As I understand it, the US has mortgages backed by government agencies Freddie Mac and Fannie Mae, which essentially grarantees the loans. We don't have that, but have to pay LMI which insures the lender, and as I just found out, the insurer can still seek payment from the defaulted home owner. That sounds super unfair!
Isn't the faster transmission of interest rates in Australia a net good thing? Our inflation came down with lower interest rates as you mentioned. This also means that the interest rates to businesses remained lowered than it would have been otherwise. Due to government implicit and explicit subsidies to mortgages in Anglophone world, aren't you worried the real estate sector is crowding out investments in productive activities. We already have Dutch disease due our coal exports, we don't need another thing bringing down our economic complexity.
Also don't you it's better to keep the cost of capital lower for businesses in Australia since we are more of a export economy that America which is more a consumption driven economy.
The Lord gaveth during covid and he took it off the first home buyers when inflation popped up.
The lord gaveth to the rich and their banks with negative gearing, capital gains write offs and low interest rates to enable them to purchase and finance a multitude of houses prior to and during covid. The rich are now happily reaping 5% on term deposits.
The United States is still simulating its economy with Covid-era monetary policy because of its unique mortgage market with 30-year fixed interest rates.”
As I understand it, the US has mortgages backed by government agencies Freddie Mac and Fannie Mae, which essentially grarantees the loans. We don't have that, but have to pay LMI which insures the lender, and as I just found out, the insurer can still seek payment from the defaulted home owner. That sounds super unfair!
Should that not be “still STIMULATING”?
Isn't the faster transmission of interest rates in Australia a net good thing? Our inflation came down with lower interest rates as you mentioned. This also means that the interest rates to businesses remained lowered than it would have been otherwise. Due to government implicit and explicit subsidies to mortgages in Anglophone world, aren't you worried the real estate sector is crowding out investments in productive activities. We already have Dutch disease due our coal exports, we don't need another thing bringing down our economic complexity.
Also don't you it's better to keep the cost of capital lower for businesses in Australia since we are more of a export economy that America which is more a consumption driven economy.
The Lord gaveth during covid and he took it off the first home buyers when inflation popped up.
The lord gaveth to the rich and their banks with negative gearing, capital gains write offs and low interest rates to enable them to purchase and finance a multitude of houses prior to and during covid. The rich are now happily reaping 5% on term deposits.
Lift up your voices to praise the Lord.
At least one more occurrence:
“Here’s why.
The United States is still simulating its economy with Covid-era monetary policy because of its unique mortgage market with 30-year fixed interest rates.”