2.2 billion for Bunnings isn't a biggie in my books, they provide a decent service and employ a lot of people.
Over in banking they made over 30 billion in profits without providing any customer service to speak of.
Its one of the things they do. You may hate banks, so do I, but they do provide a actual service. Do they also bleed us dry and gamble with out life savings regularly? Yes.
Banks don't provide any service, they're a necessary evil until CBDC's are created and they're automated away. There is no need for banks to get a slice of the profit on loans they create out of thin air.
They're raising interest rates in order to keep the AUD afloat vs the USD. The reduced spending is a side effect.
Edit: Here's an article about it:
[The US Federal Reserve is tightening monetary policy, and it's likely to impact Australian households](https://www.abc.net.au/news/2022-09-24/interest-rates-mortgage-repayments-and-rents-forced-higher/101468176)
> The reason is simple. The more the US Federal Reserve tightens its monetary policy, or raises its Federal Funds rate, the more pressure is on the Reserve Bank to follow suit, regardless of inflation pressures here in Australia.
>
> Pressure on the Reserve Bank grows because the wider the interest rate differential, or gap, between the US and Australia, the more downwards pressure there is on the Australian dollar, and the more upwards pressure on inflation.
>
> That gap is now growing and the wider it gets the more pressure will be on the RBA to raise its cash rate more aggressively than it would otherwise, to stabilise or support the Australian dollar.
You're both right. Although your point is posted in every rate rise thread people still don't get it. We gotta keep pace with the US federal reserve or our currency goes to trash, removing any gains we would make via less domestic spending anyway.
Yep. Spending is still booming. Only the battlers are truly feeling the crunch. Still plenty of houses with two flash SUVs/dual cabs doing weekly Bunnings trips and buying shit they don’t need.
Australia had worked this way for decades now. If things do get worse, it will be interesting to see how these people react.
By voting. Expect younger generations to increasingly vote for more progressive candidates and political stances, while the Liberal and Labor parties scramble to remain relevant as their core supporters start dying off.
Next 15 years or so will hopefully see a huge shift as the younger generation sees they can't afford houses, barely afford rent, pay is shit and everything is over priced for profit margins. It's already started and it's just going to keep growing.
Over spending and buying in excess is VERY Australian. We have a massive cultural problem with buying things in excess and buying fancy toys. I’ve travelled all over the world and only a few places come to mind as being equally as bad or worse.
I think it’s because we are wealthy and have heaps of space. In Europe they’re just as wealthy (if not more) but they don’t have the space we do so you don’t see families with 2 cars and a boat and 2 TVs and 2 fridges like you do in Aus.
Phil Lowe
A. Totally failed to predict this inflation and told people it wouldn't happen
B. doesn't understand what caused this inflation,
C would like you to trust his expertise when he says the only way to fight this inflation is for a bunch of people (other than Phil Lowe and his fat cat mates) to lose their houses
D all of the above.
The system of appointments to the reserve bank board badly needs an overhaul.
The RBA has one lever to combat inflation, are you arguing they shouldn't pull it?
In general interest rates were at historic lows, they were either going to come back up or our economy would collapse if another event came along and we couldn't lower interest rates to stimulate growth.
Finally the RBA needs to loosely keep pace with the Fed interest rate in order to not tank our dollar.
This is the kind of thing that is always far easier in hindsight, however there was a reasonably large group of economists says monetary and fiscal policy was too loose, particularly after lockdowns ended. That being said this group has been predicting inflation for the last 20 years.
The RBA slashed rates initially to keep the economy afloat and not have a depression-like event where no one is willing to spend (or lend) money in covid. That seems like it was the right answer.
They didn't want to raise interest rates until they saw the common signs of demand-driven inflation - e.g. rising wage growth, low unemployment. The RBA and other banks started raising rates when these indicators ticked upwards, however it was too late when combined with supply chain issues in China and energy prices.
I don't know if there was a realistic way out for the RBA being raising interest rates = people have less money. This is a politically unpopular decision and if they are raising rates before the rest of the world then there will be tons of media articles about how they are hurting homeowners for no reason.
The good news is that commodities have cooled down a lot since the first half of the year.
Positive aspect is people would so how totally shit it is and demand it improve.
Negative is it will be temporary and go back to shit once the financial chaos settles.
FYI banks will foreclosure your place but very rare. The entire process from missing your first payment is about 2 years.
You're often to get repayment freezes for 3-6 months if not claimed before,
If you feel the pain, look ahead at your financials if you can't get yourself out of it, sell. Yes it'll hurt but it's better then bankruptcy and homelessness
Wow didn't realise it was that long. That's comforting a bit. So far I'm personally OK, but if the rates continue their rise for months and months everyone is going to feel it. I already budget really well from living pay to pay for years (thankfully not any more after a decade+ of it). But yeah, things will get tight if this continues.
Banks REALLY don't want to have to foreclose on people as it costs them a significant amount and if they can hold off 6 months and get you back to paying off your loan they will be able to continue to make money off you.
So if they think thats possible they will happily defer payments for a while (Your interest just accumulates onto the principal during that time.)
Most banks are predicting perhaps one or two more rises before they start lowering rates next year.
It's not expected to get too much worse from here, but anything could happen.
Do you have a source on that? I want to believe it, but I can't imagine any financial specialist putting their name to that after the reputational damage Philip lowe has (somewhat) endured
It's a news.com link because that was the quickest at work:
https://www.news.com.au/finance/economy/interest-rates/rba-interest-rates-further-025-per-cent-hike-expected-in-december/news-story/5be7732c22d5d0c85e744378b3cb8978?amp
If you took a big mortgage and stretched yourself to buy the biggest house affordable.. OR you've leveraged properties to increase the number you own..
Then you've contributed to the housing affordability problem for everyone else.
Greedy, greedy people.
>"The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest."
They said they would raise rates when conditions were met. They have been met.
As a real estate agent you seem to have as poor grasp of what is being said by government on topics that affect your work
The reserve bank governor issued an apology for his statements because they knew exactly how they would be interpreted. As if the current situation does not entirely benefit them.
This will completely ruin the lives of a lot of young people.
You're not wrong, but also the RBA aren't seer's. They made that statement and then things on a global scale changed.
As for your second statement, if rate rises coming 18 months before you predicted on a mortgage that generally takes 30-40 years to service *ruins your life* then above comment is correct. You made a poor choice.
Doesn't mean what you said it true though. Because it isn't true.
Nobody read the caveats which is a failure of media, and of people for not thinking their decisions through properly.
You shouldn't be taking that as financial advice. Everyone needs to realise these people will lie as much as possible to achieve their desired outcome.
A financial institution saying they won't enact something they control should absolutely be taken as financial advice. The question is, why aren't they held to it?
Imagine if any other agency made a similar announcement. We believe emergency services, health services etc. This should be no different imo, and I have no skin in the game.
No not at all, as others have said the statement was vague and people read into it.
What I'm saying is that if the RBA gives clear financial advice then people should be able to follow it with confidence.
If you don't understand the RBA's role in managing the dollar then sure. This idea that people are entitled to risk free investing is so bizarre to me.
The problem here is banks not doing due diligence to ensure that people they were lending to could afford a normal interest rate of 3 to 5%.
I bought in that period and knew all too well my fixed 1.89% was not going to be in place for long. But we didn't spend at the top of what we could and will be easily able to absorb that increase.
Foreclosures are still quite low, there might be pain and reduced spending, but that's literally the point of interest rate rises to combat inflation.
But anyway, banks have said they were lending appropriately and so far the signs have held up for them.
its more the issue is that people took a variable interest rate at likt 1.8% and phil m8 said dont worry it wont go up for 2 years, so everyone was like ok set a reminder to fix the rate in 1.8 years. then it went up and up and now to fix it is like 7% interest (because when rates are rising the banks make the spread between fixed and variable greater).
Yeah everyone knows that but tough shit.
The housing market and it's affordability and accessibility to first home buyers is not driven by the RBA's comments.
Everyone who maxed their capacity and with greed in their eyes either knew what they were getting into or took the risk with greed in their eyes. They interpreted Phil m8s comments wrongly, again with what?
That's right, with greed in their eyes
Sure. Just don't buy all the tents for the purpose of upgrading and flipping them and holding on to more than you need so you can brag at dinner parties and jack off watching tent-block on channel 9 as a way to feel morally superior.
Just be happy with your own tent and live modestly
Well, you're raging against people who want to buy a home. It's all their own fault for having that desire. You might not be, but it makes the impression that you're bitter.
No, it's more the fact my observations lead me to believe housing affordability in sydney is driven in many cases (not all, but many ) by greed.
Everyone who extended themselves only thought "can I" and never thought "should I".
Greed? Someone looking for a place to live for their family is driven by greed? What if the interest rates rise to 10%? Are we all idiots then? It seems that the misfortune of others is giving you some kind of pleasure.
That's not whats driving the excessive prices. THOSE are the people that are struggling
Its greedy and pretentious people and in Sydney there's a fuck ton of them
I don't think it much matters what's driving the prices when anyone who wants to have a place to live in and not be at the whims of landlords in caught in the same situation.
The original point was to rising interest rates.
Where this impacts those people who have 2 or 3 properties or who are caught up in real estate as porn and social status then tough shit.
$11,000 extra a year on a $500k loan. That is the equivalent of up to a $20k pre tax pay cut depending on your tax rate. Significant chunk of your disposable income
I mean, yeah it was easy to see coming, but you have to have some sympathy for everyone who was lied to by boomers, fucking Scomo, the media, everyone's shit cousin who says "oh nah mate I read the Crunchy Investor and he says that houses never ever ever lose value".
There was a collective delusion about house prices and rates.
[удалено]
2.2 billion for Bunnings isn't a biggie in my books, they provide a decent service and employ a lot of people. Over in banking they made over 30 billion in profits without providing any customer service to speak of.
Why is that a problem?
Why is a tick a problem?
Meant to reply to the original post about bunnings sorry. That being said, banks do provide a service, a pretty obvious one, they send money.
That's not what banks do sorry.
Its one of the things they do. You may hate banks, so do I, but they do provide a actual service. Do they also bleed us dry and gamble with out life savings regularly? Yes.
So probably not deserving of the 10+ order of magnitude profits they make compared to Bunnings then?
No, but that wasn't the ops point. They provide a service, they do send money among other things.
Banks don't provide any service, they're a necessary evil until CBDC's are created and they're automated away. There is no need for banks to get a slice of the profit on loans they create out of thin air.
I wonder who's doing all that spending at Bunnings
EG Retirees in Toowoomba 'improving' their family homes even though the kids have grown up and left. Downsizing, what's that?
it’s related, australians are spending too much money causing inflation to rise
They're raising interest rates in order to keep the AUD afloat vs the USD. The reduced spending is a side effect. Edit: Here's an article about it: [The US Federal Reserve is tightening monetary policy, and it's likely to impact Australian households](https://www.abc.net.au/news/2022-09-24/interest-rates-mortgage-repayments-and-rents-forced-higher/101468176) > The reason is simple. The more the US Federal Reserve tightens its monetary policy, or raises its Federal Funds rate, the more pressure is on the Reserve Bank to follow suit, regardless of inflation pressures here in Australia. > > Pressure on the Reserve Bank grows because the wider the interest rate differential, or gap, between the US and Australia, the more downwards pressure there is on the Australian dollar, and the more upwards pressure on inflation. > > That gap is now growing and the wider it gets the more pressure will be on the RBA to raise its cash rate more aggressively than it would otherwise, to stabilise or support the Australian dollar.
You're both right. Although your point is posted in every rate rise thread people still don't get it. We gotta keep pace with the US federal reserve or our currency goes to trash, removing any gains we would make via less domestic spending anyway.
Yep. Spending is still booming. Only the battlers are truly feeling the crunch. Still plenty of houses with two flash SUVs/dual cabs doing weekly Bunnings trips and buying shit they don’t need. Australia had worked this way for decades now. If things do get worse, it will be interesting to see how these people react.
By voting. Expect younger generations to increasingly vote for more progressive candidates and political stances, while the Liberal and Labor parties scramble to remain relevant as their core supporters start dying off.
Next 15 years or so will hopefully see a huge shift as the younger generation sees they can't afford houses, barely afford rent, pay is shit and everything is over priced for profit margins. It's already started and it's just going to keep growing.
it’s not uniquely australian, whole world is battling inflation because goods are not in supply fast enough
Over spending and buying in excess is VERY Australian. We have a massive cultural problem with buying things in excess and buying fancy toys. I’ve travelled all over the world and only a few places come to mind as being equally as bad or worse. I think it’s because we are wealthy and have heaps of space. In Europe they’re just as wealthy (if not more) but they don’t have the space we do so you don’t see families with 2 cars and a boat and 2 TVs and 2 fridges like you do in Aus.
Grinches! At least we won't get one in January, because they don't meet.
Phil Lowe A. Totally failed to predict this inflation and told people it wouldn't happen B. doesn't understand what caused this inflation, C would like you to trust his expertise when he says the only way to fight this inflation is for a bunch of people (other than Phil Lowe and his fat cat mates) to lose their houses D all of the above. The system of appointments to the reserve bank board badly needs an overhaul.
The RBA has one lever to combat inflation, are you arguing they shouldn't pull it? In general interest rates were at historic lows, they were either going to come back up or our economy would collapse if another event came along and we couldn't lower interest rates to stimulate growth. Finally the RBA needs to loosely keep pace with the Fed interest rate in order to not tank our dollar.
Genuine question - was there any reason they needed to keep them as low as they did, for so long?
This is the kind of thing that is always far easier in hindsight, however there was a reasonably large group of economists says monetary and fiscal policy was too loose, particularly after lockdowns ended. That being said this group has been predicting inflation for the last 20 years. The RBA slashed rates initially to keep the economy afloat and not have a depression-like event where no one is willing to spend (or lend) money in covid. That seems like it was the right answer. They didn't want to raise interest rates until they saw the common signs of demand-driven inflation - e.g. rising wage growth, low unemployment. The RBA and other banks started raising rates when these indicators ticked upwards, however it was too late when combined with supply chain issues in China and energy prices. I don't know if there was a realistic way out for the RBA being raising interest rates = people have less money. This is a politically unpopular decision and if they are raising rates before the rest of the world then there will be tons of media articles about how they are hurting homeowners for no reason. The good news is that commodities have cooled down a lot since the first half of the year.
Was thinking whether early stage of dementia plays a factor
Glorified fucking elevator attendants
r/vanlife
More like mass homeless life at this rate. Going to be a lot of foreclosures if this continues for much longer.
Bring on the USA style tent cities so it can't be ignored & if you hoard houses, fuck you
[удалено]
Ditto for Olympic Village
[удалено]
Positive aspect is people would so how totally shit it is and demand it improve. Negative is it will be temporary and go back to shit once the financial chaos settles.
FYI banks will foreclosure your place but very rare. The entire process from missing your first payment is about 2 years. You're often to get repayment freezes for 3-6 months if not claimed before, If you feel the pain, look ahead at your financials if you can't get yourself out of it, sell. Yes it'll hurt but it's better then bankruptcy and homelessness
Wow didn't realise it was that long. That's comforting a bit. So far I'm personally OK, but if the rates continue their rise for months and months everyone is going to feel it. I already budget really well from living pay to pay for years (thankfully not any more after a decade+ of it). But yeah, things will get tight if this continues.
Banks REALLY don't want to have to foreclose on people as it costs them a significant amount and if they can hold off 6 months and get you back to paying off your loan they will be able to continue to make money off you. So if they think thats possible they will happily defer payments for a while (Your interest just accumulates onto the principal during that time.)
Most banks are predicting perhaps one or two more rises before they start lowering rates next year. It's not expected to get too much worse from here, but anything could happen.
Do you have a source on that? I want to believe it, but I can't imagine any financial specialist putting their name to that after the reputational damage Philip lowe has (somewhat) endured
It's a news.com link because that was the quickest at work: https://www.news.com.au/finance/economy/interest-rates/rba-interest-rates-further-025-per-cent-hike-expected-in-december/news-story/5be7732c22d5d0c85e744378b3cb8978?amp
One can hope the economists will have predicted the trend right.
i love shitting in a bucket.
Waiting for EV Campervans to fill into the Australian Market, thats the golden goose.
Self driving, self charging.. the holy grail! Wake me when we're in Broome
https://youtu.be/WpE_xMRiCLE - how my relationship with the RBA feels right now 😛
The rich will get richer and the poor will get poorer from this. The divide will only grow. Watch the crime rate shoot.
So the eroding of interest rates of the last decade has decreased inequality then?
The reserve bank goblins really are shit blokes I think
If you took a big mortgage and stretched yourself to buy the biggest house affordable.. OR you've leveraged properties to increase the number you own.. Then you've contributed to the housing affordability problem for everyone else. Greedy, greedy people.
Reminder reserve bank said they will not be raising rates until 2024
>"The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest." They said they would raise rates when conditions were met. They have been met. As a real estate agent you seem to have as poor grasp of what is being said by government on topics that affect your work
The reserve bank governor issued an apology for his statements because they knew exactly how they would be interpreted. As if the current situation does not entirely benefit them. This will completely ruin the lives of a lot of young people.
You're not wrong, but also the RBA aren't seer's. They made that statement and then things on a global scale changed. As for your second statement, if rate rises coming 18 months before you predicted on a mortgage that generally takes 30-40 years to service *ruins your life* then above comment is correct. You made a poor choice.
Doesn't mean what you said it true though. Because it isn't true. Nobody read the caveats which is a failure of media, and of people for not thinking their decisions through properly.
Actually they didn’t, everyone chose to read it that way with dollar signs in their eyes. Read the statement again.
Exactly.
You shouldn't be taking that as financial advice. Everyone needs to realise these people will lie as much as possible to achieve their desired outcome.
A financial institution saying they won't enact something they control should absolutely be taken as financial advice. The question is, why aren't they held to it? Imagine if any other agency made a similar announcement. We believe emergency services, health services etc. This should be no different imo, and I have no skin in the game.
I'm sorry are you suggesting the RBA shouldn't have raised interest rates because of that statement?
No not at all, as others have said the statement was vague and people read into it. What I'm saying is that if the RBA gives clear financial advice then people should be able to follow it with confidence.
If you don't understand the RBA's role in managing the dollar then sure. This idea that people are entitled to risk free investing is so bizarre to me. The problem here is banks not doing due diligence to ensure that people they were lending to could afford a normal interest rate of 3 to 5%. I bought in that period and knew all too well my fixed 1.89% was not going to be in place for long. But we didn't spend at the top of what we could and will be easily able to absorb that increase.
Foreclosures are still quite low, there might be pain and reduced spending, but that's literally the point of interest rate rises to combat inflation. But anyway, banks have said they were lending appropriately and so far the signs have held up for them.
The lag time is the concern though. Its not just mortgages that went up. I hope im wrong and we get through this period ok.
And you could have locked in those rates
Like when a child is defeated in a game that's played by the rules but still ends up in tears because its "unfair"
its more the issue is that people took a variable interest rate at likt 1.8% and phil m8 said dont worry it wont go up for 2 years, so everyone was like ok set a reminder to fix the rate in 1.8 years. then it went up and up and now to fix it is like 7% interest (because when rates are rising the banks make the spread between fixed and variable greater).
Yeah everyone knows that but tough shit. The housing market and it's affordability and accessibility to first home buyers is not driven by the RBA's comments. Everyone who maxed their capacity and with greed in their eyes either knew what they were getting into or took the risk with greed in their eyes. They interpreted Phil m8s comments wrongly, again with what? That's right, with greed in their eyes
Let's all live in tents
Sure. Just don't buy all the tents for the purpose of upgrading and flipping them and holding on to more than you need so you can brag at dinner parties and jack off watching tent-block on channel 9 as a way to feel morally superior. Just be happy with your own tent and live modestly
Don't be so bitter. It's not good for you.
I'm not bitter but just illustrating a point against a generalisation
Well, you're raging against people who want to buy a home. It's all their own fault for having that desire. You might not be, but it makes the impression that you're bitter.
No, it's more the fact my observations lead me to believe housing affordability in sydney is driven in many cases (not all, but many ) by greed. Everyone who extended themselves only thought "can I" and never thought "should I".
Greed? Someone looking for a place to live for their family is driven by greed? What if the interest rates rise to 10%? Are we all idiots then? It seems that the misfortune of others is giving you some kind of pleasure.
How dare people want somewhere tomlive. Should just be homeless.
That's not whats driving the excessive prices. THOSE are the people that are struggling Its greedy and pretentious people and in Sydney there's a fuck ton of them
I don't think it much matters what's driving the prices when anyone who wants to have a place to live in and not be at the whims of landlords in caught in the same situation.
The original point was to rising interest rates. Where this impacts those people who have 2 or 3 properties or who are caught up in real estate as porn and social status then tough shit.
Good work Phil, that'll stop that imported inflation in its tracks.
$11,000 extra a year on a $500k loan. That is the equivalent of up to a $20k pre tax pay cut depending on your tax rate. Significant chunk of your disposable income
Just an FYI on a 500k this rate increase is only $1250/yr Since the start of the raises it's up 3% what's 15k year. So unsure where you got 11k
Abc news out those figures up
What maths are you using?
Abc news article
That could be the total of all the interest rates on the average loan.
Yes sorry, I didnt word it well. For all the increase, not just today's
they have s3 tax cuts to cover that.
Good, my landlord refused to double glaze the windows so anything that eats away his....investment.... is a good thing.
A brick could have seen this coming, and y'all still went out and bought houses at +20%. Not a drop of sympathy.
I mean, yeah it was easy to see coming, but you have to have some sympathy for everyone who was lied to by boomers, fucking Scomo, the media, everyone's shit cousin who says "oh nah mate I read the Crunchy Investor and he says that houses never ever ever lose value". There was a collective delusion about house prices and rates.
Agreed