RBA Rises Rates for The 9th Time in a Row

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Reserve Bank of Australia

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• • • 

      Ghost47 on 09/02/2023 - 22:19

      Yep, families that — surprise, surprise — are probably not so clued in on how macroeconomics works.

      The disadvantaged will suffer, but hey at least landlords get rich. /s

      • 

        klonky on 10/02/2023 - 07:10

        It's an investor's wet dream

    • 

      bobolo on 10/02/2023 - 01:01

      +3

      Plenty of Western Sydney suburbs are well below $1m for a very decent family home. Many places even around the $600k - $700k mark even at the very peak…and these are houses as well

      If you cannot afford a 6% interest rate on a $500k - $600k mortgage, you had no business buying that house to live in in the first place IMO

      • 

        Daniel Plainview on 10/02/2023 - 11:03

        -1

        Not sure who & why @bobolo was downvoted for this benign comment?

        Perhaps if he said something you perceive as wrong - reply and engage, correcting him? Instead of anonymous and cowardly downvote which is unconstructive and IMHO indicates you have no rebuttal, just dislike the facts he's presented (which I am unsure are true or not).

  • 

    91rs on 09/02/2023 - 15:00

    +5

    I wouldn't call it a positive note as this is going to crush a lot of people, Australia is already overly expensive for what it is, this is just going to make it worse.
    I don't know how valid the "keeping up with Joneses" argument is in recent years, mostly it's just couples and families trying to buy something, not maxing out loans, not overextending themselves so they can look good to others or live in X place. I don't know anyone who's trying to keep up with anyone else.
    It's just as simple as wanting to buy something to live in to try remove the instability and problems that come with renting especially as you get older.

    The fact this is such a difficult thing to do in so many cities now highlights the issues we've known for years now about Australian real estate.

    These "realistic and affordable areas" don't really exist, everything is overpriced, you can be 60-90mins from the city (Melbourne for example) and still be paying 800k-1M for a 3-4br house, that shouldn't be seen as affordable or realistic. That's not even the expensive stuff.

    Lot of people living in bubbles with harsh judgements thinking the bulk of people are living some overly glamorous life in huge properties.

    • 

      bobolo on 10/02/2023 - 00:57

      My comment was more tongue in cheek, but being in the property industry myself, I know a lot of people overstretched themselves to live in glitzy inner suburbs. Even if it means being crammed in overpriced highrise units.

      Plenty of affordable housing options in all cities

      In Melb, Weribee for example is about 30kms away from the CBD and you can pick up an average family home for around $600k - $700k or even less if you don't mind the house being a bit older. But who wants to live there right?

      • 

        91rs on 10/02/2023 - 14:47

        -1

        Yours might have been tongue in cheek but there seem to be a lot of others ITT happy there will be more people struggling which is interesting to watch.
        Usually those with little or no debt hoping others crash and burn.

        You did already highlight the issue between the post above and your reply 4 posts up if you noticed it or not.

        If you cannot afford a 6% interest rate on a $500k - $600k mortgage, you had no business buying that house to live in in the first place IMO

        &

        In Melb, Weribee for example is about 30kms away from the CBD and you can pick up an average family home for around $600k - $700k or even less if you don't mind the house being a bit older. But who wants to live there right?

        Plenty of people do, and it's the ones who've moved out there or other similar places further away to buy something that will be hit hardest with these increases when they've overpaid for lets say a $600k (midway between your $500-700k numbers provided) house at low rates.
        The same people won't be able to refinance either if their LVRs drop in the future.

        If this $500-700k figure is what's seen as "affordable", then people are telling them if you can't afford 6% on that you had no business buying that house etc, that leaves a lot of people who are forever locked out of the stability of buying \ owning a home.
        Many of those areas already have significant problems, those are going to be nothing if a lot can no longer afford to pay a mortgage or find affordable rentals after losing a house.
        Thats a huge problem.

        I still put a lot of blame on decades of TV shows showing flipping and cheap reno's sold for fortune that encouraged the wider TV watching population to do the same thinking nothing bad can happen, it really screwed our housing market in this country.

        • 

          bobolo on 11/02/2023 - 09:43

          -1

          @91rs: As far back as Western civilisation started, its never been a right to OWN a home. You have to EARN it.

          The difference now is that the people who don't own a home have a platform to complain about it online.

          If owning a home became affordable and a fundamental right for everyone, who gets to decide who lives in Point Piper and Liverpool?

          Buying a $700k home is not difficult, even if you are a low income earner. It takes a bit of saving and sacrifice to do it, just like anyone else - and if you aren't prepared or have the discipline to do that, then you actually do not deserve it above the person/couple who did

          Associating owning a home with stability is simply ignorant. Outside of owning one outright, the stability is on par with renting if not even worse. As many are realising now, not being able to pay the bank has much more significant consequences than not paying a human landlord

          There are many cultures where its the norm to rent where you live for your entire life. Attitudes need to shift in Australia and it needs to begin with people being much less entitled

          • 

            91rs on 11/02/2023 - 23:09

            +1

            @bobolo: Your first 3 lines of dribble had nothing to do with what I've said. No one's saying give everyone a house Oprah style, there has to be some barrier to entry, however in Australia its stacked up against many, but plenty manage even if it is with the assistance of family etc.

            Buying a $700k home is not difficult, even if you are a low income earner. It takes a bit of saving and sacrifice to do it

            Channeling your inner boomer? Maybe it's the "I'm in the property industry" attitude that's the problem.
            Whats low income as a threshold? $45k? Let's make it a couple, no kids, no debts (cars, credit cards, don't smoke or drink)
            45k each, 90k total, $1500 per person per fortnight after tax. Roughly $6k a month.
            Let's pretend they could get the full 20% deposit for a 700k house while renting, so only financing the balance of 560,000. Lets eliminate any stamp duties or anything else due.
            Let's go with your 6% rates from earlier, closest I could find was 5.99%.
            The fortnightly repayments come in at $1548, that's over 50% of their dual income. No bank is going to finance that.

            Associating owning a home with stability is simply ignorant. Outside of owning one outright, the stability is on par with renting if not even worse.

            Thats BS, plenty of studies linking home ownership and the stability that comes with it to far greater positive outcomes for families vs those renting.
            From safety, security, health, education and generating family wealth etc.

            There are many cultures where it's the norm to rent where you live for your entire life. Attitudes need to shift in Australia and it needs to begin with people being much less entitled

            And many of those countries are geared where renting for the long term is accepted, long term leases with stable rents, modifications to housing are allowed, many in EU countries where you have to almost fit out the house to your choosing when you move in as its bare (kitchens, flooring).

            Where as Australian LL's are more interested in making sure you do nothing to their property that indicates anyone lived there, not to mention increasing rents at any chance it can be done then sending agents through to inspect and complain that it's not perfectly clean like a show home because shock and horror someone lives there. If that's the entitled attitude you're referring to then I agree.

            • 

              bobolo on 13/02/2023 - 12:29

              @91rs: If you earn $45k a year x 2 as a household, you are not in a position to buy a property to live in. Honestly, work harder or upskill. Even forklift drivers earn on average $60k a year currently. Like I said, owning a property is not a fundamental right - but even still, for minimum wage workers, there are still plenty of options around the $500k mark or less even in Sydney. To jump from a $45k salary to a $60k+ salary is not difficult by any measure in terms of upskilling, or simply waiting to be promoted if you are starting out in your work life - it comes down to sacrifice and a little bit of effort? (to be honest not even that much). In any country, it is impossible to cater for people in the lowest percentile financially - there are many social services for that, and unfortunately, a minority will simply be left out.

              Owning a home ofcourse = stability. But ONLY if you own them outright. Outside of that, its not stable at all - if anything rate rises like what we are seeing induces a huge amount of stress for many families and after 3 months of not paying your mortgage, good luck finding a new home. The effects are significantly greater than rental increases given by landlords even by the recent "rental crisis" standards

              Your assumptions with Australian landlord/tenant relationships have clearly been influenced by mainstream media and/or triple J tripe.

              1. Rent increases in recent times although steep, are to be expected given the amount of growth and inflation we've seen in the past 10 years (especially in Sydney and Melbourne). If anything rents are simply catching up now as during most of the last 10 years, tenants have enjoyed relatively low to no increases until recently. In any single boom cycle in history, house prices always go up first, then rents will follow after.

              2. By in large, landlords will not increase rent at any chance they get especially if the tenant is a very long term tenant paying rent on time and looking after the property. If you look at most properties being sold currently with a tenant in place, most tenants are still on rents from well before the recent rental boom - many landlords have even kept them on similar rents at recent lease renewals. Any seasoned landlord will tell you that stability, lack of headaches and lack of vacancies is more important than an extra bit of money per week - and those who insist on rent increases at every renewal will soon learn that this costs them more money/pain in the long run with extended vacant periods and unhappy tenants causing dramas

              3. I am a renter myself (more of a lifestyle choice nowadays) and have secured a 4 year lease in my current place. The initial period was a 12 month as per normal, for the landlord to "test" me out as a tenant, and similarly for me to "test" the landlord out. Once content, he was more than happy for me to rent for as long as I wanted. The previous place had me on a 5 year lease as well but I had to terminate that prematurely to move into something more convenient for me circumstancially

              4. All properties for rent must meet minimum standard of livability which in Austalia is relatively high. At what extent are you looking at to "fit out" a house of your own choosing? Mine allows me to put up paintings, hang my TV on the wall - even repaint a room for the purposes of me building my own studio. The provision is always that if you leave the house, it must be returned back to its original condition (although I suspect the landlord may choose to keep it the way I did it since it looks pretty darn schmick!) Any issue I've had with my kitchen and bathrooms, the property manager send out a guy to fix. Everything functional and to my standard as well. No landlord on this planet will allow anyone to remodel their property to a tenants liking (unless it was agreed by tenant and landlord beforehand - which does actually happen often in Australia especially if longer leases are negotiated). As a landlord myself, I can only dream of a tenant wanting to stay years on end and renovate my house professionally and to an agreed taste/outcome!

  • 

    MrBillions on 09/02/2023 - 16:11

    How's that positive?

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  maverickjohn on 09/02/2023 - 13:52

  +1

  Hmmm I don't know, I saw this coming. In all honesty I have been planning my purchase of a property on the presumption it would hit 6.5 percent by end of 2023

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  CauseNEffect on 09/02/2023 - 14:08

  +2

  The next 6 months or so are going to be tough. We should see lower rates by the end of the year after the peak. In the interim, limiting spending will be a priority for many.

  • 

    Daniel Plainview on 09/02/2023 - 14:16

    Might be a case of 'shutting the gate after the horse has bolted'. As limiting spending would seem to many to be good practice even in the best of times, unless it's to generate further income - so in the early days of borrowing a large sum of money, while rates are at all time lows, it would seem logical to have pulled out every stop to try and reduce that principle sum as much as possible (assuming your loan product allows this).

    As studies show the value this has long term i.e $1 off the principle in year 1, might equal $12 in year 30 (made up but you get the point).

    So yes is a good idea to limit spending now - but I do wonder if for many the damage is already done? Ideally I'd want to get good advice, bake in some scenarios and make the best decision off that ASAP as no good compounding an error with another one.

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  kiwimex on 09/02/2023 - 16:05

  +1

  Why should homeowners bear the brunt of the inflation issues, why is the burden not being shared across the board! maybe they should lift the rate of GST

  • 

    Daniel Plainview on 09/02/2023 - 16:14

    +1

    As this article explains it's not just home loans that are affected by the cash rate increase, it's all loans from credit card rates to businesses etc. Fiscal policies do their part as well - many articles on the area:
    https://www.investopedia.com/ask/answers/111314/what-methods…

  • 

    Hearthstone on 09/02/2023 - 16:26

    +5

    what about saver and the people who doesn't have debt, why would they get close to zero rate for their life saving maybe they forgo a lot of things in life to have that saving nest eggs.

    it is what it is, it up to individual to manage their money affairs and debt level, no one is getting punished for anything
    that how modern economy and capitalist system works, you can bitch and moan about how bad it is and who and what to blame and why I get the burden but it isn't helping your situation.

    everyone need to look at their own circumstances and work out how to navigates their financial life journey rather than blame RBA, Labor, Liberal and XYZ…

    if you got too much debt reduce it, if you spend too much reduce it, if you cant afford everything they you need to cut back and go without certain stuff, a lot of thing an individual can do but I suspect many are not willing to make the tough decision. It is easier to take the easy road and blame someone

    • 

      91rs on 09/02/2023 - 20:21

      +3

      what about saver and the people who doesn't have debt, why would they get close to zero rate for their life saving maybe they forgo a lot of things in life to have that saving nest eggs.

      The same reason why people have said no one is entitled to the expectations of low interest rates or no/few rises that impact their loans. What makes them entitled to higher returns for minimal to no risk?
      Everything has some level of risk, I see higher value in people being able to service their mortgages (for the country / state / city) Vs the fewer with huge piles of cash sitting doing nothing that want high returns for no risk.
      If you want growth from your life savings then it needs risk, usually via investing.

  • 

    Donaldhump on 12/02/2023 - 19:41

    Increasing gst increases inflation and can’t be implemented overnight, and also only affects people who buy lots of stuff.

    Get you point though I’d say Increase upper tax brackets a bit but gov is doing opp and lowering them , as ppl with no mortgage and a good salary are unaffected

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  Juice-Wa on 09/02/2023 - 16:42

  I guess next GFC is in the air then. More clueless people taking out loans they couldn't have dreamed of affording before covid. People who are worried about loosing their homes on the current interest rate shouldn't have had them in the first place.

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  hdog on 09/02/2023 - 19:09

  +1

  Isn’t the real question where are people supposed to live when both mortgage or rent are being defined by external factors to become so much of take home income? We can’t all live in the middle of nowhere or with our parents, can we?
  Personally, I am lucky to be a high income earner but supporting a family and have a large hecs debt. Our mortgage is smaller than average for a three bedroom house in regional Victoria. Even with the increases, our mortgage is still less than rent for comparable houses right across the greater regional area.
  Once my tax and hecs come out, I’ve got about 65% of my wage left, and the mortgage is getting toward half of that, for a smaller than average mortgage that is cheaper than rent.
  Grateful to have what we have and acknowledge that we are so privileged to have both an income and a mortgage, but I can’t get past the thought of even if we sold our house then the rent would be a comparable expense anyway? Unless I relocate my family to the middle of nowhere where there are also less economic opportunities?
  We aren’t living beyond our means and haven’t taken out a million dollar mortgage in a fancy suburb, but it’s creeping up for sure.
  Partner cares for kids during the day and works a casual job a few evenings - that extra income below tax free threshold, and not paying for formal childcare, are the differences for us at the moment.

  • 

    TEER3X on 09/02/2023 - 20:21

    Sounds like you are already in the middle of nowhere.

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  meoden1005 on 09/02/2023 - 20:20

  Another 0.25 next month. I think RBA will try to get to 4 on hold to see what happen.

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  stemcell on 09/02/2023 - 20:22

  stupid dripping it in, just go a full 2% and get the pain over with

  • 

    jjacob on 09/02/2023 - 21:53

    True, but that shock could destabilize the economy.

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  jjacob on 09/02/2023 - 20:36

  +2

  Just for context, here are central bank rates from a few countries

  USA - 4.5%
  Canada - 4.5%
  UK - 4%
  EU - ~2.5%
  China - 3.5%

  • 

    Trying2SaveABuck on 09/02/2023 - 20:45

    +1

    i think US, UK and Canada have 30 year fixed loans…i dont know about China

    • 

      Blokeinhisundies on 12/02/2023 - 06:24

      UK and Canada are similar to Australia. Neither have multi decade fixed rates like America

  • 

    DarkOz on 10/02/2023 - 08:01

    +3

    USA - 4.5% Vs 6.5% inflation dropping for 6 months and peaked at 9.1%
    Canada - 4.5% Vs 6.3% inflation dropping for 7 months and peaked at 8.1%

    UK - 4% Vs 10.5% inflation plateaued for 6 months and peaked at 11.1%
    NZ - 4.25% Vs 7.2% inflation plateaued for 12 months and still at peak

    AU - 3.35% Vs 7.8% inflation and rising

    Every country wants a soft landing but I think Australia missed it. The RBA was too late to start increasing interest rates and then increased it too little. Now we are going to bleed harder and for longer. If inflation stays high or keeps rising over the next 3 - 6 months then we are in for a bumpy ride.

  • 

    acersaurus on 10/02/2023 - 09:24

    It is relevant for context, but also relevant is that Australia has more expensive housing than most of those places and so in theory should be more sensitive to interest rate rises. Canada is similar though and a few places in the EU are similar or more expensive (e.g netherlands).

• 

  da1andonly on 09/02/2023 - 22:55

  -5

  If you're worried then it's time to move back in with your parents

• 

  [Deactivated] on 09/02/2023 - 23:01

  The only reason it's risen so many times is because they keep raising it by the smallest possible margin. Shutting down the whole world for two years, and printing more money that has ever existed, has inevitably lead to inflation, although Russia and Ukraine didn't help either. Put together with historically low interest rates, and yes, this was inevitable. Expect it to continue.

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  dmcneice on 09/02/2023 - 23:24

  +6

  I'm definitely in the screwed camp. Moved to the GC (where family is) as partner was miserable without anyone around and young kids. Bought Jan 2022 (just before talk of inflation really kicked off). My loan is 1.2m, 90% LVR. Took me about 7 years of saving for the deposit.

  Repayments gone from 4.3 to about 7.5k/month, which is currently 75% of take home after tax. Obviously it's gonna increase (I reckon a lot more than they are predicting, everything at the supermarket is jumping 20 to 50% in the past month).

  Got about 25k left in savings which might get me though to the end of the year but I'll be done then, repayments will probably be above 100% by then.

  Cant sell either as house price is just under the loan amount. Tbh bankruptcy looks like the only way out. O well least inflation will be fixed.

  • 

    klonky on 10/02/2023 - 07:05

    +3

    Wow. Your repayment is more than our household income

  • 

    acersaurus on 10/02/2023 - 07:16

    +1

    Sorry to hear.. Bad luck and pretty awful.

    Looks like you have 3 options - stay there and hope it gets better, sell and try to pay off the loan and thirdly bankruptcy. There are some consequences to bankruptcy so if you are considering this as a current or eventual option look into these. It's a hard choice, take care of yourself and get counselling if it all feels too much.

    At least you still have a good income (you must to have gotten that loan), could potentially give you a decent quality of life as a renter - hence you aren't screwed, but it's a harsh setback. If you need to sell you could probably save for a practical (not flash) property not that much later for half of what you paid e.g 10/20 Fairway Drive, Clear Island Waters, Qld 4226 https://www.realestate.com.au/property-unit-qld-clear+island…

    • 

      dmcneice on 10/02/2023 - 08:27

      Yeh income is good, but still not near enough. I don't know what's worse, bankruptcy or being stuck with 100-200k of debt having to pay that back. I will try to ride it out for a bit but the longer it goes on the risks increases.

      • 

        acersaurus on 10/02/2023 - 08:50

        +1

        You could weigh it up by judging the income impact of bankruptcy, but also consider the other consequences.

        The price your house eventually sells for (if you sell it) might be a key factor.

        I would seriously do a detailed analysis of the pros and cons of each option soon. 75% of your income on housing is extreme.

        • 

          dmcneice on 10/02/2023 - 10:03

          @acersaurus: Your telling me. It was about 40% when we bought, but within a year this has happened. Goes to show how useless those serviceability buffers are, we are already above what the bank assessed me as being able to pay. If it stopped here I could make it work but I think it could go up another 2 to 3% yet.

    • 

      RotundPolarBear on 12/02/2023 - 14:54

      +1

      A fourth option would be to rent it out and rent something else much cheaper for themselves to live in (or move in with parents).

      • 

        Shutterfish on 13/02/2023 - 00:32

        +1

        This is probably the best option as op can negative gear the property to get some tax benefits.

  • 

    Killerbala on 10/02/2023 - 10:45

    +6

    Not financial advise but its wise to sell now than waiting to see if it explodes on the face.

    • 

      Hallaj on 11/02/2023 - 14:21

      +2

      This advice must be taken seriously by ppl in hot waters right now. Same advice was valid and better six months ago. Alot of ppl will eventually come to this realisation probably in second half of this year but that would be too late.

    • 

      OpenAI on 12/02/2023 - 10:51

      Prices are still high from the auctions I went to so yes sell now if you're in trouble.

  • 

    jjacob on 10/02/2023 - 12:47

    Sorry to hear that bud. Honestly, when I came to Australia in 2014, I knew something was not right when your average 3bd home had to be auctioned. Much like a Picasso or a Ferrari F40. Since I'm in Perth, lucklily market is not that crazy.

    • 

      dmcneice on 10/02/2023 - 14:19

      Luckily in im in a profession where i can get a 2nd job. I already work 5 days, but I can (and am in the process) of getting a 2nd job on the weekends. The question for me though is, thats not sustainable for me to keep up long term. I could ride it out a while, but I cant keep that up for 30 years (the life of the loan)

      • 

        Parasite on 10/02/2023 - 17:38

        Assuming you are the sole income earner from the info you have provided your income is somewhere circa $180k a year.

        Working that second job just to give the government another 45 cents in the dollar doesn't sound like much fun either.

        • 

          dmcneice on 10/02/2023 - 19:03

          @Parasite: You'd be correct, and it's a bit more after you factor in Medicare levy, travel etc. But that's life, my job there's no way to minimise tax.

  • 

    devize on 11/02/2023 - 01:25

    +1

    Try get a fixed 12/24 month loan that you can still service? By the time the fixed period is up you'd hope rates have started coming back down and you can refinance again.

    Or rent your place out and rent something else cheaper?

    Tbh the current interest rate is still historically low, it really is poor judgement on individual's behalf by not factoring in their ability to service a loan at historically average interest rates. COVID rates were ridiculously low.

  • 

    teamfletch on 12/02/2023 - 15:21

    +1

    Would an interest only loan be a consideration? Might help you stay on top of repayments in the short term.
    Not something I’ve ever looked into before so I don’t understand whether this would be a completely ridiculous idea or not.

• 

  Thaal Sinestro on 10/02/2023 - 04:34

  +6

  Good on you RBA. Keep increasing interest rates until we hit 10%. Imports will be cheaper (due to appreciation of the Australian dollar), saving money will be rewarded, housing prices will drop.

  • 

    Ghost47 on 10/02/2023 - 15:26

    +1

    Agreed. By lowering rates the RBA punishes people who do the right thing by saving their money. Sadly people who go out and borrow idiotic amounts of money for the overinflated housing market (essentially betting on houses) are protected, but that’s Straya for you.

• 

  klonky on 10/02/2023 - 07:08

  +1

  I think we are all forgetting the single largest contributer to inflation which is indiscretionary spending. I'm not going to say it's ALL Ozbargain's fault, but…..

  • 

    Daniel Plainview on 10/02/2023 - 08:17

    Indiscretionary spending is in simple economic parlance 'NEEDS' e.g food, housing, electricity
    OzB is definitely more discretionary spending e.g New Balance shoes, Victorinox serrated knives and of course Eneloop AA's

    So I don't think OzB wears much blame, but I would think it's a handy reminder of the Western problem of spending on non-essential items, as they often say themselves words to the effect of ,"Thanks OP, didn't need but bought anyway"

• 

  wots on 10/02/2023 - 09:14

  Australia's current rate is still low, expect at least 4.5%.
  New Zealand is currently at 4.25%, US is 4.75%. EU is at 3% with more hikes announced.
  This is a global economy!

• 

  ChatCPT on 10/02/2023 - 09:52

  +5

  If youre feeling the pinch - sell

  You didnt complain when prices went up 30% "once in a generation capital gains"
  Now dont complain when the opposite happens (hasnt actually dropped anywhere near that upswing)

  • 

    Ghost47 on 10/02/2023 - 15:31

    +6

    “Homeowners”: “We have it so hard with these rate increases! The rates on our three IPs and PPOR have all gone up! We’ve had to start buying home brand sugar and start limiting our daily lattes to one a day! Property is a sure fire investment that doubles every 7 years, why is this happening?”

    Renters: stand in line with dozens of other people trying to score a rental as if it’s a job application, some even now living in tents, some moving into sharehouses with strangers, some moving back in with parents, some being closely monitored by landlord who pretends to be a tradie

    It’s not hard to tell who has it worse, people who think “homeowners” (“debt owners” in fact, a house is not owned until it’s fully paid off) have it worse are extremely deluded, and those people who think that are in fact the ones who are actually entitled.

    • 

      ChatCPT on 10/02/2023 - 17:03

      +2

      bloody greedy b***
      hope something gets em!

• 

  Killerbala on 10/02/2023 - 10:40

  -5

  Sheep's who bought in to massive amounts of debts are ready for slaughter.

  • 

    Daniel Plainview on 10/02/2023 - 11:14

    +5

    @killerbala , I'm all for folks being accountable for their own personal finances, but this wording is over the top & hardly constructive, don't you think?

    • 

      Killerbala on 10/02/2023 - 21:32

      -1

      Do you honestly believe our population is accountable in housing market ? If it’s true we won’t be paying 2 million for a shoe box. Sheep’s need to come to reality, so life can improve for all.

• 

  Top G on 10/02/2023 - 13:40

  +5

  Oops I negatively geared 5 properties and now tenants can't keep up with interest rate hikes, and prices are plummeting. My bad for speculating

  • 

    Ghost47 on 10/02/2023 - 15:35

    +4

    Don’t worry the government has opened the doors for more immigrants to solve our “skills shortage”, which in reality is actually “skills for paying off investment properties”, which when you think about it, landlords sorely lack which IMO is not so ironic.

• 

  Hotross on 10/02/2023 - 15:52

  +12

  i bought my house end of 2021
  The bank would have given me up to 700K by myself

  i didnt take it, i bought a small townhouse in a less affluent suburb well within my means and my loan was 240K
  i fixed the loan at 2% and it will stay that way till end of 2024
  I could afford to live alone but i got a roommate to help service the loan.
  I earn well above the median wage in Australia
  I dont go out, i have no debt, My car is paid off and my journey to work is 15 minutes.

  I have done everything correctly, Every smart move to be financially secure and personally responsible and you know what it (profanity) sucks

  Please dont preach personal responsibility because it is likely i am more responsible than anyone else out of anxiety and im telling you that the level of responsibility you are talking about is a half life for anyone who doesn't enjoy chicken, broccoli and rice while watching YouTube every evening.

  Just in case anyone is worried, i have friends and a partner, i have two cats and hobbies and a fulfilling life but i am boring AF and anyone who isnt a extreme introvert would die like this.

  • 

    [Deactivated] on 10/02/2023 - 23:07

    +1

    Fifo worker I reckon.

  • 

    drprox on 11/02/2023 - 14:00

    +2

    I'm confused about why you request people don't preach personal responsibility. Sounds like you're doing fine.

• 

  MrBillions on 10/02/2023 - 15:56

  +1

  Lunatic RBA needs to adjust inflation targets…not everything works as per text book… Philip you're killing the economy. I know you're sorry the Australian people listened to you

  https://youtu.be/uJGUywNCZ1g

  • 

    Daniel Plainview on 10/02/2023 - 16:01

    +2

    You'll have to forgive me but folks on OzB implying their know how to manage our nation's monetary policy better than the RBA is like videos of the Ukrainian War, where seemingly every other person who owned a copy of Call of Duty feels they can from their Nana's basement point out all the errors soldiers are making in their squad tactics & weapon selections.

    Alas I for one don't pretend to know better for either - so @MrBillions do tell whats your level of training or education as it applies to this area?

    • 

      MrBillions on 10/02/2023 - 16:12

      -2

      None…and it is not my job but I'm expressing my dissatisfaction with how this all is managed.

      Sending clear messages to the Australian people of no rises until 2024 and then telling them they shouldn't have listened is just plain bullshit and not taking responsibility. Own up to it and fix it.

      They had one job…

      • 

        Daniel Plainview on 10/02/2023 - 16:59

        Appreciate your honesty.

      • 

        sakurashu on 10/02/2023 - 20:11

        I didn't believe the "no rises" for a second and it should never have been said - agree with you there.
        Despite that, there is nothing else that can be done given the global economy and continuing to raise rates is the correct decision for our economy.

  • 

    acersaurus on 10/02/2023 - 16:21

    +1

    The RBA is under a review at the moment - as are many central banks and plausibly the inflation target will be adjusted, but it's more likely to be to a range of 2% to 4% than something overly radical. Or it might not change - we will see.

    Here is an article about the possibility. You can read part of it before it tells you to sign up https://www.economist.com/special-report/2022/10/05/policyma…

• 

  peekabooo on 10/02/2023 - 16:39

  -1

  I want the property prices to come to affordable level. I don't care if the interest rates are 20%.

  • 

    dmcneice on 10/02/2023 - 19:06

    +3

    Id say over half the country would default if interest rates were 20%

    • 

      MrBillions on 10/02/2023 - 19:27

      +2

      I will fold at 10%
      Things were sweet last year where the rental income covered more than the repayments…. All going too fast without warning

      • 

        helpme on 11/02/2023 - 09:18

        +2

        Good, rental income should not cover more than repayments. Otherwise they might as well just own the house.

  • 

    Wasabi Ninja on 10/02/2023 - 20:09

    Will never happen. When house prices fell in the USA, so did jobs and with few jobs wages decreased. If people can’t afford housing now, they never will. Either have to move state or county if they want to become home owners.

  • 

    RotundPolarBear on 12/02/2023 - 14:56

    I feel the same, but you are getting downvoted because the majority of people are homeowners, so they don't like this take.

    • 

      peekabooo on 12/02/2023 - 14:58

      I am homeowner too. Just want it to be affordable for everyone.

      • 

        RotundPolarBear on 12/02/2023 - 14:59

        +1

        I am also a homeowner, hah. And I agree with you. Prices are out of reach for younger generations.

• 

  Wasabi Ninja on 10/02/2023 - 20:04

  +1

  If you’ve over extended yourself without thinking rates would go back to 8% that’s on you.

  • 

    MrBillions on 10/02/2023 - 21:56

    -3

    no it's not…i foolishly listened and trusted the man…

    • 

      Wasabi Ninja on 11/02/2023 - 03:14

      Yeah foolishly listens to the man means it’s on you for being foolish 😂

    • 

      RotundPolarBear on 12/02/2023 - 14:57

      Everybody's an expert in hindsight.

• 

  MrThing on 10/02/2023 - 20:46

  +2

  Inflation is just our good friends on big business profit taking … wages have hardly increased to justify their price rises.

  Look at the obscene profits of multinationals like shell, chevron, bp, exxonmobil at a time when fuel and energy prices are at all time highs

  Were been taken for mugs

• 

  AustriaBargain on 10/02/2023 - 21:53

  +3

  Australia's housing market is worth 10 trillion but our GDP is only worth 1.5 trillion, so yeah this sounds about right. You don't conjure up TRILLIONS of dollars in "value" PER YEAR out of thin air and not expect the RBA to pull the brakes on lending.

• 

  [Deactivated] on 10/02/2023 - 22:58

  Inflation makes the debt look smaller. Post covid debt was quite high, so they will certainly try to inflate it away and people will have to bear the burden of inflation and higher interest rates at the same time. Some say that we are going to enter stagflation i.e high unemployment with no growth and inflation.

• 

  congo on 10/02/2023 - 23:41

  I don't understand why house prices in Sydney/Melbourne is so expensive?
  Is there shortage of suppy? Is it becuase of negative gearing? Is it becuase the state is not releasing more land?

  • 

    Trying2SaveABuck on 11/02/2023 - 08:35

    +3

    if we are talking Victoria

    if we are being honest tradies are paid too much the cost of new houses is incredibly expensive for poor quality work

    thus to build a new house might cost you 700k-1m in the new outer suburbs so established areas will generally more expensive then new ones if we talking about the suburbs surrounding the CBD

    • 

      congo on 11/02/2023 - 09:53

      -1

      $700K-$1M for a new house? That crazy!
      For that price, its easier to buy an old house and spend $50K to renovate.
      I recall Granny flats were about $150K pre-covid. $1M must be for a huge double storey mansion.

      • 

        MessyG on 11/02/2023 - 10:28

        Renovations in Melbourne cost hundreds of thousands now…one person I know was quoted a mil :/

        • 

          congo on 11/02/2023 - 10:55

          +1

          @MessyG: $1M for reno, that crazy !!!
          When I was a kid, if you won $1M in the lotto, you would be rich for life.

• 

  [Deactivated] on 11/02/2023 - 09:12

  Tell the public that we will solve the problem, get voted for solving the problem. Do nothing, collect paychecks while everyone suffers. No one can fire you anymore. Wait for the next election…Repeat.

• 

  Blargman2001 on 11/02/2023 - 10:51

  +2

  I don't believe the economist saying there will only be two more rate rises. Inflation is being driven by a mix of external and internal factors that aren't going away by May 2023. The mortgage pain isn't going to be ending this year.

  • 

    MrBillions on 11/02/2023 - 14:20

    +2

    The truth is nobody knows

    • 

      Blargman2001 on 11/02/2023 - 22:46

      That's true, no one knows when this will end. However I don't see the following sorting itself out by end of 2023:
      -Fuel prices will continue to remain high as long as Putin is on his adventure in Ukraine.
      -Companies will not suddenly stop price gouging us by using the above excuse for as long as possible.
      -Huge increases in worldwide industrial production post-covid have caused supply chain issues with raw materials, interrupting further production. This gives rise to the shortage of finished goods and the supply chain crisis we are having right now.
      -Labour shortages in Australia are causing the wages of skilled workers to rise the fastest since 2012.
      -Aussies will continue to spend their saved up Covid war chest and newly negotiated wage increases on above mentioned, price inflated items (which are also in short supply) by bringing forward future purchases to today in fear of future inflation, causing companies to price gouge us even further.
      -The stock market as a whole is a bit flat so people are actively looking for alternative assets that aren't crypto to buy, driving up everything else.
      Have a nice 2023.

• 

  spychiatrist on 11/02/2023 - 12:52

  +2

  Stop buying unnecessary stuff to curb inflation. Also, call out price gouging (not a fan of ABC but they have an article about businesses raising prices because Aussies will buy them anyway). Case in point, a Casio Classpad calculator that's made obligatory for high school students…$250. Really? $250 for a calculator?

  • 

    Trying2SaveABuck on 11/02/2023 - 14:19

    im assuming it was a 'cas-caluator' which is required for maths methods [CAS] in which case parents dont have much of a choice….

    im with you with the abc there journalism crap

    • 

      Daniel Plainview on 11/02/2023 - 16:31

      Not to go off tangent but considering the Govt places all manner of restrictions on them - both the ABC and SBS have outstanding journalism & content (IMHO anyway - understand this is a personal choice).

      Especially when you consider what they're mandated to do, provide cover as govt owned broadcasters - and they run on an absolute pittance compared to their commercial rivals.

      Agree completely with @spychiatrist on stopping buying 'unnecessary stuff' to curb inflation - though as pointed out a lot of the current inflation is stemming from non-discretionary spending e.g power, fuel, food.

      $250 for a caculator sounds a lot but from what I've seen with folks and their kids, $250 is a sparrows far in a cyclone of spending thats largely 'want' based but seen as part and parcel of modern life.

• 

  jakeau on 11/02/2023 - 15:54

  OP overcommitted.

  • 

    Top G on 11/02/2023 - 18:57

    Didn’t pull out in time. F

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