flower-shilling

Has the trouble started?

Smithys Bullion - FINE GOLD AND SILVER
All those interest only loans would've expired by now. Remember them? They were insanely popular from 2014-15 up until the banking royal commission. Then you have the property boom from 2020 til now... Lots of people would be hurting.

You know what I've been looking forward to? Real estate agents being taken down a notch! The honeymoon period is over and many of them need an attitude readjustment.
 
In NZ approx. 25% of mortgages defaulted (missed one or more payments) in the past 12 months.

https://www.stuff.co.nz/business/money/131360625/by-the-numbers-how-430000-people-got-behind-on-their-loans
 
Sadly I long lost any hope that real estate would correct. The demand just continues to grow (see immigration) and banks/gov continue to devise schemes to allow the least qualified to be approved for mortgages. The supply side of the equation will never match up.
 
66rounds said:
Sadly I long lost any hope that real estate would correct. The demand just continues to grow (see immigration) and banks/gov continue to devise schemes to allow the least qualified to be approved for mortgages. The supply side of the equation will never match up.
Click to expand...

I don't think we've ever had such high prices (as a % of income) and high interest rates at the same time. If real-estate demand is connected to credit availability, maybe this time will be different? In fact, I can see a time not far from now where we have excessively high default rates, a liquidity crisis and/or credit freeze, accompanied with a deflationary environment.

'Kicking the can down the road' is just as much a psychological play, a tool, to get even the most financially sensible to become market participants in toxic times. I can't think of a time more toxic than what we're living through right now.
 
STKR said:
66rounds said:
Sadly I long lost any hope that real estate would correct. The demand just continues to grow (see immigration) and banks/gov continue to devise schemes to allow the least qualified to be approved for mortgages. The supply side of the equation will never match up.
Click to expand...

I don't think we've ever had such high prices (as a % of income) and high interest rates at the same time. If real-estate demand is connected to credit availability, maybe this time will be different? In fact, I can see a time not far from now where we have excessively high default rates, a liquidity crisis and/or credit freeze, accompanied with a deflationary environment.

'Kicking the can down the road' is just as much a psychological play, a tool, to get even the most financially sensible to become market participants in toxic times. I can't think of a time more toxic than what we're living through right now.
Click to expand...

A credit crunch would do the trick but I just don?t see it happening. The buck will just be passed on to the taxpayer in some form or another with government guaranteed home loan etc
 
66rounds said:
STKR said:
66rounds said:
Sadly I long lost any hope that real estate would correct. The demand just continues to grow (see immigration) and banks/gov continue to devise schemes to allow the least qualified to be approved for mortgages. The supply side of the equation will never match up.
Click to expand...

I don't think we've ever had such high prices (as a % of income) and high interest rates at the same time. If real-estate demand is connected to credit availability, maybe this time will be different? In fact, I can see a time not far from now where we have excessively high default rates, a liquidity crisis and/or credit freeze, accompanied with a deflationary environment.

'Kicking the can down the road' is just as much a psychological play, a tool, to get even the most financially sensible to become market participants in toxic times. I can't think of a time more toxic than what we're living through right now.
Click to expand...

A credit crunch would do the trick but I just don?t see it happening. The buck will just be passed on to the taxpayer in some form or another with government guaranteed home loan etc
Click to expand...


I can appreciate that position. I just don't see this time as being anything like the rest. Although I don't discount a future increase in prices, there is only so far they can stretch it...and they've already stretched it far enough. People are feeling the pain now and it's only just started.

There are limits to lending and credit availability; and that's loan serviceability. Stagnant wage growth, inflation, high interest rates and the cost of living all come into play here and these things act as a hard ceiling with loan serviceability, which acts as a hard ceiling to retail lending.

They definitely have more tricks up their sleeves but I don't see a government guarantee, or even low interest rates pulling us out this systemic quicksand.
 
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