with high houseprices. They stimulate them.
Banks also have personal gain with high house prices, they also stimulate them.The screwed ones are : The working class people and everyone who bought properties after 2005.
Although in real terms, you would have to go back to 1998 to have made any profit on housing.just to finish this topic finally and clear out facts from what various people think.
I called the ABS, they pointed me to this paragraph in a doc explaining CPI:
10.51 Third, the CPI basket includes items that are mutually exclusive for individual households. For example, both the rent payments of renter households, and the amounts paid by owner-occupier households for purchasing their principal residence are in the basket. No single household will incur both these expenses on their principal residence at the same time.
if anyone is intrested the doc is: http://www.abs.gov.au/AUSSTATS/[email protected]/2f762f95845417aeca25706c00834efa/afd2ae8c96b203f1ca25705f001ecaec!OpenDocument
as for posting drivel scamp, that is hilarious coming from you of all people, although of course you wouldnt see that.
I have my moments but I would be happy for anyone to look at our collective posts and decide who is the drivel generator and who tries to contribute something to the benefit of others, rather than stroking their egos and other parts.
excuse me now, I have some actual property transactions to do
ummester wrote:Scamps right,It's here
And here
It's goods and service relating to households and housing – not the houses themselves. The cost of a house purchase is in the CPI (the fees etc) but not the cost of the house itself.
thanks Unmester, but at no stage did I say the cost of house is in CPI, I specifically said rents and mortgage payments.
Scamp wrote:Interest rates won't fall…
It's a hoax, just like all the spruiker stuff the real estate agents post.Even *IF* RBA lowers interest, the banks will keep rising them anyway,
Scamp, I thought you'd like to read this. Yes, I know…. The other banks won't follow them.
ANZ cuts fixed mortgage rates
http://business.theage.com.au/business/anz-cuts-fixed-mortgage-rates-20080808-3s4w.html
Harp, watch them put the variable up now
http://www.news.com.au/business/money/story/0,25479,24147752-14327,00.html
We are seeing a knee jerk reaction from the ANZ. It is also a responce to the government shaking the finger this morining, as shown here.
http://www.news.com.au/business/money/story/0,25479,24147100-5013952,00.html
of course they would cut the fixed rate, as the market has priced in a rate cut already. why wouldnt they want people to lock in at the top?
crashy wrote:of course they would cut the fixed rate, as the market has priced in a rate cut already. why wouldnt they want people to lock in at the top?It was a smart move, I wonder how many ppl will fall for it and swap over to them.
ummester wrote:Harp, watch them put the variable up nowhttp://www.news.com.au/business/money/story/0,25479,24147752-14327,00.html
We are seeing a knee jerk reaction from the ANZ. It is also a responce to the government shaking the finger this morining, as shown here.
http://www.news.com.au/business/money/story/0,25479,24147100-5013952,00.html
Nah, won't happen. The AUD has gone below 90c so its all over,the smart money has left because the rates are coming down next month. My guess is that by next June we'll be looking at RBA to drop them to 5-5.5% and the AUD to hang around 75c, maybe 80c if India doesn't follow China and slows down as well. By early next year we could even see a property mini boom, at least in the lower end of the market.
harb,
fixed rates change ALL the time, up and down, EVERY WEEK. It's spruiking from the banks.
I was talking about ( I thought everyone realized this ) variable rates. The fixed loans demand in the last few months halve HALVED.
Ofcourse the banks are competing for the fixed loans now, they need to do silly things.8.99% fixed loan interest rate…
8.7% savings account…Can you see the gap closing ? How much lower do you think banks can go , even on fixed rates ?
But again, same happened in the USA. Australia just lags behind 18 months.harb wrote:The AUD has gone below 90c so its all over,the smart money has left because the rates are coming down next month. My guess is that by next June we'll be looking at RBA to drop them to 5-5.5% and the AUD to hang around 75c, maybe 80c if India doesn't follow China and slows down as well. By early next year we could even see a property mini boom, at least in the lower end of the market.You could be right, if you are I'll conceed to your superior market knowledge next June.
I still recon the only way the banks can make their debt back is by continuing to raise rates. Banks don't really care how much property is worth, all they care about are the overall returns they can make. If someone brought a house last year for $400K @ 5.5% and has to sell it to me in 2010 for 250K @ 18%, the bank will still be in front.
We'll see I guess.
Scamp wrote:Ofcourse the banks are competing for the fixed loans now, they need to do silly things.and next month for variables…
So what are you saying Scamp, RBA rate at 2% in 18 months ?
unmester wrote:I still recon the only way the banks can make their debt back is by continuing to raise rates.
What debt ? At the current rates they've probably made up the debt already and are now working on the record profits. Watch them announce a 10%+ increase in profits over the previous year.
harb wrote:What debt ? At the current rates they've probably made up the debt already and are now working on the record profits. Watch them announce a 10%+ increase in profits over the previous year.Have you ever seen this series of videos?
http://www.youtube.com/watch?v=vVkFb26u9g8
I know, it's the American system but the only difference between their banks and ours is that where they can only create debt that equals 9.99x the amount of holdings, Australian banks can create unlimitted debt.
If you can't be bothered watching all the videos, it basically clarifies that banks create debt based on the promise of the borrower to pay it back. That dept creates the percieved amount of money in the system. With most FHB mortgages this is the promise of future wages, with investors I guess it is the promise of capital growth in the investment (however thats occurs).
Australian mortgage debt has been created over recent years in accordance with rapid growth in property capital, which has far exceeded wages and other economic growth. Recently shares have gone backwards, unemployment has increased and property has either stagnated or decreased. Current projections probably show that more has been loaned than what can be paid back.
Banks still turn a profit, any interest rate will see to that (even 0.001%) because, in Australia, they are basically making interest on money that won't exist for around 30 years. Trouble is, alot of the bigger investors have 0-15 years left till retirement, so if housing capital doesn't atleast cover their loans, living and interest the banks will be running at a loss on them as customers.
ummester wrote:I know, it's the American system but the only difference between their banks and ours is that where they can only create debt that equals 9.99x the amount of holdings, Australian banks can create unlimitted debt.
And they can drop the keys to the bank manager and walk away. I guess that if I was a renter over there I would have done the same and took advantage of accommodation below rental market value even if I knew that eventually, when the rates reset from 1% to 12% or whatever, I'd have to walk away. Don't assume that everyone that entered the property market over there was a stupid redneck who got conned into buying a property by some sharp RE agent.
Quote:If you can't be bothered watching all the videos, How did you know that ?Quote:Current projections probably show that more has been loaned than what can be paid back.I don't put much fate in "experts" and their projections but assuming just a lowly 3% a year inflation figure you'd be surprised how much can be paid back over a 20-30 years period.
Quote:Trouble is, alot of the bigger investors have 0-15 years left till retirement, so if housing capital doesn't atleast cover their loans, living and interest the banks will be running at a loss on them as customers.You are forgetting the 2 basic reasons why this will never be the case : the increasing population which puts upward pressure on available land and the increase in building costs which will at least keep up with inflation.
harb wrote:You are forgetting the 2 basic reasons why this will never be the case : the increasing population which puts upward pressure on available land and the increase in building costs which will at least keep up with inflation.Immigration figures are curently overstated, irreguardless – as unemployment goes up immigration will go down. The real pressure will be on the government to convince investors of letting people without jobs into their rentals. The biggest current population increases are babies born to couples who have been putting it off for the last 10 years.
Westpacs rates are definately not going down –
http://www.news.com.au/business/money/story/0,25479,24147797-14327,00.html
ummester wrote:Immigration figures are curently overstated, irreguardless – as unemployment goes up immigration will go down. The real pressure will be on the government to convince investors of letting people without jobs into their rentals.Are you suggesting a conspiracy here ? Its funny how when it comes to the immigration the figure are always overstated but the vacant house figures are understated even when they include developments, holiday homes, places in remote areas and lies from Census cheats.
ummester wrote:Westpacs rates are definately not going down –Really ?
Quote:http://www.news.com.au/business/money/story/0,25479,24147797-14327,00.htmlObviously, there are a number of factors that we have to consider at the time of making a rate move," Westpac chief executive Gail Kelly said.
Ms Kelly said the bank would have to consider its cost of funding, the competitive environment and the effect on its customers.
"Clearly, we would love to pass through the full 25 basis points drop if that were to occur … but we'll need to factor in all of those issues at that time," she said.
Which part of " we would love to pass through the full 25 basis points drop if that were to occur" did you not understand ?
Here is the bit I found interesting , " Although a cut in rates looks a certainty now, maybe as soon as September and by as much as 0.50 per cent, it will only marginally ease the pain."
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