An hidden danger in Australian real estate

Posted: January 18, 2018 in Uncategorized

I picked up and interesting and unknown fact in my news feed.

 

In the next 4 years there will be AUD60bn of interest only loan to be refinanced.

Due to the more stringent rules for the bank capital most oif them will have to be transformed into capital and interest – increasing the cost for the real estate investor and decreasing the tax deduction.

Moreover, there is an estimated 20% of “liar loans” (where people declared financial positions different from the reality and the banks closed their eyes).

This fact will add a new downward pressure on real estate and on consumer spending (higher loan repayment- less money to spend).

A little policy mishap could really spell the end of the Australian real estate fantasy (that houses are the only secure investment).

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s