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@mn5 said in Bank Lending/CCCFA:
@mick-gold-coast-qld said in Bank Lending/CCCFA:
It is directed at "you blokes", the voters, and attached to cogent comments you made identifying the subject it is focused on ... "government was warned by two different groups what the impact of their legislation would be ...".
My treatise is not to you individually. Perhaps I should have addressed it to "youse".
I haven't especially noticed voting (or other) characteristics of individuals here because I am afraid to attend often, having been warned off by one of the Fern's brightest - for being old I gather - it makes him feeeel uneasy and causes him to swear a lot, in a tough way.
I have been aware of what your government has been cooking up - it's in the papers.
Thirty or more years ago I watched Kerry Packer bark back at a Senate hearing into paying tax:
"I am not evading tax in any way shape or form. Now, of course, I am minimising my tax. And if anybody in this country doesn't minimise their tax, they want their head read. Because, as a government, I can tell you, **you're not spending it that well that we should be donating extra**."
That had an impact - I started paying closer attention to what fools who couldn't run a chook raffle were doing with millions and billions; and keeping track of government borrowings. It was alarming.
I am attempting to point up the need for young blokes in their economic prime to study closely how much government is scooping up from them and who it is being spent on.
That's a sight more effective use of their time and energy than furious agreement with strangers on a blog about trivia ... that Morrison is evil, just like Reagan and Trump; and that "Saint Jacinta cares for me and others - look at her sad face under the fez/hijab/Apache feathers" she has adopted for this week to maximise a headline opportunity; and so on.
Your government, your bellicose, snarling "foreign minister" this week for example, is a huge problem for New Zealand. The several political parties clearly know nothing about commercial management, yet they distract you so easily on incidentals such as repatriation of your exported criminals and who should speak what language. The most productive group is a mere 20% of your 5 million people - too low a proportion doing the work of regularly providing for the rest.
Believe me, no one is tough on the fern. Don’t worry about it
True. I wear slippers before winter.
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Look, really MN5, I am touched that you care enough to reach out - a new warm term I have learned from my life coach, who is helping me through the fear. However ...
I have counselled a couple of the local supermarket check out technician-ettes when they ask "How are you?"
Lovely young things that they are I suggest that when they see an old bloke approaching they must assume that he either:
a) lived a miserable life and doesn't care much for people, or
b) he lives alone and no-one has spoken to him for a week and a half, he "might think you really care and stand here boring you witless for a half hour!"
They must take control I say, by making an assertion - "What a fabulous morning!" responding to it themselves "Lovely breeze out there" and moving him along "That'll be 3 and sixpence thanks".
Now, you do seem to be a nice chap, have you got some time to hear about the old days?
(Ooohhh! Little Ash Barty was 6-4, 2-5 but now she's back near square. Better go!)
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In an example of the calibre of journalism at One News, the last paragraph states:
Reserve Bank data showed that in November 2021 there was $9.1 billion in lending. In December, when the new law came into force, it dropped to $7.9b.
Sounds terrible, but Bernard Hickey has slightly more analysis here:
Reserve Bank figures out yesterday showed there was still $7.9b of new lending in the month of December, which was down 13% from November, but in line with the $8.3b average for the rest of 2021 and above the $7.2b seen for the last two years. New first home buyer lending of $1.56b was down just 10% from November and in line with the monthly average for 2021.
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@godder said in Bank Lending/CCCFA:
In an example of the calibre of journalism at One News, the last paragraph states:
Reserve Bank data showed that in November 2021 there was $9.1 billion in lending. In December, when the new law came into force, it dropped to $7.9b.
Sounds terrible, but Bernard Hickey has slightly more analysis here:
Reserve Bank figures out yesterday showed there was still $7.9b of new lending in the month of December, which was down 13% from November, but in line with the $8.3b average for the rest of 2021 and above the $7.2b seen for the last two years. New first home buyer lending of $1.56b was down just 10% from November and in line with the monthly average for 2021.
Have had multiple real estate agents tell me that buyers had dropped (by as much as 30%) from December. January has been the same. Real world impact.
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@kirwan said in Bank Lending/CCCFA:
@godder said in Bank Lending/CCCFA:
In an example of the calibre of journalism at One News, the last paragraph states:
Reserve Bank data showed that in November 2021 there was $9.1 billion in lending. In December, when the new law came into force, it dropped to $7.9b.
Sounds terrible, but Bernard Hickey has slightly more analysis here:
Reserve Bank figures out yesterday showed there was still $7.9b of new lending in the month of December, which was down 13% from November, but in line with the $8.3b average for the rest of 2021 and above the $7.2b seen for the last two years. New first home buyer lending of $1.56b was down just 10% from November and in line with the monthly average for 2021.
Have had multiple real estate agents tell me that buyers had dropped (by as much as 30%) from December. January has been the same. Real world impact.
Is that from November which is traditional in the industry as December and January are usually quieter than other months, or from the same time in the year before? (which was Hickey's point) Is that their analysis that it's solely that, and not any other factor at all like tightening banks' LVRs limits?
If a borrower has Netflix (to use an example above), why would a lender not consider that to be an ongoing expense for the purposes of assessment of ability to make repayments? How much of the problem is an overcautious approach, and how much is that now that lenders verify applications, it turns out clients are inaccurate in their applications more than was thought, and the new normal is actually accurate?
I suggest that the narrative of "Lending figures have dropped, unintended consequences, how could the government not see this" could just as easily be "Lending figures have dropped because lenders having to verify application information has reduced the poor quality loans being made" or "New legislation takes time for everyone to get comfortable applying".
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@kirwan said in Bank Lending/CCCFA:
@godder said in Bank Lending/CCCFA:
In an example of the calibre of journalism at One News, the last paragraph states:
Reserve Bank data showed that in November 2021 there was $9.1 billion in lending. In December, when the new law came into force, it dropped to $7.9b.
Sounds terrible, but Bernard Hickey has slightly more analysis here:
Reserve Bank figures out yesterday showed there was still $7.9b of new lending in the month of December, which was down 13% from November, but in line with the $8.3b average for the rest of 2021 and above the $7.2b seen for the last two years. New first home buyer lending of $1.56b was down just 10% from November and in line with the monthly average for 2021.
Have had multiple real estate agents tell me that buyers had dropped (by as much as 30%) from December. January has been the same. Real world impact.
I am not surprised, steep increases in sale prices cannot be sustained when unemployment has grown, revenues and wages have stalled and migration has fallen away. The markets where I live - Gold Coast and Sydney - have experienced eye watering price increases, but something has pulled the handbrake on in the past couple of months.
It has happened before, going back to the '80s.
The black plague plus protagonist navies circling each other in the South China Sea have eliminated an important group of Asian buyers here. That will remain the case for a bit however that same trend has reversed very swiftly in decades past.
Uncertainty about a leaderless, weakened and vulnerable USA (a whole new experience that!), in the hands of known, ambitious internal interests with unknown targets and strategies is the unnameable in the wood pile.
Most uncertain times and the prediction game is pretty much educated guesswork now.
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@godder My partner is trying to sell properties from her parents estate.
My impression is real estate agents have become used to not having to actually work for their living and are lowering expectations because they can't be arsed doing their jobs properly.
Their are exceptions but have come across too many who have been creaming it.
She's being told a 1920's bungalow on a full sized section in Westmere won't attain GV (set 4 years ago). I think first home buyers are being affected and that will cascade through but it shouldn't be making a sizeable difference once you get to the 3-4 mill market.
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@dogmeat said in Bank Lending/CCCFA:
@godder My partner is trying to sell properties from her parents estate.
My impression is real estate agents have become used to not having to actually work for their living and are lowering expectations because they can't be arsed doing their jobs properly.
Their are exceptions but have come across too many who have been creaming it.
She's being told a 1920's bungalow on a full sized section in Westmere won't attain GV (set 4 years ago). I think first home buyers are being affected and that will cascade through but it shouldn't be making a sizeable difference once you get to the 3-4 mill market.
That sounds like BS to me. That type of property is like hen's teeth and very sought after. I think you need to find another agent
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@mick-gold-coast-qld said in Bank Lending/CCCFA:
I have counselled a couple of the local supermarket check out technician-ettes when they ask "How are you?"
Just reply with 'I'm so glad you asked because my piles are acting up awfully"
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@dogmeat said in Bank Lending/CCCFA:
@canefan My point. These are prospective agents but it's more than one.
Doesn't sound right to me. I guess you can test the market. Having made the mistake of selling something in the last 5 years, if you don't have to sell I would hold it. Everyone seems to be getting huge money, of course until it's your turn....
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@dogmeat said in Bank Lending/CCCFA:
@godder My partner is trying to sell properties from her parents estate.
My impression is real estate agents have become used to not having to actually work for their living and are lowering expectations because they can't be arsed doing their jobs properly.
Their are exceptions but have come across too many who have been creaming it.
She's being told a 1920's bungalow on a full sized section in Westmere won't attain GV (set 4 years ago). I think first home buyers are being affected and that will cascade through but it shouldn't be making a sizeable difference once you get to the 3-4 mill market.
We are finding the opposite. Looking at properties down south and agents are telling vendors they will get them almost 2x the 2019 RV.When you look at the place it is obviously way too high a price for what you are buying. Even at 1.6x some don't make sense.
These places are still sitting on the market but the agents advice isn't wavering. In a 'hot' market surely it is a sign if your place is unsold after 3-4months?We may have bought something by now if expectations were realistic.
My take is that the market is changing but taking a while to correct.
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@dogmeat said in Bank Lending/CCCFA:
@crucial I think the market is definitely turning but not rapidly or far.
Equities on the other hand. Liquid so much more volatile. Mine are down 3.6% in January
After a strong and steady last quarter in 2021 things are pretty bumpy right now
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@godder There are some numbers we don't have access to, such as the number of applications for home loans and the breakdown of declined vs approved applications.
But if we assume the number of applications was constant, given a year-on-year growth of 20% in house prices we could expect that the value of the loan applications, and the value of the approved loans, would grow by 20% as well. That didn't happen. So if the argument is being made that the net borrowing was largely in line with previous years, that would seem to be a real-world decline in lending, yes?
We should also be aware that the CCCFA amendment implementation was delayed shortly before it was due. Banks' systems and process were rolled out in advance of the original date. Things didn't simply change overnight in December.
I suggest that the narrative of "Lending figures have dropped, unintended consequences, how could the government not see this" could just as easily be "Lending figures have dropped because lenders having to verify application information has reduced the poor quality loans being made" or "New legislation takes time for everyone to get comfortable applying".
Banks don't want to lose money. That's not new. The new processes aren't about loan quality, they're about potential liability. Banks were able to exercise discretion where they believed common sense supported granting an application. Now they can still do that but there are penalties for getting that wrong that didn't exist before, so they are choosing not to use their discretion. The government should have seen this, especially when they were told explicitly that that's how it would play out. They don't seem to understand that, sure, they can dictate how banks assess the risks. But they can't force them to lend.
The next unintended consequence is what the banks do to make up the shortfall in home loan income. Coming to an economy near you...
Bank Lending/CCCFA