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aussieboy

Uk/us Vs Anz - Similarities And Diffferences

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Similarities

- High PE

- Prices have grown rapidly in some areas

- Rise of the mortgage brokers

- Low doc loans became more popular

- Immigration given as reason for price inflation

- Inflation going up / gone up (not sure what it will be like once oil shock was worked its way through)

Differences

- No change in buyers' business model (no sudden appearance of BTL)

- Less reliance of lenders on securitisation model

- Insurance always required for LVR >90%

- I have never seen / heard of >100 LVR

- We are at / near the top of our interest rate cycle

- Resources + services rather than pure(ish) service economy

- Reliance on China for exports rather than imports

- No sudden business model changes by lenders (ie bulding societies becoming aggressive lenders)

- Lots of land

- Immigration more sticky - no 100,000 Poles deciding to head off home all of a sudden

- Too much GDP growth, "too much" employment

- No good HPI data

- Lots of macro (ie WA) and micro (ie SYD western bubs) markets

There's bound to be more.

God knows what it all means. Soft landing, hard landing, more rampant HPI (hmm).

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Similarities

- High PE

- Prices have grown rapidly in some areas

- Rise of the mortgage brokers

- Low doc loans became more popular

- Immigration given as reason for price inflation

- Inflation going up / gone up (not sure what it will be like once oil shock was worked its way through)

Differences

- No change in buyers' business model (no sudden appearance of BTL)

- Less reliance of lenders on securitisation model

- Insurance always required for LVR >90%

- I have never seen / heard of >100 LVR

- We are at / near the top of our interest rate cycle

- Resources + services rather than pure(ish) service economy

- Reliance on China for exports rather than imports

- No sudden business model changes by lenders (ie bulding societies becoming aggressive lenders)

- Lots of land

- Immigration more sticky - no 100,000 Poles deciding to head off home all of a sudden

- Too much GDP growth, "too much" employment

- No good HPI data

- Lots of macro (ie WA) and micro (ie SYD western bubs) markets

There's bound to be more.

God knows what it all means. Soft landing, hard landing, more rampant HPI (hmm).

Have a look at 'the other place' for related info.

I am not sufficiently qualified to give you any sort of useful response, just thought that I could at least be of company to you in your quest for enlightenment!

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Have a look at 'the other place' for related info.

I am not sufficiently qualified to give you any sort of useful response, just thought that I could at least be of company to you in your quest for enlightenment!

I gave up on "the other place" a couple of years ago: too much group think on the Aussie forum, too many rabid Powell-ites on the main board (like it was here for a white - seems to have calmed down and I've learned how to use the ignore option).

Edit - typo

Edited by aussieboy

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Bulls were using this tactic when they saw the US market crashing and saying " It wont happen in the UK, cos we dont have sub prime, our banks dont lend stupid, securitation? whats that?."

Twothings I do know.

You have Western Banks, you have very high house prices.

Now find the reason.

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Bulls were using this tactic when they saw the US market crashing and saying " It wont happen in the UK, cos we dont have sub prime, our banks dont lend stupid, securitation? whats that?."

Twothings I do know.

You have Western Banks, you have very high house prices.

Now find the reason.

I have first hand experience of non-traditional lending at the corporate level - no one has relied to the extend NR did on securitisation.

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Differences

- No change in buyers' business model (no sudden appearance of BTL)

Got any figures to support this?

On the street in Oz, the emergence and growth of the amateur ten-fold investment property owner feels just the same as it does in the UK.

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Got any figures to support this?

On the street in Oz, the emergence and growth of the amateur ten-fold investment property owner feels just the same as it does in the UK.

No - it's an opinion based on observations made whilst being on the street in Oz.

If you'd care to head off and find some figures to demonstrate that it's changed and it's different this time, please be my guest.

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Similarities

- High PE

- Prices have grown rapidly in some areas

- Rise of the mortgage brokers

- Low doc loans became more popular

- Immigration given as reason for price inflation

- Inflation going up / gone up (not sure what it will be like once oil shock was worked its way through)

Differences

- No change in buyers' business model (no sudden appearance of BTL)

- Less reliance of lenders on securitisation model

- Insurance always required for LVR >90%

- I have never seen / heard of >100 LVR

- We are at / near the top of our interest rate cycle

- Resources + services rather than pure(ish) service economy

- Reliance on China for exports rather than imports

- No sudden business model changes by lenders (ie bulding societies becoming aggressive lenders)

- Lots of land

- Immigration more sticky - no 100,000 Poles deciding to head off home all of a sudden

- Too much GDP growth, "too much" employment

- No good HPI data

- Lots of macro (ie WA) and micro (ie SYD western bubs) markets

There's bound to be more.

God knows what it all means. Soft landing, hard landing, more rampant HPI (hmm).

How about negative gearing tax breaks on investment homes, this one is massive is OZ.

I am all for a crash in OZ. Stupid house prices and average low wages are a killer, but while the government is subsiding high income earners to go and buy more rental property, I think the market will stay resilient. Australia is starting to see a large divide between the have's and the have nots, the renters and the home owners, a class system just like the mother land is forming as the rich reap the rewards through Government policy.

Aussies have debted themselves up to the hilt however, investing in property and especially the stock market. I beleive OZI's are the largest private investors in stocks and shares in the world. The ASX not doing to well lately though huh. That has gotta hurt. If housing does take a nose dive, expect the man on the street to suffer badly as every Aussie I met was an amateur property investor. Crazy.

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No - it's an opinion based on observations made whilst being on the street in Oz.

If you'd care to head off and find some figures to demonstrate that it's changed and it's different this time, please be my guest.

Read my previous post, almost EVERY aussie is a property investor due to negative gearing, don't have the facts but I know Australia very well. NG is causing a huge divide.

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I have first hand experience of non-traditional lending at the corporate level - no one has relied to the extend NR did on securitisation.

Why pick on NR?

All banks were at it in the west and ANZ- My BIL lives in NZ and his house has gone up tons in the past cuople of years, with mortgages being offered way way beyond normal lending rules, but today, (since january) he cant sell, not even a sniff of a buyer!

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One has decreed:-

If one wishes to remain in the Commonwealth, one will have to house Rosie Millard for the remainder of its unnatural life.

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No - it's an opinion based on observations made whilst being on the street in Oz.

If you'd care to head off and find some figures to demonstrate that it's changed and it's different this time, please be my guest.

To me the model has not changed amongst the cashed up city professionals. They have always been buying investment property.

It’s the proliferation of multi-IP ownership extending out to your average western suburbanite that disturbs me the most and reminds me of the UK.

Now I don’t know if the demographic breakdown has always been like this as I’m basing my opinion only on the last ten years. This is why I was asking if you had any data.

As another poster indicated, NG is the key.

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How about negative gearing tax breaks on investment homes, this one is massive is OZ.

...

Aussies have debted themselves up to the hilt however, investing in property and especially the stock market. I beleive OZI's are the largest private investors in stocks and shares in the world. The ASX not doing to well lately though huh. That has gotta hurt. If housing does take a nose dive, expect the man on the street to suffer badly as every Aussie I met was an amateur property investor. Crazy.

I agree - NG is a pernicious tax hits the non-owner with the double whammy of bid up house prices and to add insult to injury we effectively pay more tax to subsidise the tax-breaks of the landlords. I don't see a government here scrapping it - they have used the justification of keeping rentals affordable of course. Funny then that one of liberals last acts before being booted out was widening NG so that Aus residents can use it against foreign property (probably not a bad idea for a struggling BTL to head to Aus and keep the cashflow here underwater).

Geed you are on the money with the investing mentality here - we are at the end of 8 years of 20%+ yoy in the ASX the fear had gone - margin loans (again v. tax effective down here) are very common amongst even the mum and dads they are getting walloped. And even with NG on an investment place you are still losing money (+ve cashflow IP's are as rare as hen's teeth in Sydney) - not everone has deep enough pockets to keep funding these losses in the hope of capital gains - and in Syd there has not been appreciable CG since '03, which is a significant real loss.

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some more differenecs

the majority of people want to stay and live in Australia and othere want to come here to live as well

The overall median house price historically has not fluctuated like the UK cycle

investors get tax releif on lower yelding properties

"Buy an Hope" property investing is not a new phenomenem.

Not all investors are johnnie come latly and many have done very well over time and are not sailing close to the wind

Entry level first time buyers grants stamp duty exemptions.

Rental vacancy at record lows.

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some more differenecs

the majority of people want to stay and live in Australia and othere want to come here to live as well

The overall median house price historically has not fluctuated like the UK cycle

investors get tax releif on lower yelding properties

"Buy an Hope" property investing is not a new phenomenem.

Not all investors are johnnie come latly and many have done very well over time and are not sailing close to the wind

Entry level first time buyers grants stamp duty exemptions.

Rental vacancy at record lows.

I give up :rolleyes:

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the majority of people want to stay and live in Australia and othere want to come here to live as well

I think that will be the same for all countries with net immigration.

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I give up :rolleyes:

You are correct that it’s all “noise”.

The only thing the discussion on the differences offers to me is how less severe will the Oz crash be compared to the US.

All a bit boring, once the stable door is open.

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Read my previous post, almost EVERY aussie is a property investor due to negative gearing, don't have the facts but I know Australia very well. NG is causing a huge divide.

I did read your post - it's provides another opinion to add to the pile I suppose.

However, if almost every aussie has a mortgage, I will eat my akubra.

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Why pick on NR?

All banks were at it in the west and ANZ- My BIL lives in NZ and his house has gone up tons in the past cuople of years, with mortgages being offered way way beyond normal lending rules, but today, (since january) he cant sell, not even a sniff of a buyer!

Some interesting non sequitors , BL. All banks may have been at it, but it's a question of scale. Also, not all mortgage providers were at it. Wizard, for instance.

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To me the model has not changed amongst the cashed up city professionals. They have always been buying investment property.

It’s the proliferation of multi-IP ownership extending out to your average western suburbanite that disturbs me the most and reminds me of the UK.

Now I don’t know if the demographic breakdown has always been like this as I’m basing my opinion only on the last ten years. This is why I was asking if you had any data.

As another poster indicated, NG is the key.

Lots of data over in "the other place". Buggered if I'm going there to fish it out.

The NG is a key differentiator, should have thought of that one; have no opinion on whether it's fair or not. However, it has provided an odd incentives for years which explain why folk live in a crappy rental whilst renting out the fabulous house they own. Sounds like BTL to me and other than a few high profile Wilsoinesque paper millionaires in the press I'm not sure we have seen the explosion in BTL that the UL has seen from scratch.

Oh, and the property porn here is less hard core: it's more garden-based and involve Harry's Practice.

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You are correct that it’s all “noise”.

The only thing the discussion on the differences offers to me is how less severe will the Oz crash be compared to the US.

All a bit boring, once the stable door is open.

More group think.

I would have thought it is worthwhile to make an attempt to bring a bit of structure to the debate. There are differences between the US, UK and ANZ. If it's boring to discuss house prices, then perhaps a discussion forum on house prices isn't the place to hang out.

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More group think.

I would have thought it is worthwhile to make an attempt to bring a bit of structure to the debate. There are differences between the US, UK and ANZ. If it's boring to discuss house prices, then perhaps a discussion forum on house prices isn't the place to hang out.

Having owned investment property in all of the above countries there is definetly differences between them and also differences within the various national markets.

What you get a lot of round here is the wild speculation about whether its 20 or 30% drops for the frist time in recent history and any other analysis is seen as boring.

- not everone has deep enough pockets to keep funding these losses in the hope of capital gains - and in Syd there has not been appreciable CG since '03, which is a significant real loss.

No growth for 5 years hardly a bubble then ?

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No growth for 5 years hardly a bubble then ?

Sydney is not as crazy as the other capitals I grant you that - nor has it in any way benefitted from the commodities boom (who has, truly?) - NSW has teetered on the edge of recession for the past 5 years. It does of course get the downsides of tight employment inflationary pressures/interest rates. The multiples in Brissy for example are truly scary but I think there is plenty of room on the downside in Sydney also.

What I really don't get and would genuinely like enlightment on is exactly how this resource boom benefits the average Aussie. I'll give you a couple which is near full employment and benefits of owning resource shares which a lot of Aussie will own + good bit of coffer filling for the government. I have heard figures tho of 80%+ of the money going straight offshore, and the fact the the Aussie current a/c deficit is still widening at this time must be cause for concern - and the Australians are amongst the most indebted of any in the anglosphere. For me the similarities with the UK far outweigh the differences.

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Sydney is not as crazy as the other capitals I grant you that - nor has it in any way benefitted from the commodities boom (who has, truly?) - NSW has teetered on the edge of recession for the past 5 years. It does of course get the downsides of tight employment inflationary pressures/interest rates. The multiples in Brissy for example are truly scary but I think there is plenty of room on the downside in Sydney also.

What I really don't get and would genuinely like enlightment on is exactly how this resource boom benefits the average Aussie. I'll give you a couple which is near full employment and benefits of owning resource shares which a lot of Aussie will own + good bit of coffer filling for the government. I have heard figures tho of 80%+ of the money going straight offshore, and the fact the the Aussie current a/c deficit is still widening at this time must be cause for concern - and the Australians are amongst the most indebted of any in the anglosphere. For me the similarities with the UK far outweigh the differences.

Did you know that you can get an 8% yield in the Rocks ;)

Commodities boom provides employment to those working in it which takes pressure of demand for other jobs it also stimulates the economy through capex, infrastructure, skills development and transport. The terms of trade are improving this is not in doubt. Our defecit is structural we are to small a country to self produce lots of manufactured items that are imported.

Last time I checked a few months ago and from memory Ireland was the third most indebted nation per capita, UK was fourth, US was 27th and Oz was 31st.

Some other differences in oz:

  • The reserve bank has now said that its high rates policy is stifling demand the slow down has been manufactured unlike the UK.

  • The AUS $ is now at a record level against the US $ and doing real well against the British Peso.

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  • 401 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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