I couldn't disagree more. But respect your views.
I thought that interest only loans are now available again? "In another blow to household wealth, when interest-only loans become mature they will no longer be offered, resulting in mortgage repayment increases of 30 per cent on average. " I thought that interest only loans are now available again?
Got to agree with Craig James. Recession has been talked about for 18 months now so keep on talking long enough and it will come to pass. Put Labor into government and the economy will surge for 12 months and fall into a large hole - as per Whitlam, Hawke/Keating, Rudd. Our biggest issue is the upcoming generations - those less than 40 - who overcommit themselves with the latest and greatest and "gotta-have-it-now" attitude. That would have been addressed with a credit-squeeze and that is unlikely. The world operates on a different monetary basis from 1990 with Keating's "recession we had to have" so you can't apply that sort of thinking in the current circumstances.
Nice summary of 'where we are at' but blames the wrong entity. Since Monetary Policy does not work, and that's all the Reserve Bank has, the state of the economy is the responsibility of Government, not the Bank.
Yes I’ve seen interest only loans are available again,and the question is why?. If you can’t service a principal and interest repayment then you shouldn’t qualify for a loan. (The same applies in business. You may request a short interest only period at the start in you business but repayment has to commence at some point from cashflow. If you buy a house to live in the same applies.Any loan has to be assessed on ability to REPAY and cover the likelihood of higher interest rates over the loan duration. Repayment can come from the sale of the property but in the first instance it has to be assessed on the borrowers ability to repay any loan from their wages. It’s called prudent and responsible borrowing/lending.
It's good to see we have the new Dr Doom. I'm not sure what happened to the old one who said ....my advice to you is to buy a property in the country where you can grow your own food and a shotgun!...(or something similar). These soothsaying predictions rival the band of pseudo scientists & Chicken Littles in the IPCC who have been predicting the end of the earth for the last 50years, and still refuse to admit their models are wrong for whatever reasons. A year ago everything was rosy and the next rates were up. Lets wait another year before taking this latest pessimissm seriously! I'm with the Reserve Banks decision, look what cheap money has not done for Japan and others, not much. An economy with excessively cheap money will binge on debt and behave like an addict who is threatened with the loss of his drug supply. The government has moved in the right direction in this Budget, with some fiscal stimulus. Cutting interest rates again is crazy.