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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


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BFCSA: Aussie Banker Oliver desperate to say No Housing Problem - the one they created!

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Why are we talking of Bank Driven Liar Loans, Secret Interest Only Scams, Low Doc toxic mortgages markets, property bubbles, housing crashes, highest debt in the world.......................if there is no problem???  Answer: The threat is real. Bankers running Ponzi Financing Scams and yes, we read daily all the warning signs are in place like ducks on a wall.  Here is another “we see no problem” article..........


How close is the property bubble to bursting?

Smart Property Investment12 October 2017

Sasha Karen


With a steady stream of warnings about the property market entering a downturn nationwide, one expert claims analysing when the property market will crash is a complex issue, and explains what the bottom line is for investors.

Dr Shane Oliver, head of investment strategy and chief economist of AMP Capital, believes the narrative of the Australian housing bubble has been pushed forward by discussions of tax breaks, low interest rates and liar loans towards mortgage stress, which will lead to a bubble burst.

However, Dr Oliver pointed out this view is nothing new and these concerns and as such should not be a major concern.

“The trouble is we have been hearing the same for years. Calls for a property crash have been pumped out repeatedly since early last decade,” Dr Oliver said.

Just by looking at “the basic facts on Australian property”, of property being expensive relative to income and global standards, poor levels of affordability and price surges leading to debt surges taking the Australian household income to debt ratio to the high end of OECD countries, Dr Oliver claims this makes “residential property Australia’s Achilles heel”. Yet, this does not necessarily indicate a crash.

Dr Oliver gives five reasons why:

1. Generalising can be dangerous

When someone refers to the Australian property market, Dr Oliver stressed it is important to consider that there is not one overall property market, but breaks down to, at the very least, eight states and territories.

Looking at CoreLogic data over the last five years, Sydney and Melbourne saw dwelling price rises of 11.4 per cent and 9.4 per cent respectively, while Brisbane, Adelaide, Hobart and Canberra rose anywhere between 3 per cent to 5 per cent, and falls were recorded in Perth and Darwin. [These would be the average  per annum numbers, not five-year total as implied. –RJB]

“Australian cites basically swing around the national average with prices in one or two cities surging for a few years and then underperforming as poor affordability forces demand into other cities,” Dr Oliver said.

2. Supply has not kept up with demand

Due to an increase in net migration, Dr Oliver pointed out how population growth over the last five years was an average at 386,000 people per year, compared to 218,000 people over the decade to 2005, requiring additional 55,000 homes.

“Unfortunately, the supply of dwellings did not keep pace with the surge in population growth … so a massive shortfall built up driving high home prices,” Dr Oliver said.

“Thanks to the recent surge in unit supply, this is now being worked off. But there is no broad based oversupply problem.

“Consistent with this, average capital city vacancy rates are around long-term average levels, are low in Sydney and are falling in Melbourne (helped by surging population growth).”

3. Lending standards are improving

Despite conversations about “liar loans”, Dr Oliver said lending standards in Australia are relatively stable compared to what other countries have seen prior to the GFC.

Interest-only loans are growing, but not at the rate of what Dr Oliver refers to as “NINJA (No income, no job, no asset) sub-prime and low doc loans”, which has seen a dramatic rise in the US prior to the GFC.

Today, Dr Oliver said interest-only and high loan to valuation loans are in decline, with the increase of debt going towards older, more affluent Australians who are in a position to repay those loans.

In regards to surveys reporting high levels of mortgage stress, Dr Oliver pointed out that over the last decade, surveys also said there were high levels of mortgage stress back then, and no crash occurred.

4. Tax breaks are exaggerated

While tax breaks and foreign buyers have had a role in the current property climate, Dr Oliver said their importance is actually exaggerated in relation to the shortfall of supply.

“While there is a case to reduce the capital gains tax discount (to remove a distortion in the tax system), negative gearing has long been a feature of the Australian tax system and if it’s the main driver of home price increases as some claim then what happened in Perth and Darwin?” he said.

“Similarly, foreign buying has been concentrated in certain areas and so cannot explain high prices generally, particularly with foreign buying restricted to new properties.”

5. Crash conditions are not in place

Most importantly, for a crash to occur, high levels of unemployment interest rates and supply are all required, which Dr Oliver cannot see happening any time soon.

“There is no sign of recession and jobs data remains strong, the RBA is likely to start raising interest rates next year, but it knows households are now more sensitive to higher rates and will move only very gradually – like in the US – and won’t hike by more than it needs to … keep inflation on target [, and] property oversupply will become a risk if the current construction boom continues for several years but with approvals to build new homes slowing this looks unlikely,” he said.

“Don’t get me wrong, none of this is to say that excessive house prices and debt levels are not posing a risk for Australia. But it’s a lot more complicated than commonly portrayed.”

The current state of play

With all of this in mind, Dr Oliver said that there is still an expectation of a slowing in Sydney and Melbourne markets with APRA measures of slowing down investor lending proving to be working.

“Expect prices to fall 5 [to] 10 per cent (maybe less in Melbourne given strong population growth) over the next two years. This is like what occurred around 2005, 2008-09 and 2012,” he said.

“By contrast, Perth and Darwin home prices are likely close to the bottom as mining investment is near the bottom.

“Hobart and increasingly Brisbane and Adelaide are likely to benefit from flow on or “refugee” demand from Sydney and Melbourne having lagged for many years.”

The bottom line

The takeaway for investors, Dr Oliver warned, is that of being careful while proceeding to invest.

“Housing has a long-term role to play in investment portfolios, but the combination of the strong gains in the last few years in Sydney and Melbourne, vulnerabilities around high household debt levels as official interest rates eventually start to rise and low net rental yields mean investors need to be careful,” Dr Oliver said.

“Sydney and Melbourne are least attractive in the short term. Best to focus on those cities and regional areas that have been left behind and where rental yields are higher.”



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