Welcome to my take on things financial. I'll try and make sense of whats happening in the world of finance and the free market generally.
Oil: will stay in the 125 to 150 band for the rest of '08, and may slip after the Olympics, but the mentality of the Oil market is a ratchet experience similar to being tied to a stretch torture machine and slowly inched until you can take no more pain,
I haven't seen any statistics but I'd love to know the average mortgage level in dollar value on home loans Australia wide, I heard a few years ago it was $400,000, if thats true theres a lot of ppl with more than a few things to worry about.
One being interest rates, the other being home values, with the price of everything going up, except real estate values, where does that put the value of these out standing mortgages.
If house prices have dropped from say 500,000 to say 450,000, And that is not being unreasonable, Most people would have been able to put a 100,000 deposit on that house, if they can only put in 50,000 they still would've got the loan.
So they borrowed 400k, the house is now worth 450k, they still have 50k equity, everything is fine you say, but they are locked into a lifestyle funded by home equity.
How long does it take to pay off a 400k home at 5% interest, excuse my mathematics, Earn 100k pa, pay 20 k per year off loan, thats 20 years plus interest, I'm gonna take a guess here and say add another 400k interest bill.
Interest rates will stay at 7 - 8%, which will be good, if the Reserve raises rates, there will be a riot. The bite will be the banks fees.
The problem with the real estate is that ppl buying their first house couldn't wait and upgraded straight away, same with cars, tvs etc.
Prediction on house values, stagnation, which in real terms and coupled with rising inflation means falling values, ie a house worth 400k today will be worth 400k in 3 years time.
Oil: will stay in the 125 to 150 band for the rest of '08, and may slip after the Olympics, but the mentality of the Oil market is a ratchet experience similar to being tied to a stretch torture machine and slowly inched until you can take no more pain,
I haven't seen any statistics but I'd love to know the average mortgage level in dollar value on home loans Australia wide, I heard a few years ago it was $400,000, if thats true theres a lot of ppl with more than a few things to worry about.
One being interest rates, the other being home values, with the price of everything going up, except real estate values, where does that put the value of these out standing mortgages.
If house prices have dropped from say 500,000 to say 450,000, And that is not being unreasonable, Most people would have been able to put a 100,000 deposit on that house, if they can only put in 50,000 they still would've got the loan.
So they borrowed 400k, the house is now worth 450k, they still have 50k equity, everything is fine you say, but they are locked into a lifestyle funded by home equity.
How long does it take to pay off a 400k home at 5% interest, excuse my mathematics, Earn 100k pa, pay 20 k per year off loan, thats 20 years plus interest, I'm gonna take a guess here and say add another 400k interest bill.
Interest rates will stay at 7 - 8%, which will be good, if the Reserve raises rates, there will be a riot. The bite will be the banks fees.
The problem with the real estate is that ppl buying their first house couldn't wait and upgraded straight away, same with cars, tvs etc.
Prediction on house values, stagnation, which in real terms and coupled with rising inflation means falling values, ie a house worth 400k today will be worth 400k in 3 years time.
