Will the RBA help house prices?
Steven Majewski wrote:
Falling interest rates indicate a economy in trouble and faltering, not one that is going well, so exactly how will then house prices start to increase.
Interest rates can be close to zero but just like in the US if you don’t have a job then they mean nothing. We are starting to see signs of job losses here with the banks also now indicating more on the way. (Will the RBA help house prices?, January 17)
17 Jan 2012 1:26 PM
Mato Sauce wrote:
How can you discuss the surge in FHBs without also referencing the end of stamp duty concessions? do you draw a distinction between finance for new purchases and refinancing existing loans? (Will the RBA help house prices?, January 17.)
17 Jan 2012 1:31 PM
Daniel Gardiner wrote:
You say home owners will be wishing for more gifts but surely you mean mortgage holders? (Will the RBA help house prices?, January 17.) I might own a home outright and have cash in the bank. only about 25-30 per cent of people have a mortgage. Seems silly to give so much assistance to what is simply another asset class to win a few votes. We need in Australia to get into our heads it is just another asset class and we need to get rid of silly tax breaks like negative gearing.
17 Jan 2012 1:38 PM
Bruce Meaney wrote:
I found your contribution about banking valid Chris (in that bank margins are most likely quite healthy,unlike what they tell us) but why would we want to “barrack” house prices up (Will the RBA help house prices?, January 17)?
I think Aussie house prices are still too dear (even following a recent correction). what we need is several more years of sideways movement on house prices so that we regain value, without a monumental collapse. We don’t need any increase in house prices…not for a few years.
17 Jan 2012 1:48 PM
Arkadi Rokotov wrote:
Chris, can you please post original along with your “seasonally adjusted” charts in your articles. (Will the RBA help house prices?, January 17)
17 Jan 2012 2:32 PM
Michael Russell wrote:
“Help” house prices (Will the RBA help house prices?, January 17)?
I think Australian housing is disgracefully overvalued. how would making them even more ridiculously priced help? Helpful would be to dramatically improve affordability so stop housing finance constantly sucking so much air from the rest of the economy.
I’d say the net yield on residential property in both units and houses across the land is pathetically low. To get to similar valuation multiples of other asset classes either prices will have to move dramatically lower or rents will have to hike very significantly.
17 Jan 2012 3:24 PM
Michael Franz wrote:
I think your talents are wasted in this country Chris, far better for you to be advising the Japanese and German governments over their property markets which have been falling for years now. Obviously all those manufacturing jobs exporting masses of quality products is having a dire effect. maybe if the people in these countries couldn’t afford a house to live in and their banks hugely increased their mortgage lending by lowering their LVRs then things would improve (Will the RBA help house prices? Janaury 17).
17 Jan 2012 4:01 PM
Leith van Onselen wrote:
In Chris’ first chart, I would contend he has wrongly included refinancings (Will the RBA help house prices?, January 17). when these are stripped out, finance commitments for the purchase of established dwellings are running near decade lows – hardly a bullish indicator. He has also failed to mention that the surge in FHBs is on the back of a sharp rise in NSW, where FHBs have likely rushed to buy in order to beat the 30 December 2011 expiry of stamp duty concessions on pre-existing dwellings.
17 Jan 2012 4:26 PM
Chris Joye wrote:
Sorry Leith (4:26 PM) but you are wrong. The series in the chart is the *purchase* of established dwellings housing finance data. If you are purchasing/buying a home, you are, by definition, not refinancing. You seem to be confused between the two (Will the RBA help house prices?, January 17).
17 Jan 2012 5:36 PM
Ken Mortensen wrote:
Daniel (January 17, 1.38pm): Negative gearing allows middle class income earners, who carry the bulk of the country’s tax burden, to speculate and provide dwelling at reasonable rent. To level the playing field, either banish negative and capital gains tax or introduce negative gearing on the family home (Will the RBA help house prices?, January 17).
17 Jan 2012 10:36 PM
Cameron Murray wrote:
CJ, Leith appears to be correct on this one (Will the RBA help house prices?, January 17). in Table 1 of ABS 5609.0 the spreadsheet has a comment noting that the purchase of established dwellings series includes refinancing.
That is why it was so important for the ABS to derive a series the excludes refinancing (which began in 1991).
If you take the ex-refi measure you will also find that NSW is responsible for all recent gains, and yes, there is a FHB stamp duty concession at play in that state.
And I also love you tactful treatment of alternative views – “Coupled with low rental vacancy rates, only a dissembling imbecile would have us believe that Australia’s housing market is characterised by significant excess supply.”
I guess you haven’t heard about glut in many areas http://bit.ly/yBqvvX , nor that rents in Brisbane and Melbourne have not been keeping pace with inflation for two years.
17 Jan 2012 10:49 PM
Ben Stewart wrote:
I just can’t seem to get my head around Chris’s arguments. To me, interest rates are reduced when an economy is deteriorating and job losses are mounting – how does this lead to an increase in already overvalued house prices? (Will the RBA help house prices?, January 17.) History even shows that periods of decreasing interest rates correspond to period of decreasing house prices – so why will this time be any different?
18 Jan 2012 8:48 AM
Bruce Wang wrote:
LVO and Murray seem to misunderstand how the ABS use the term refinancing (Will the RBA help house prices?, January 18). The ABS only include so-called refinancing when someone moves. Obviously such loans need to be included when they involve the purchase of a house. The ABS do not anywhere include changes to existing loans in their refinancing figures. The totals Chris has used are loan for “purchase”, even if they involve refinancing. It is wrong to exclude such loans as LVO and Murray do.
http://www.abs.gov.au/ausstats/abs@.nsf/90a12181d877a6a6ca2568b5007b861c/b9d186beb573ab28ca256fea0079b472!OpenDocument
18 Jan 2012 11:47 AM
Matt Cooper wrote:
Chris, have you read Alans “Lights out on a jobs bonanza”? (Will the RBA help house prices?, January 18) Here you say about new loans “which is good news for the banks that rely on credit growth to generate profits”, yet Alan talks about a large reduction in lending growth and the stable mortgage repayments through interest rate cuts further eroding bank profits, which is it?
Also, I’ll put my hand up as a “dissembling destructionista”. when I go for a walk at night through a suburb
<a href="http://www.businessspectator.com.au/bs.nsf/Article/house-prices-interest-rates-RBA-euro-debt-crisis-p-pd20120117-QL2FC?OpenDocument&src=sphtag:news.google.com,2005:cluster=http://www.businessspectator.com.au/bs.nsf/Article/house-prices-interest-rates-RBA-euro-debt-crisis-p-pd20120117-QL2FC?OpenDocument”>Will the RBA help house prices?
Tags: banks, mato, mortgage holders, signs
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