Mortgage holders struggle as banks rake in billions | 60 Minutes Australia
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- Опубліковано 11 лис 2023
- In November 2023, the Reserve Bank of Australia (RBA) raised the official cash rate to 4.35% - sparking the 13th interest rate rise in the last 18 months - hitting mortgage holders hard and impacting real estate across the country.
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Synopsis | Unlucky 13th (2023)
Australians with a mortgage copped another crippling cost of living hit on Tuesday when the Reserve Bank raised the official cash rate to 4.35%. It’s the 13th interest rate rise in the last 18 months and means many people will now have to become magicians and conjure up money they don’t have if they’re to avoid defaulting on their home loans. Cruelly, the rate rise came in the same week as two of the four major banks announced enormous profits. Westpac and NAB made more than seven billion dollars each. As Tom Steinfort reports, the current state of Australia’s economy raises many questions, but perhaps the most important is how much more pain can mortgage holders endure?
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I remember in 2007 when I was working in real estate seeing people buy homes new from builders with the intention of selling before close of escrow to a new buyer for profit. The crash was so brutal and fast that I remember seeing a lot of these units foreclosed on with the builder plastic still on the carpet.
Most people find it difficult to deal with a fall since they are accustomed to bull markets, but if you know where to search and what to do, you can earn a lot of money. Yes, depending on how you enter and exit.
Given our lack of experience with such turbulent markets, the fact that the US stock market has been on its longest bull run in history helps to explain the widespread dread and excitement. There are opportunities if you know where to look, as you noted when I earned almost $780k in the previous ten months. I hired a portfolio advisor because I knew I'd need a sound strategy to get through these trying times.
Yes, Stacey Laura Alviani made headlines in 2020, but I'm not sure if I can bring her up in this context. She manages my portfolio and acts as a counselor for me.
Thomas-Government Covid lockdowns caused inflation+6.3% mortgages. 50% of all housing is State Government “lifetime” GST and Stamp Duty. pure and simple fact. Investors, Banks, Young or old people tenants & even speculators are all victims of Government’s 50% lifetime taxes.
@@danieljackson87 Wow! I looked up Stacey’s complete name online just out of curiosity and was pleasantly surprised by her credentials. Thank you for sharing.
Back 23 years ago I bought a Florida home for $115,000 and interest rates were 8%. Today new mortgage rates are 8% and the same home costs $600,000. The neighborhood incomes did not increase 500 percent.
Life is fked for anyone that wants a home now
Your home did not increase in price in general, there's just more money printed making your florida home increase its value.
Exactly. @@jonos4151
@@jonos4151Exactly. Money has lost its value.
@@jonos4151incorrect. If more money is “printed” the value of that same currency decreases proportionately.
Step 1: stop donating money to countries that hate you
IMO - and don't let those people buy up property in your country, either.
The typical ignorant comment …. Dear sir Mr white man … since when in the history of time has the white man or the white country ever given money to anyone or any country ?? Do you even understand how the world works ? It’s the white man getting richer on the back of other countries … now the fact that your rich white elites are making you fellow whites poorer has nothing to do with “ donating money “ what does a country like Australia even “ donate “ ? I’m very sure many people hate you … but I’m even more sure that you give no money to anyone … just stop sucking money out of other races and the world will be a better place 😊
Dumb comments
Has nothing to do with inflation.
Why do you say that?
In Australia and the USA look back to the 1960s and see how the 20 something year olds supported families lived on one income owning a home, car, vacations, support kids and probably a dog in the burbs. In the 1970's inflation and central bank government money counterfeiting put an end to it. Can a 25 year old support 5 people the same way today? If not then we have gone backwards.
It’s cause of globalization buddy
we have
@@kaseyc5078 Its more than this , its greed also.
It's more than this, its sex also.@@invaderzimie
Can your average 25 year old get a well paying job now that the likes of Australia and the USA have shipped them all off shore? Can a 25 year old buy a house for 2.5 times their average salary, now that governments, globally, have commodified housing in order to cover the gap left behind by the manufacturing sector?
I like how this story doesn't even mention the high cost of food at the supermarkets not falling, record profits for banks or the insane level of migration that is driving demand for rentals.
A small basket of food only making a couple of meals has been costing me $80 a Woolies recently. meanwhile Coles and Woolies post record profits. They need to be investigated.
@@MrBibi86no investigation needed… they are gouging everyone and staff are being worked to the bone, what staff they have left anyway.. the entire system is breaking with capitalist greed
Or the fact that the new Governor had no choice but to raise to not appear weak under the Government's pressure.
Three quarters of a million people penciled in for the next 12 months.
@@MH_347 I completely agree it is high but there’s a bigger picture here. Without a rapidly expanding tax base either through births or immigration the Ponzi scheme that is most capitalist countries fall over.
Where the failing in my opinion actually is, is that governments of all ilks have failed to keep up with affordable, no frills housing. Bring back the government houses, simple 4 room with 1 bathroom mass builds of the middle of last century.
Very few people can afford to have children now even with both parents working and yet the only way to have both workers and a tax base large enough to support the older generations that are live longer than ever is to attract immigrants..
We feel you. Same thing in South Africa, food prices soaring, fuel is insane and general cost of living is nearly impossible.
US is suffering the same conditions under the Biden administration. Their goal is to destroy our country and it’s devastating to our citizens. Bless you!
If you are middle class you're actually better off here because you can still qualify for a mortgage.
Way things are going it would be financial crisis to take on a montage... @@gregbester3855
Lol I thought Africa had a massive food crisis how is south Africa only feeling the pinch now ..... corruption
Same situation in New Zealand 😢😡
60 Minutes should be more balanced in its coverage. What about more mention about how inflation is robbing the poor (those who can't even afford a roof over their head) of a basic living?
I do agree
100%. Inflation must be dealt with.
They have covered that. This particular episode is about mortgage holders.
it costs me $80 for a small basket of food and essentials at woolies at the moment and I'm on A Disability Pension. supermarkets are robbing us blind also. it's going to get to the stage where people will take their own lives. the world's economy is a sick joke
and I'm wondering if rents will go back down when interest rates do.
Mortgage rates are currently at an all time high since 2000(23 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market
Piease get your facts right I bought a house 2007 rates kept on going up my interest rate was over 7 percent. A lot of people like myself fixed our mortgage thankfully mine was only 3 years then the crash happened many people were stuck with high interest rate
You are talking about American interest rates. I think not Australian.
The stock market is no different, to maintain profit, you need to have some in-depth knowledge on the market
True, I mostly just buy and hold stocks, but my portfolio has been mostly in the red for quite awhile now. Unfortunately to be able to make good gains, you’ll need to be consistent and restructure your portfolio frequently.
in my opinion, it was much easier investing back in the 60s but it’s a lot trickier now, those making consistent profit in these times are professionals reason I’ve been using an advisor for the past 5 years to consistently build my portfolio in preparations for retirement.
Greed. This planned all over the world.
You mean capitalism
100 percent thank the far rights then the lefts that supported it!!! Sick
Not once did they suggest that prices are too high! And they never once said that people paid too much for houses....
Exactly, noobs
Excalty Nelly
And she budgeted with her boyfriend's income in mind.
Nelly-great observation-Government Covid lockdowns caused inflation+6.3% mortgages. 50% of all housing is State Government “lifetime” GST and Stamp Duty. pure and simple fact. Investors, Banks, Young or old people tenants & even speculators are all victims of Government’s 50% lifetime taxes.
Rates shouldn’t have gone to zero period.
Don't think many people understand this tbh.
Agree
I was expecting them to go negative.
Absolutely, they never should have gone as low as they did
Australia is really making it difficult for it's citizens and immigrants are under paid as well. Resettlement is on the high side with many of our skilful Aussies leaving the country to practice in other countries. We need to make the government understand that we're going through a lot. You can't have a house on mortgage and work one job here in Australia.
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Even with this last crypto crash, the market has been pretty rough until it decided to rally. Everyone was practically crying then but it kept dipping. That's what you get when you feel like you can navigate the process on your own. Many thanks to Owen Arthur. I am not worried about how bad the market is because my assets are insured due to his advice and I still receive my profits.
After a long search for a professional trader with consistency combined with good profits, I often come across Owen and his exploits in the trading world, but I have no idea how to contact him
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I'll like to know how I can start already I've a lot to do with money
YEP ! We're going to water front Mexico for 160k. DONE WITH THIS SOCIALIST SHTHOLE.
Mortgage rates are currently at an all time high since 2000 based on statistics on inflation, we might see that number skyrocket further, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market
The stock market is no different, to maintain profit, you need to have some in-depth knowledge on the market. I mostly just buy and hold stocks, but my portfolio has been mostly in the red for quite awhile now. Unfortunately to be able to make good gains, you’ll need to be consistent and restructure your portfolio frequently.
In my opinion, it was much easier investing back in the 80s but it’s a lot trickier now, those making consistent profit in these times are professionals reason I’ve been using an advisor for the past 5 years to consistently build my portfolio in preparations for retirement.
@@ThomasChai05 My partner’s been considering going the same route, could you share more info please on the advisor that guides you.
"Camille Alicia Garcia" is my adviser and she is highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further.
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It is just plain disgusting to see the big 4 banks have high profits but all the people are suffering on high interest mortgage. Also, why the government keep intaking new migrants when our housing supply is so tight
It's how the system works, if USA fed increase the interest rate, Australia's RBA need to follow. Australia need to repay its debt in USD. System needs to change, the more money the USA FEDS prints the higher the inflation, because to transact internationally, you need $US dollar, no one will accept AUD.
and the supermarkets are posting record profits whilst people making $70k-$80k a year are having to use foodbank services. imagine what pensioners are dealing at the moment
So the migrants get blamed for all the problems 😡.
Apparently@@Prince077Aussie
Late stage capitalism.. the experiment hasn't worked
I remember when variable rate loans were introduced to the masses. I was shocked that anyone would accept a bit cheaper loan for the risk of slowly being sucked under financially. And yet it became a thing. Variable rate loans ensure the lender pushes max risk on the borrower. Fixed rate loans share the risk. More economic rich/poor imbalance.
IMO - Those variable rates should be illegal.
I think in 80% of cases a variable rate loan will save you money. The banks are not stupid, and they put the fixed rate so high that they will normally earn on it - in the end they are running a business and they have insider information that we normal people don't have. Also, at least where I live, you normally only get a couple of years fixed rate, when that ends you get it "renegotiated", which doesn't mean a negotiation but a new take-it-or-leave it offer from the bank.
IMO - Fixed loan are common in the States. At one time I resided in Australia, and remember the variable rates scheme well. They are a nightmare: no sense of security.
Rubbish.. you walk in and you can choose fixed or variable or a mix...Did someone put a gun to anyones head? Take responsibility for your own actions.. ==> Central Bank governor should have been sacked .. I knew rates were about to go up.. inflation etc rising everywhere... and he's telling them to buy houses, that everything is fine.... Disgusting
heres something you maybe dont know... fractional reserve banking... you put 10,000 into the banking system and they make loans up to 100,000 on that 10,000 .. they in other words.. create 90,0000 out of nothing and charge interest on it... so 10,000 goes in and they get 5,000 interest or so on it... people don;t know how the game works... conclusion... own an bank.. also if you get in trouble you will pri=obabkly get bailed out to... not like the peeps who bought at the peak.... game is always stacked against the nobodies
Australia: The biggest real estate bubble in the Globe!
The result of the government propping up property prices at all costs
@@dim2389 and where do you think the demand has come from over the past quarter?
Anyone building a 1 million dollar property in Victoria pays nearly 39% on charges,fees,taxes to the government. Thats why proprty is so expensive
@@theoskalt-rf1td And real estate agents are saying that 100% of the Toorak property buyers over the past 6 months have been from China, sometimes paying in Cash, sometimes paying millions over price to secure the property.
When China investors become interested in buying AU property (happening now), its game over for the AU citizens. There are more millionaires in China then there are people in Australia, they can buy up everything and the AU government is encouraging it. In the meantime the group making such decisions are amongst the largest property holders per capita in the country and are seeing not only their property values go up, but also the return on their rents...
Government Covid lockdowns caused inflation+6.3% mortgages. 50% of all housing is State Government “lifetime” GST and Stamp Duty. pure and simple fact. Investors, Banks, Young or old people tenants & even speculators are all victims of Government’s 50% lifetime taxes.
@@theoskalt-rf1td-you’re right-Government Covid lockdowns caused inflation+6.3% mortgages. 50% of all housing is State Government “lifetime” GST and Stamp Duty. pure and simple fact. Investors, Banks, Young or old people tenants & even speculators are all victims of Government’s 50% lifetime taxes.
The current condition in the world seem to be surviving and not thriving.
The problem was holding rates so low for so long. This shot the asset prices so high that small changes in interest are magnified. We should have raised rates much much sooner. For years we incentivized taking huge levels of debt and punished anyone saving. This is the situation we have created and there isn’t an easy way out
Whatever party or force that let it get so low for so long should be made accountable this could have been avoided.
Yeah and on top of that look at debt to GDP ratios around the world. Government is drunk on spending and wants to blame the taxpayers.. We are screwed and there will austerity measures through out the world including Australia.
Yes. All we are seeing people saying that interest rates have never been this high. No! It only went back to normal now. What was abnormal was almost two decades of near zero interest rates which led to too much debt piling up.
You do realise if they kept the rates up at 5% the banks in the U.S and most of the world would of collapsed
I hope next time when they need to drop rates, do NOT drop too much as money should have time value so normal interest rate should be right around 4%. Any rate lower than that would cause too much inflation to real estate and bubbles for other assets as well. Lower rate is a poison which lure people to buy something they really can NOT afford.
I just did some quick research and found out that most mortgages in Australia have a fixed rate period of 1 to 3 years, which is very from different from their American counterparts where 30 year is common. It's rough for our friends in Australia.
Mine was fixed for 0 years, costing a pretty penny. In fact my entire salary goes into repayments. 50% of that is only going into the increased interest deductions. (Even if the minimum deduction amount didn't double - this is the real cost)
Thank you for that info. I'm not Australian, and I couldn't understand why the rates would change. This is a horrible system!
I appreciate you and your content < Technical Analysis is good but I find It truly baffling that major crypto you-tubers just look mostly at pure T.A and completely ignore the bigger narrative of why BTC is pumps/pumped and why the future outlook will be even rosier than it seems. It's kinda irresponsible to ignore the fact that each ETF launch so far has caused a major dump at the peaks of BTC. We were already on shaky footing with historically low volume and almost pure whale pumps, narrowly avoiding a long-term bear market. More emphasis should be put into day trading as it is less affected by the unpredictable nature of the market. I have made over 14 btc from day trading with KERRIE FARRELL insights and charts. She has been one step ahead of other analysis...
That has been a lesson for eternity! Do not buy a house or condo with a boyfriend!! As when they may leave you will be left with the payment…
The homeownership delusion. You don't own the home if you are still paying mortgage.
Maybe not at first, but you own any equity that the house accrues.
@@smileygladhands If it accrues.
You never truly own a home at all. Once the mortgage is paid off you then rent it from the Welfare State via property tax obligations. Don't pay your property taxes then the government takes your home. Home ownership is an illusion.
Equity is what you own...
@@LeedawG766 If the government can take it by force of law then you own nothing. The idea of equity is also part of the illusion. Get rid of the property tax scheme, insure that your home cannot be taken from you because of back taxes, then you will truly own your home. Until that day, the government and Welfare State are the true landlords.
I'm originally from Venezuela, one of the countries with the worst inflation, if not the worst, and we have never cared about interest rates. ever! what does that tell you? Petrol prices do not depend on interest rates, nor do the cost of imported goods. Raising interest rates to stop inflation does not work when you cannot control the actual prices of goods and services in a globalized world. That's just my opinion
So the former exec at the RBA is now chief economist at Westpac where they made 8 billion $ in profit since the rate rises, and no one thinks this is a conflict of interest?
Its brutal to the Australian citizens. Inflation has nothing to do with this.
Why did he only mention westpac and NAB's record profits? CBA had by far the biggest record profit!
The CEO of the CBA Matt Comyn made 10.4 million last financial year, that's 200,000 a week while notices to vacate have been at an all time high. How is that legal!
How can they raise the rate once the loan is closed? That makes absolutely no sense in this country would be illegal.
The norm in Australia are variable rate mortgages, fixed rate mortgages are much less common, but the fixed rate period is between 1-5 years. After which, unless you renegotiate the mortgage for another fixed rate term, it becomes a variable rate.
"Big Banks hates little banks "- Two Chains
😮 Banks dont have to run all the way to bank after they have robbed you since they own you !
I have had my initial and second mortgage bought and sold multiple times. I no longer know who I owe money to? I started with a local bank, that tried to screw me during the buying process of my farm, and it has been an on going fight! Corporate Greed.
Community banks are no different from big banks when it comes to stealing. I had bad experience with on my car loan too.
There’s another side to the story. For every person the govt helped buy a house, the person who would have bought it, didn’t. That’s me. Slashed my expenses, working 3 jobs, saving 60-70% of income - I’ll be coming for your house.
so long as you're having fun.
I cant feel sorry for homeowners buying into this bubble . sorry guys
They buy in bubbles. Under duress. For a place to live.
How can there be a recession when the banks are posting record profits?
There's never any recession when you are rich they get richer and working class get poorer. Banks love debt by lenders.
"Record Profits" make great headlines. But when you consider the volume of trade that banks do and the fact that those profits get distributed amongst millions of shareholders, including superannuation funds, it's pretty much sensationalism, and nothing else.
Ask the banks 5o repay to the people. Those people in RBA can own stocks in the 4 banks and keep raising interest rates. Its brutal.
The Covid credit card 💳 did everyone forget that it was due ?
Keep raising rates RBA. The Sydney property market, for example, has doubled 2 times in the last 15to 20 years. Over inflated prices need correcting
thank boomers and chinese kleptocrats.
Foreign ownership should be banned.
The idea that the big banks are getting richer off of high interest rates because the working class is struggling to make payments is irritating. The wealthy doesn't need the extra income, it's excess.
I agree with you. People are struggling. The banks a crooks. They put the interest rates up higher then the Reserved bank. People in rentals are struggling also to get housing. They should tax big companies more and stop interest rates rising. If people spend more at Christmas it will also make inflation rise.
also in my country its the same. everybody bought when rate was low and now interest rate goes up and ppl who leveraged are screwed
Its interesting how people just forget about this thing and they repeat over and over again. Would think that people learned something from US housing market crash that caused the Great recession 15 years ago. But no... lets repeat the same mistakes again
The problem is not the rate rises. The problem is the ridiculous rates for the past 13 years. People are going to lose their homes. People are going to lose their retirements. People are going to lose their investments. People will now learn leverage is not free.
When you are winning at the black jack table you never want to walk away. Greed is not good.
People will finally learn that investments carry risk.
Just goes to show that the Australian government, all governments around the world, need to be held more accountable for not keeping banks, supermarkets, etc, in check. These large corporations have been allowed to bleed us dry to achieve their massive profits, seemingly because these big corporations make the majority of political donations. What would fix this systemic issue would be to make it illegal for corporations to make political donations, however, in our current political framework, this would not be possible even though it would fix so many issues in our societies.
For eg private medical insurance is a joke on all citizens. They know the politicians are for sale and no one will intervene to enforce refinements and ensure private hospitals and private insurance are better put up for all use so that the general system is not chocked... bit none as these biggies may just give enough to keep quiet
Bianca-Government Covid lockdowns caused inflation+6.3% mortgages. 50% of all housing is State Government “lifetime” GST and Stamp Duty. pure and simple fact. Investors, Banks, Young or old people tenants & even speculators are all victims of Government’s 50% lifetime taxes.
The government’s are run by the big banks it’s been happening for years now, nothing is going to change unless you get a revolution.
Lady, 3 jobs, 7 days????
Ummm...
Sell it. Reset.
Are we blaming banks for RE investors over leveraging themselves?
It's quite fashionable, at the moment.
The Worse is yet to Come !
The recession in many countries is self inflicted. The interest rate increases are crushing mortgage holders everywhere. Yet a lot of the inflation was caused by supply chain issues for food and fuel that was caused or worsened by COVID. The rate of increases should have been much slower.
They are crushing renters also. because home owners renting out their properties are passing all the pain onto their tenants
Poor immigration policy which demonstrates ignorance as to the effects on housing are also a big deal
A lot of the inflation we are seeing now is due to corporate profits.
Government Covid lockdowns caused inflation+6.3% mortgages. 50% of all housing is State Government “lifetime” GST and Stamp Duty. pure and simple fact. Investors, Banks, Young or old people tenants & even speculators are all victims of Government’s 50% lifetime taxes.
A million dollar fibro somewhere in Sydney, you could see the debt trap a mile away
These storey’s annoy me, interest rates aren’t high. They have more to go before being normal. Sorry to anyone going through a difficult time but if you took a loan not allowing for 8 or 9% interest rates then you were ill informed or reckless. Inflation isn’t stopping anytime soon.
Keep raising interest rates till i can afford a home.
Now do a sob story on how much interest savers have lost over the last decade on their savings when banks dropped rates by over 90%.
In the 90s When I left school and earned a income I brought a house instead of overseas holidays. I had to put 30% deposit. back then was difficult but now is totally financial madness.
Good on You Greg-the difference now is Government Covid lockdowns caused inflation+6.3% mortgages. 50% of all housing is State Government “lifetime” GST and Stamp Duty. pure and simple fact. Investors, Banks, Young or old people tenants & even speculators are all victims of Government’s 50% lifetime taxes.
Whose fault is it if people make a conscious calculated decision to take out a 30 year mortgage and buy a property?
The cash rate is almost approaching normal.
People jumped in and borrowed virtually free money when the cash rate was 0.1%
We are already in a per capita recession. Recessions are a natural part of economic cycles.
Koukoulas has been repeatedly and consistently wrong about the direction of interest rates for the past 15 months. Last year he said the cash rate would peak at 3.1%.
Women from video took a long term housing mortgage, but didnt even had a short term relationship with her boyfriend... and then it is central banks fault
@Beliefish Exactly...people followed everyone else like sheep getting loans through fomo, not putting any focus at all at the inevitable inflation post covid stimulus hangover, the global geopolitical climate back then with russia and ukraine kicking off, and Chinas benevolence...Throw in any other potential black swan event such as cyber warfare, natural disaster (drought impending in oz). It was always a high likelyhood of higher interest rates, just everyone loves to keep their head in the sand, and recite houses only ever go up! We'll see for how long...
its an investment and all investments carry risks. If people took out far too large mortgages and their investment isn't working out for them tough luck. Any other investment you'd know there's an inherent risk. You are not entitled to just grab a mortgage. Do you research and actually make informed, smart financial decisions with ALL investments mortgages included
But the rate on savings and term deposit have not increased at that rate. Absolutely ridiculous!
Interesting that, @60 minutes Australia has kept comments open for this article. Also interesting is how they are in a very subtle way, shifting the blame on RBA and banks.
Good observation Neil, also Government Covid lockdowns caused inflation+6.3% mortgages. 50% of all housing is State Government “lifetime” GST and Stamp Duty. pure and simple fact. Investors, Banks, Young or old people tenants & even speculators are all victims of Government’s 50% lifetime taxes.
This is Why People Trust in Politicians and Government!
#sarcasm
These people borrowed too much money, the record low interest rates were never going to last forever
Investors sent stocks soaring on Tuesday, cheering the October Consumer Price Index report that showed inflation slowed more than expected last month.What is the greatest strategy to take advantage of the current bull market while I'm still deciding whether to sell my $300k worth of stocks?
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They were too low for too long. We managed to keep inflation at bay by importing cheap stuff through globalization process, but this era is ending and boomers are retiring, raising the cost of capital. It's a good thing overall, low interest rates caused the assets to increase at crazy levels, which exacerbated the wealth gap. You can't get prosperous when speculating is the way to make money.
House will simply drop in value so that monthly payments comes back to what they were before. There will be bag holders.
We do not have the supply to warrant the price of housing to drop.
Prices have not dropped and they will not drop. They will only rise.
Whatever party or force that let it get so low for so long should be made accountable this could have been avoided.
House prices won't drop in the midst of plague immigration.
@@phaedruslykos3249All by design...
Till there are sheeps there would be wool.
@@zappy7393 Adding international students into the "demand" was a story made up to artifically inflate the house prices. Students account for the majority of the increase in immigration after covid. Students who were studying remotely during covid have come onshore, concentrating the immigration head count of 3 years into 1 year. However students don't usually buy houses, let alone they are legally obliged to sell any houses they own when they run out of their visa and have to leave Australia.
What about corporate price gouging which is really causing inflation?
I think they have to do that otherwise they would loss the value of debt they gave through inflation
After 46 years of living in Australia, I am amazed when I see an Aussie instead of crying they laugh!
Variable rate mortgages are dangerous. In the US after 2008 housing crisis a lot of new regulations came out warning the buyers about the risks of variable interest rates. I wish the whole world had established the same warnings before someone signs on a VR loan.
The US is the only country in the world that has fixed rate mortgages for the life of the loan. Other countries only offer fixed rates for a short period of the loan. Yet it was the US that was the originator of the GFC, due to the way they were doing their mortgages... So, no, doing things the way the US does is not a wise move... (and yes, I realise it was not interest rates that caused the GFC, but still, following a country that got housing finance so wrong, so badly, is not the way to go.)
@@db7084 So what would you suggest? (no sarcasm) Having a mortgage that is a moving target is not conducive to a stable financial situation that would allow growth for the indivdual's life plan (family, retirement...).
@@dpayne1943 I LIKE the idea of a fixed rate mortgage for the life of the loan. But it's not economically sustainable in the long run. If interest rates rise over a number of years yet many people are paying peanuts in interest in comparison, what do you think will eventually happen? Financial institutions will try and get that money in other ways to compensate. Unscrupulously. As happened in the GFC. Not to mention what it would do to the economy, when interest rates are one of the prime movers (outside the US) for dealing with inflation. I don't want to pay even more taxes, or $20 for a loaf of bread! And don't forget, interest rates can also go down.
@@db7084 Thanks for the reply. The fact is that the US is not going to change its 30 year fixed rate option. So logically, what happens in Australia won't stop when affected by a US downturn. There will continue to be financial downturns, affecting inflation, housing and interest rates, yes, globally. Given that, maybe focusing on what you say is the real issue "Financial institutions will try and get that money in other ways to compensate. Unscrupulously." would be better and make surviving less difficult for those trying to keep their homes. Just a thought.
House prices are driven by replacement cost, the cost to rebuild same house on block if land and furthermore with onky 35% of houses with a mortgage, interest rates actually do not have that much to do with house prices. Supply is also important. APRA has got away scott free from this, all banks are regulated by Apra and Apras 3% buffer should have never followed rates below a certain level, which it did. No one saw this level of increases coming, including those sniggering at the people impacted. Inflation is high also because our dickhead government keeps spending and also massive energy price increases predominantly caused by their green enery push, is working against the RBA, necessitating higher interest rates than should be.
Everyone these days wants the flash house, flash car, the best furniture, the boat, the caravan, the motorbike and the jetski when they are young. My first house I had a plastic table and chairs for my dining table, bean bags in the lounge for chairs and an old car that got the job done for about 4 years with interest rates at about 10%. Seems like most young people these days live in excess to impress everyone and show how there doing better than everyone else when in fact they are living a lie.
There are a lot like that, there's no arguing it. Then there are kids like my son. Started out in a 25 square metre studio flat with a couch he found on the nature strip, free table and chairs and that was it. Now he's in a 2 bedroom flat with pretty much the same. By the way he doesn't own a car. We had it easier.
Messy relationship and mortgages don't mix well when you don't know what tomorrow will bring.😮😮
For as long as profit over people is the accepted system it wont get any better. A reasonable place to live, fresh food to eat, and clean water to drink needs to be recognized and a given right to anyone born to this earth no matter where you live on it.
@@dim2389 I disagree, sure some people are bone idle and need incentives like that but many make money off of what they love to do and can still share with others so that many more can have a good life also. If people are only - all for me and none for you - then what a miserable life we continue to live - I prefer some for me and some for you, the innovators would always do better than those who choose to coast along but nobody needs to be left in misery from lack of basic needs.
@@dim2389 It may be what has been to date for so many "greedy", people but it is NOT all people.
Humans actually have innate sense of service
Devils don’t
"I read the letters sent in, people have some great points" says Westpac's Chief Economist.
Clearly profits are all that matter.
Bring on the crash of all crashes, Australia needs it now.
As a husband, father and provider, I’ve worked 80+ hours a week for decades now to keep everything stitched together. Unfortunately, it’s a reality that will not be changed any time soon. I’m paying $400 a week more on our mortgage than I was 12 months ago.
That's alot of hours mate I feel for ya. What do you do for a job ?
@@TC-iz6xe I drive tankers interstate. Keeps me pretty time poor when it comes to family and social life.
Hitting mortgage holders with increased rates is not fixing inflation. The people with money who cause a demand and supply issue are not people with morgages.
i mean it does though. People who made poor financial decisions and took out far too big mortgages sell, re enter the market with what they have left over after the mortgage is paid and put that money back into the economy eitber through rent or other investments.
Everyone is doing it so tough... yet fast food joints are full, flights overseas and domestically are packed and everyone seems to be able to afford diesel powered SUVs just to take the kids to school instead of walking.
Been listening to these complaints for years. The spineless greedy government has a lot to do with it.
If the government stopped all these overseas investors and non residents from buying up Australian real estate things might begin to improve but they won't because it keeps tax money coming in.
Welcome to the exciting world of being in debt for life!
This shows that YOU SHOULD NEVER HAVE LOANS BECAUSE THEN YOU WILL NEVER BE FREE!!! Thank God that I've learnt when I grew up during the fiftees!!😂😂😂
Banks and the government are not your friends if they push and make readjusting interest rate mortgages on homes the norm. Long term loan on short interest rates is a disaster in the making. How can you sleep not knowing what the house payment will be in 2, 6, 10, 25 years later? With a 30 year fixed rate mortgage I know what the last payment will be 30 years later and the total interest paid for the house. If rates fall it is possible to refinance at the lower rate.
Kelly if you see this, I think you are making the wrong decision by holding onto your mortgage instead of chasing your dream! There will always be other opportunities to buy an apartment. It might not be in Sydney but you will find something. A shot at the Olympics is a once in a life time opportunity that very few people can experience. Deep down inside you know what to do.
Yes, I was thinking that she needs a sponsor and to get her olympic dreams going again!
We bought our house in 2018. We as a family budgeted 5% interest rate on an indivdual income. It would suck but we budgeted for the worst. So now we live in modest home but can make repayments.
Are all mortgages in Australia variable rate? Twenty years ago, I went with fixed rate options. With record low interest rates when she bought the place, did she actually think that they were going to stay there or go down?
Kelly is young enough to just sell up or go bankrupt and get out of that awful trap. Get the equipment and follow that dream.
The older generation isn't doing that well in this economy.
In canada with a 100k family income you can only buy a 300k home. At this price you have a a small condo and a big city nothing
That isnt true you should move to Prince Albert Sask
I don’t think the banks should be making obscene profits when people are hurting out there!
It’s interesting to see both sides. Corporate profits and the day to day person showing their struggle to repay nearly 60% of their wage to repay their mortgage. Hope 2024 brings rate drops
I don't think people should make long term financial decisions like 30 year mortgages without assessing the risks. Rate rises were inevitable. If you can't afford, sell and downsize or get back into the rental market.
OMG my heart bleeds. As someone who has lived on the streets for 6 years. People struggling to keep their million dollar assets. Life must be so fucking tough. Glad I don't have to battle the evil banks. I'll never be rich, might not always be happy at the bottom, but I'll always be free from debt-slavery.
Are we supposed to feel sympathy for a woman who purchased a home in which she couldn’t afford?
So true. If you have sell your kayak to pay mortgage mean you can not afford the mortgage.
She bought her property on the basis that she wouldn't be the sole purchaser. Unfortunately her relationship ended and she has been left with the full burden. How many people would be able to fund a mortgage on a single wage even if they could "afford" it? Home loans are generally given to dual income purchasers. Kudos to her for working hard to try and make ends meet!
@@angieangie21 She is not a victim. She has the freedom to make better choices.
@@jessicak4223 and of course you know it was her choice to be in a failed relationship. Must be awesome to know exactly how your future is going to play out.
@@angieangie21 There’s lots of victims in your world. If you look at the research on victim mindset, you’ll see that you’re setting yourself up for disappointment. Perhaps that’s someone else’s fault too? Do you know that the key to overcoming unhappiness, even trauma like PTSD, is to remove yourself as the victim? One cannot develop a healthy way to cope while continuing to victimize themselves. They will relapse if they don’t drop the victimization. If you prescribe to a growth mindset, and understand that you are the major driver in your life, studies show that you will create more success. It won’t just happen to you, you’ll EARN it. One can do the same with marriage. A successful marriage is always earned; one can choose to become aware of the facts surrounding marriage, which aspects affect them and their partner, and take action. Ever met a divorced person who admits that it was their fault? Rarely do I. Sadly, they continue down the path of victimhood, believing that their misfortunes had little to do with their choices. The lady in the clip had and has choices. Any sensible person can see that she should get roommates immediately, or sell the house, while changing direction in jobs to one that better fills a need in the market that few can do to earn higher compensation. Not easy, but successful people rarely choose easy before becoming a success.
I hate banks!
What is the government doing to protect the people from the banks profit margins.
So the people are too stupid to act on their own accord and need the political elites to protect them from themselves and the financial messes they get themselves into? Is government supposed to do everything for the financial illiterates?
The government are the ones responsible for this current situation..
Nothing! Government support banks not the people!!
The low interest rates the world has had were the lowest in nine hundred years. People did not plan ahead for rates to return to normal levels. This is NOT high interest rates. 8.26% is average for Australia and 16-17% is high. If you can't afford it, sell while the prices are high.
The grubby banks planned it.
Get out of Sydney. Expensive and waste half your life in traffic. You Can not put a price
on your time
She bought with two incomes and then split . That's not a good example for the story .But ,yeah it sucks .she needs to sell.
Time to down size 🤔
The divorce rate being what it is, I'm surprised anyone factors in dual incomes.
Free money and party is over!!!
Why would her mortgage go up if she bought during a low interest rate environment? Didn’t she lock in a low rate mortgage?
Even if you fix the rate, eventually the fixed term will expire anyway
its all for tv@@theanysim
Fixed terms expire. One min your at 1.8 % the next your at 6.5 + variable
ok i'll beon the banks on this one..its their choice@@1tr1ck
The mortgage system in Australia is not the same as in the USA, here there is only variable interest or short term fixed rates for 1-5 yrs; there is no interest rate locked in for the life of the loan.
Inequality in tax rates is the main problem and the reserve bank and government simply are there to protect extreme wealth
True Neil-Government Covid lockdowns caused inflation+6.3% mortgages. 50% of all housing is State Government “lifetime” GST and Stamp Duty. pure and simple fact. Investors, Banks, Young or old people tenants & even speculators are all victims of Government’s 50% lifetime taxes.
Who makes you pay the price you paid for your house?????? You do , stop it far out Australia is stupid ... house prices are the problem not interest rates
This is just a seek preview of coming events folks ,Australia
Wow. So it’s not just the us, it’s everywhere
You'll own nothing and you'll be happy.
Sorry, the government will want your nothings. Make money by peoples desperate, with nothing to live on. The rich will take that away too. Solutions: since the ultra rich has caused this income disparity. Is cut the main cost of living on homes, mortgages and businesses by two thirds. Afterwards only two percent increases. Taxes stay the same. At same time cut all federal and states wages by one fifth. Afterwards their increases are the same as SSI increases. Time for the ultra rich to Adjust.
Glad to see interest rates rise on my savings. In the 80’s I was paying 13.75 % on my mortgage.
It's never going to out pace inflation
how sure u bout dat@@timothypotts3913
Wage vs Mortgage is way higher now… It’s up around 14x in Sydney
It's way higher now champ if you were educated, this whole "rates were higher back in my day" is total BS.
😢 They were 13.75% back when I purchased my first house and salaries were much lower than they are now. You can get $20 now at McDonalds. That is $40,000 at minimum wage. I had graduated with an Engineering degree when I bought my first house.
I went through all this in the early 90s when interest rates hit 17%. Somehow I hung on and managed to keep my home but it was a very lean few years. I also worked 3 jobs like Kelly.
Good for you...pity these days are not reflective of the 90s.
Except the loans were ~60k as my parent's was not 800k
17% on 60k = 10.2k
8% on 800k = 64k
The interest is more than the loans
Big difference
@pauldavies4650 Mine was 360k which was huge back then.
Was only 17% for 2 years.
@dustingoldsworthy7303 Hopefully today's rates will follow a similar pattern .
Cant she just sell it and rent again?
Or rent a room out in her place
the people that were priced out of the homeowner market don't give a fuck about those wealthy enough to have a home loan
The regional areas like coolangatta tweed byron are expensive houses and units
This is where Kelly went wrong ... WHY OH WHY Kelly with all that potential did you choose to pull your income 20 or so year from the future and bring it all to the present with a mortgage. Understand something people .. the Australian farking dream is not to own a home , have 2 kids and do that bbq .. the Australian dream is whatever the hell you want it to be ! Build a business , be an Olympic champion and possible appear on the cereal box and buy 15 houses .. not just one. In my case I did uni , did an engineering degree and before I even graduated had a nice job lined up , did that job for 2 years , saved up a bit of money with a focus on "buying my first home" and to have the "Australian dream" .. after 2 years I moved jobs and managed to earn 6 figures and some .. and had a deposit for an apartment in maroubra. Bought it , paid the mortgage for 4 years then asked myself .. is this what the "Australian dream" is .. buy a place , pay the interest , rent it out , wait for capital gains , pull equity and buy another. Zero value in that , no excitement just more of the same. I sold the place , paid my taxes on it and built a business. I chased my actual dream not kept on what everyone considered the "Australian dream". Chasing my actual dream all my money I had saved almost went to 0 , all the capital gains I got from selling went to 0 , but eventually I got to where I wanted and life is much better then what it would have been had I just tried to set myself up with a house , pay that mortgage and just follow the "Australian dream". I am sad for Kelly , she could have been an Olympic champion , been on cereal boxes and achieved far better heights , but because she chased that silly ideology of property first she let all her other dreams go. People , if you can't buy a house , why stress , there are literally many other avenues for you to succeed in life , you don't need to get a loan and tie up 30-35 years of your life indebted to the bank, I know it's a lot harder then before even to rent but still , worst thing anyone can do who has a dream which does not include having that house is to crush it by buying that house and withdrawing your next 35 years of potential earnings and opportunity costs today , specially with the insecurity in the world and rates as they are .. owning a home and having a mortgage isn't bad but if it's not your dream like Kelly , why do it ?
The real issue is the cost of housing. Successive government policy has incentivised investment in homes as an asset class.
There is an obvious answer but the clowns in government at all levels and their donors/ post politics future employers - corporate media, banks and developers have way too much skin in the game.
If you’re thinking about migrating here, bring a tent.
This country has gone to the dogs. 😢
Thanks to RBA ❤...
NOW time for falling down the houseing price and good for first home buyers...
Actually, housing price should be affordable.....
4.53%? Try 5.6%, that's my mortgage rate currently in the Czech Republic
Ya 6.3 % for Canada over inflated houses not even worth that..
How’d that interview with Peter Schiff go? 😂
WOW.... Finally.. "Debt Trap" being used correctly for once.. What ever bank buffers were used to approve the mortgages should be not be exceeded. Banks have already accounted for the risk when approving the deal, it should be either burdened fairly between both parties or Banks need to own up to their own greed