Click on our Secret Library of Evidence ------>

    BANKILEAKS Secret Library

Loan Application Forms (LAF's)  

    Bank Emails to Brokers  

    Then Click on 'VIEW NOTEBOOK'

Join us on facebook

facebook3           facebook2 


What BFCSA Does...

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.


Articles View Hits

Whistleblowers' Corner!

To all mortgage brokers, BDMs and loan approval officers! 
Pls Call Denise: 0401 642 344 

"Confidentiality is assured."

Cartoon Corner

Lighten your load today and "Laugh all the way to the bank!"

Denise Brailey

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

Click on the Cluster Map.

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Login
    Login Login form

BFCSA: Collapse of APRA’s property bubble has started—Glass-Steagall now!

  • Font size: Larger Smaller
  • Hits: 606
  • Print

Citizens Electoral Council of Australia

Media Release Thursday, 2 November 2017

Craig Isherwood‚ National Secretary

This email address is being protected from spambots. You need JavaScript enabled to view it.">This email address is being protected from spambots. You need JavaScript enabled to view it.


There are signs that the inevitable crash of the housing bubble that will collapse Australia’s banking system is starting. Investment bank Citi is warning that housing price declines of up to 20 per cent will potentially lead to an 80 per cent collapse in residential sales. “When the market cools, it freezes—peak to trough volumes can decline as high as up to 80 per cent”, Citi’s David Lloyd said, as quoted by ABC business reporter Stephen Letts on 26 October. “One industry contact puts a 90 per cent probability on a 10-to-20 per cent decline in house prices in the next 12 to 24 months”, Lloyd and his team wrote in a note to investors.

A much bigger crash seems more likely when considering the long-term dwelling price-to-income ratio. And business columnist Robert Gottliebsen from The Australian on 26 October indicates that such an enormous crash has already started. “The apartment land market in many areas of Sydney is in chaos. About a year ago prime apartment land in Sydney (with approvals) was selling between $350,000 and $400,000 per apartment that could be developed on the site. Now anyone who bought that land would be lucky to get $280,000 and the desperation of highly leveraged selling and the lack of buyers can result in some land going for $230,000 per apartment—a fall of above 33 per cent. The losses are sickening”, Gottliebsen opined.

“On an off-the-record basis one of the most influential property analysts in Sydney is forecasting that the building rate of apartments in the city is set to fall by at least 50 per cent which will have a severe downward flow on to economic activity in Australia’s biggest city”, he added.

The following day Gottliebsen in a follow-up article wrote: “Melbourne apartments are also falling [along with Sydney] in a glutted inner city market. Small inner city Brisbane apartments are already down more than 25 per cent. And, despite the Reserve Bank holding or reducing official rates there could still be interest rate pressure. US interest rates are rising which will boost banks’ overseas borrowing costs and the dollar is in free fall.”

As of Sunday 29 October, the national property market marked its 22nd week with a clearance rate below 70 per cent. Of the 2,471 homes that went under the hammer across the nation at the weekend ending 22 October, 69.4 per cent sold, according to preliminary CoreLogic data. This time last year, there were 2,680 homes and a clearance rate of 78.1 per cent.

Interest-only loans make up more than 40 per cent of loans in the market. What will happen to these mortgage holders when the property market crashes? And even those without a mortgage will be hit hard given the enormous flow-on effects of what is shaping to be the biggest property collapse in Australia’s history.

Stockland chief executive Mark Steinert raised concerns at the 18-20 October Property Council of Australia Congress in Cairns. “Housing is the largest asset class in the country—it’s $7.5 trillion in savings so if you destabilise it you will put this economy into a recession—it’s absolutely guaranteed”, Steinert said. Stockland is one of the largest diversified property groups in Australia with more than $16.6 billion of real estate assets. “We have 1,000 homes under construction and prices have gone up 10 per cent with civil work prices gone up 15 per cent plus in the last 12 months. So construction costs are starting to come through as another challenge and it will have a ripple effect,” Steinert added.

ANZ boss Shayne Elliott, revealing the bank’s 18 per cent rise in full-year profit to $6.9 billion on 25 October, said high household leverage is a concern for Australia. The bank is “watching it like a hawk” and “we don’t want to be complacent about it”, he said. On the same day Australian Prudential Regulation Authority (APRA) chairman Wayne Byres told a Senate committee in Canberra he’s concerned some borrowers have not fully considered the impact of rising interest rates, and future wage growth may not eventuate to help retire borrowings. He urged bankers to exercise caution as there are “a lot of things that seem at extremes”. “Household debt levels are very high relative to household income in particular … and is still on an upward trajectory”, Byres said. He added that interest rates “are at historically low levels and household income growth is actually relatively subdued, so the idea that people will pay their debts off in the future just because their income will grow strongly is not an assumption you can necessarily make.”

The RBA appears concerned about investor complacency. Its Financial Stability Review for October 2017 reports that the “combination of low compensation for risk and low expected volatility—in addition to low risk-free rates—suggests that some investors may be underestimating the downside risks they face”. It continues: “This could lead to a further build-up of risks and could also increase the likelihood that an adverse shock would lead to a sharp and disruptive correction in asset prices.”

The RBA report also alluded to international risks: “Indebtedness and asset prices have also risen further in some countries, from already high levels, increasing the risk of a disruptive correction.”

It is at the point that financial authorities like the RBA are concerned that the international counterparties to the Australian banks’ $36.7 trillion in derivatives deals may cut and run: “implementing measures to address cross-border resolution issues will be a priority over the coming year”, the RBA report states. “This includes the adoption of cross-border cooperation agreements between authorities, and ‘resolution stay protocols’—which help prevent cross-border over-the-counter (OTC) derivatives contracts from being terminated disruptively in the event of a foreign counterparty entering resolution.”

This is one of the objectives of the government’s bill to give crisis management powers to the bank regulator APRA, even though APRA is responsible for the looming crisis, because it deliberately encouraged the banks to create the housing bubble through excessive lending on mortgages at the expense of the rest of the economy. This bill must be dumped, and instead the government must implement the CEC’s proposal for a Glass-Steagall separation of the Australian banking system, and cancel all commercial bank derivatives, so that the property crash doesn’t bring down the banking system with it.


Click here to sign the CEC’s new petition: Global crash coming—Australia needs Glass-Steagall and a national bank! 

Last modified on
Rate this blog entry: