Comments on: Australia Sees Biggest Surge in Borrowing Since 1980 http://www.dailyreckoning.com.au/borrowing/2008/02/03/ An independent perspective on the Australian and global investment markets Sat, 21 Nov 2009 17:27:32 -0600 http://wordpress.org/?v=2.8 hourly 1 By: christina http://www.dailyreckoning.com.au/borrowing/2008/02/03/comment-page-1/#comment-6579 christina Mon, 04 Feb 2008 14:45:01 +0000 http://www.dailyreckoning.com.au/borrowing/2008/02/03/#comment-6579 Thank yo very much to the person who told me where the message borard is, I appreciate it :-) Thank yo very much to the person who told me where the message borard is, I appreciate it :-)

]]> By: pengers http://www.dailyreckoning.com.au/borrowing/2008/02/03/comment-page-1/#comment-6577 pengers Mon, 04 Feb 2008 09:54:34 +0000 http://www.dailyreckoning.com.au/borrowing/2008/02/03/#comment-6577 I agree Rici - but I think a bigger problem is stamp duty. It is a hugely punitive tax for anybody who is asset rich and income poor (e.g. how many elderly widows are living in a prime four bedroom house). For these people (and I don't blame them) paying $20-50K to downsize is too big a price - so they stay in their big homes with big gardens and big maintenance bills. I would like to see stamp duty abolished and replaced with a general land tax payable by all. This would actually encourage many people to 'trade' to a residence that better suited their needs - in fact they would be encouraged to do so as they would have lower ongoing land tax bills. Free market forces would achieve more than a government inquiry. Cheers, Pengers I agree Rici - but I think a bigger problem is stamp duty.
It is a hugely punitive tax for anybody who is asset rich and income poor (e.g. how many elderly widows are living in a prime four bedroom house). For these people (and I don't blame them) paying $20-50K to downsize is too big a price - so they stay in their big homes with big gardens and big maintenance bills.

I would like to see stamp duty abolished and replaced with a general land tax payable by all. This would actually encourage many people to 'trade' to a residence that better suited their needs - in fact they would be encouraged to do so as they would have lower ongoing land tax bills.
Free market forces would achieve more than a government inquiry.
Cheers,
Pengers

]]> By: Rici Smith http://www.dailyreckoning.com.au/borrowing/2008/02/03/comment-page-1/#comment-6560 Rici Smith Mon, 04 Feb 2008 02:46:39 +0000 http://www.dailyreckoning.com.au/borrowing/2008/02/03/#comment-6560 Simplistic view maybe, but i think its because of government red tape (planning permits, stamp duty etc), the market cannot funtion in an efficient manner. Simplistic view maybe, but i think its because of government red tape (planning permits, stamp duty etc), the market cannot funtion in an efficient manner.

]]> By: Coffee Addict http://www.dailyreckoning.com.au/borrowing/2008/02/03/comment-page-1/#comment-6553 Coffee Addict Mon, 04 Feb 2008 00:34:43 +0000 http://www.dailyreckoning.com.au/borrowing/2008/02/03/#comment-6553 There are few fundumental differences between the US and Australian property markets - except that housing is Australia is less affordable, and the resources boom is preventing a collapse in some centres. Interest rate are going up - because of the resources boom and this will significantly impact default rates. There is of course demand for premium locations, many of which are still occupied by frugal pre-baby boomers. In a nutshell, I expect Aussie interest rates to rise by 0.5% over the next 12 months - and inflation to increase very significantly in the longer term. Politicians can't and won't allow the RBA to fully collapse residential real estate markets. There are few fundumental differences between the US and Australian property markets - except that housing is Australia is less affordable, and the resources boom is preventing a collapse in some centres.

Interest rate are going up - because of the resources boom and this will significantly impact default rates.

There is of course demand for premium locations, many of which are still occupied by frugal pre-baby boomers.

In a nutshell, I expect Aussie interest rates to rise by 0.5% over the next 12 months - and inflation to increase very significantly in the longer term. Politicians can't and won't allow the RBA to fully collapse residential real estate markets.

]]> By: Dom http://www.dailyreckoning.com.au/borrowing/2008/02/03/comment-page-1/#comment-6551 Dom Mon, 04 Feb 2008 00:20:02 +0000 http://www.dailyreckoning.com.au/borrowing/2008/02/03/#comment-6551 I too would like to buy a small house - people are crazy paying the prices at the moment - house speculation and negative gearing rort! i hope they jack interest rates thru the roof! I too would like to buy a small house - people are crazy paying the prices at the moment - house speculation and negative gearing rort!

i hope they jack interest rates thru the roof!

]]> By: mojohand http://www.dailyreckoning.com.au/borrowing/2008/02/03/comment-page-1/#comment-6549 mojohand Sun, 03 Feb 2008 22:46:12 +0000 http://www.dailyreckoning.com.au/borrowing/2008/02/03/#comment-6549 forum is here christina http://www.dailyreckoning.com.au/talk/ forum is here christina

http://www.dailyreckoning.com.au/talk/

]]> By: Mr_Clean http://www.dailyreckoning.com.au/borrowing/2008/02/03/comment-page-1/#comment-6548 Mr_Clean Sun, 03 Feb 2008 22:35:54 +0000 http://www.dailyreckoning.com.au/borrowing/2008/02/03/#comment-6548 Yes agree with above. I have been watching the UK debt, housing markets and the similarities are striking. Even the London housing market is "crashing" at this moment. It seems to me the only argument to counter this in Aus is resource exports to China. But even the Chinese economy seems to be slowing. So the million dollar question is where is the money to support the ever increasing house prices in Aus coming from, and when will in it run out ? Yes agree with above. I have been watching the UK debt, housing markets and the similarities are striking. Even the London housing market is "crashing" at this moment. It seems to me the only argument to counter this in Aus is resource exports to China. But even the Chinese economy seems to be slowing. So the million dollar question is where is the money to support the ever increasing house prices in Aus coming from, and when will in it run out ?

]]> By: Frank Grimes http://www.dailyreckoning.com.au/borrowing/2008/02/03/comment-page-1/#comment-6545 Frank Grimes Sun, 03 Feb 2008 21:27:59 +0000 http://www.dailyreckoning.com.au/borrowing/2008/02/03/#comment-6545 All I ask is who is coming up with the ever larger sums of money to pay the inflated house prices plaguing all of Australia? Mining company execs and employees must own the equivalent of small cities' worth of property! But jokes aside, it really looks like the "greater fool" policy is hitting Australian housing in a big way. How long until the greatest fool can't make the repayments? All I ask is who is coming up with the ever larger sums of money to pay the inflated house prices plaguing all of Australia? Mining company execs and employees must own the equivalent of small cities' worth of property! But jokes aside, it really looks like the "greater fool" policy is hitting Australian housing in a big way. How long until the greatest fool can't make the repayments?

]]> By: christina http://www.dailyreckoning.com.au/borrowing/2008/02/03/comment-page-1/#comment-6541 christina Sun, 03 Feb 2008 14:02:58 +0000 http://www.dailyreckoning.com.au/borrowing/2008/02/03/#comment-6541 Hello there, how do we get to the messageboard? :-) Hello there, how do we get to the messageboard? :-)

]]> By: Cluster http://www.dailyreckoning.com.au/borrowing/2008/02/03/comment-page-1/#comment-6540 Cluster Sun, 03 Feb 2008 13:30:36 +0000 http://www.dailyreckoning.com.au/borrowing/2008/02/03/#comment-6540 Local governments and councils are addicted to high real estate prices in Australia. They will do everything to prevent deflation. Why? Because of the ever increasing tax revenue collected from new and existing houses. Council fees are calculated from the every person's property value. Regardless of whether a person sells or not they have to pay more. Deflation in housing prices means less taxes. Can't have that. I would like to buy a house but prices have just recorded another 20% jump in my home city. Wages are not growing anywhere near that amount, so every buyer seems to be taking out ever larger mortgages. Therefore, I have to too even though I'm averse to huge debt. Since incomes are growing much slower than housing costs, it's logical that the pool of buyers able to service ever larger home loans must be shrinking. It's illogical for home owners to believe that house prices will keep rising forever at anywhere near the current pace. Local governments and councils are addicted to high real estate prices in Australia. They will do everything to prevent deflation. Why? Because of the ever increasing tax revenue collected from new and existing houses. Council fees are calculated from the every person's property value. Regardless of whether a person sells or not they have to pay more. Deflation in housing prices means less taxes. Can't have that.

I would like to buy a house but prices have just recorded another 20% jump in my home city. Wages are not growing anywhere near that amount, so every buyer seems to be taking out ever larger mortgages. Therefore, I have to too even though I'm averse to huge debt.

Since incomes are growing much slower than housing costs, it's logical that the pool of buyers able to service ever larger home loans must be shrinking. It's illogical for home owners to believe that house prices will keep rising forever at anywhere near the current pace.

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