Quote:
THE nation's heavily geared homebuyers could be hit hard by any shock to the economy, Reserve Bank governor Ian Macfarlane has warned.
Mr Macfarlane said the big change in Australian household borrowing had been among the over-40s, who were going into debt again rather than paying off their home loans. "The biggest single contribution to the increase in debt is actually people in the 40-50 and 50-60 age
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yeah thats so true .. the tax haven that residential housing has become
is to big a carrot to ignore ..I think borrowers see the short term in that you buy an investment property and you can gain substantial tax releif in regard ..the downside for many imo.. is that in so doing many have effectively halfed any equity they had.. bump up interest rates .. and remove the tax consessions .. which is a possibility/reality and this guys words WERE a pretty fair observation of the way things are likely to pan out ..I'd agree have with his coments to on the banks being fairly secure with there bottom line ..any good look at a full cycle of lending would probably show they lose a bit ..make a lot .
Bit like owning a casino and being able to lock the doors
