First home buyers are waking up. No longer are falling usury rates seen as a sign to “Buy Now!”
Quite the contrary.
They are a sign that says “DON’T BUY NOW!!”
From the Courier-Mail:
LENDERS have started dropping their home loan interest rates without waiting for the Reserve Bank of Australia to move.
Although the RBA last week decided to keep interest rates on hold, a couple of lenders have dropped their variable rates and many more cut their fixed rates.
According to financial comparison website RateCity, BMC Mortgage cut some of its variable home loans this week by up to 10 basis points.
Yesterday Holiday Coast Credit Union cut its variable rate by 20 basis points.
Since Monday, many lenders have cut their fixed rates, with ANZ and Commonwealth banks dropping by up to 30 basis points, Suncorp 20 basis points and RAMS by 40 basis points. St George cut its fixed home loan rates for one, three, four and five-year terms.
The number of home loans approved by banks and other lenders has fallen, according to Australian Bureau of Statistics figures.
Demand for loans from first-home buyers has slumped to its lowest level in more than eight years.
The number of home loans approved in December was down 1.5 per cent on the previous month. This is despite four interest rate cuts by the RBA last year.
…
According to betting on futures markets, there is an even-money chance the RBA will cut the official cash rate next month to a record low of 2.75 per cent.
Unsurprising. Long expected, and forewarned of right here, and elsewhere.
The financial system – bankstering – is a Ponzi scheme.
It requires ever-expanding growth in “credit” issuance to sustain itself, and to continue generating vast profits for banksters.
As we saw in The Easy Way To Know Where House Prices Will Go, the annual growth rate in credit debt for housing has been in overall decline since Feb-Mar 2004. Housing debt is still growing. But at an ever slower annual rate:
Feb 2004 – Peak in annual growth rate for Housing Credit
We also saw something more important.
That Australia’s world-leading house price bubble is NOT, as many vested usurers would have you believe, due to “demand” for housing driven by population growth. That is, by eager Owner-occupiers looking to “own their own home”.
In fact, RBA and ABS data clearly shows that for several decades, by far the greatest driver of Housing Credit growth in Australia – and thus, the greatest driver of house prices – has been so-called “Investors”. Known by the wise as “speculators” –
Click to enlarge
For a detailed, easy-to-understand explanation of the true drivers of Australia’s house price bubble, click here.
For those who can’t be bothered, simply take note of the obvious.
Everything in the economy starts with the banking system.
They are not just the pipes and taps for the flow of “money” throughout the economy.
Banks are the creators of “money”.
Don’t believe me? No less an authority than the biggest bankster of all, the Federal Reserve Bank, has said exactly that:
The actual process of money creation takes place primarily in banks. As noted earlier, checkable liabilities of banks are money. These liabilities are customers’ accounts. They increase when customers deposit currency and checks and when the proceeds of loans made by the banks are credited to borrowers’ accounts.
It is really quite simple.
Banksters grow richer by lending. At usury.
When you sign up for a loan, the bank creates new “money”. How? By typing a new, double-entry, digital book-keeping entry into their computer.
A new “deposit” for you. With which to buy “your” house.
A new “asset” for them. Your signature on a loan document, pledging to work as their debt-slave for the next 30 years to repay that loan … plus interest.
Your loan, is their asset. Your legally binding pledge to repay those electronic digits plus interest, is their asset.
Banksters are all about profit.
They will only cut interest rates on home loans – by far their #1 profit centre – out of sheer necessity.
To attract more willing debt slaves to sign up for a home loan.
To keep their Ponzi scheme going.
Now, it may take many months yet, or even years, for Australia’s house price bubble to burst.
Obviously, the banksters will do everything in their power to prevent it.
Their cutting home loan interest rates “out-of-cycle” is one clear sign of that.
Their inevitable calls for RBA and government “intervention” to support the housing market – that is, to help out with encouraging/bribing ever more folks into taking on ever more debt – is another.
But the writing is on the wall for the banksters. And our house price bubble.
And that writing on the wall is exactly in the shape of that Housing Credit annual growth chart you can see above.
To quote Prosper Australia’s David Collyer once again –
DON’T BUY NOW!!
Barnaby Is Right 
This is old news and has been doing the rounds for several years.
Banks cutting home loan interest rates out-of-cycle is “old news”?
Great to see you back BI. According to the reports today, the head of Treasury has no idea about the design of a tax that supposedly is supposed to raise billions of year. Depressing and simply scary
http://www.theaustralian.com.au/national-affairs/treasury/treasury-struggled-with-mining-tax-forecasts-says-martin-parkinson/story-fn59nsif-1226578150645
Sorry this was meant for the previous post.
Yep, saw that. No surprise, since Gillard and Swan didn’t let any Treasury officials in on the “negotiations”.
“Banks are the creators of “money”.”
Strictly speaking, banks monetise debt. So while they do create ‘money’, if the debt is of a quality that means the debt is amortised, there is no problem, the value of that debt is maintained over time, & in turn the ‘money’ – bank credit – does not depreciate.
The real issue is how is the quality of debt regulated? What ensures the quality of debt over time? Only redeemability in something whose quality is constant through time can suffice. There is only one thing on earth with the necessary quality & it ain’t government debt.
Government debt is junk, it will never be repaid, it is of a quality that might as well be shit. Yes, the monetary system is a Ponzi scheme, you are all being scammed, ripped off, rorted……