Wednesday, March 9, 2011

Australian Home Loans to Fall Between 27% & 41%

 Australian Home Loans to Fall 27% & 41%

Story on ABC News {9/03/2011.. ..}..

ABS Data shows home loans fell 4.5 per cent from Dec 2010 to Jan 2011.


BUT THE ACTUAL FALL WAS 4.5% ... {4 x Forecast!!!}

Anybody hear warning Bells?... 

Loans for investment housing also slumped 6.8 per cent in January 2011....
Forecasts for this were a fall of 1.5% {4 x Forecast!!!}

So how would these numbers translate over a 12 month period? .....

It would be too simplistic  just to take a number & multiply it by 12 month, Jan 2011 could have been a one off or perhaps it was the "FLOODS" or "STORMS"

{ Nov 2010 it was the Grand Final Replay to Blame ??? You have to laugh!!}

Lets be more conservative & say it is only half as bad as the January 2011 numbers would indicate??? ... Lets use half the fall as a conservative benchmark to work with?

So we will use  2.25% fall in home loan rates for Jan 2011 for Owner Occupiers & a 3.4% fall in home loan rates for investor loans for jan 2011.

Well that would work out to Home loans for owner occupiers dropping a further 27%  in the next 12 months & for Investor Loans a fall  41% in the next 12 months ...

Now keep in mind the December 2010 numbers for both groups were already down by 30% for the year {Jan 2010 - Dec 2010} ...

So if you had a starting number of 100 in Jan 2010 less 30% fall = 70 by Dec 2010 & then they dropped a further 27% = 51 or a reduction of 49% in home loans for owner occupiers in a 2 year period (Jan 2010 - Dec 2011) & a reduction of investors loans in the same period of 59% ...

Remember this is CONSERVATIVE  taking into account only 50% of ACTUAL Jan 2011 trend!!


So what would this do for property prices? ....

You would have to believe in the tooth fairy if you think somehow we are going to have a
"SOFT LANDING" or prices will "PLATEAU" for 2-3 years.

Property Speculators (They like to think they are investors) will do what they did in the USA dump property & put their money in safer areas.

True investors are not fools. They know what is ahead.

Property Speculators need you to catch a Falling Knife.

Just don't play the role of the "GREATER FOOL" they will be relying on to offload their overvalued properties onto!!

If you agree & think that our markets are crazy or innocent people are going to suffer. 
Do something circulate a link to this site & look at some of the other posts or topics I have put up. 
Spread the word on Facebook / Twitter or Just discuss around the Water cooler at work. 
The better people are informed the sooner we have a sensible property market for our friend & families!! 

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