Daily Price Movement / General Discussion, page-45876

https://www.macrobusiness.com.au/2022/03/new-zealand-house-prices-about-to-tank/?_gl=1*dj7esi*_ga*NTR1ZUhGeUFzWVVWU18weFc1YzBpYXFlNXlrM3o0T0Z4SlZhWWRJdENjM2pHOW0ySk13dm9jSkJwaGxsbFBiMw..

Remember when I said Zip would be $1 people laughed.

Remember when I said Square would fall from $290 to $110 people laughed.

Remember when I said inflation was not transitory and was shot down in flames.

Remember when I said Central Banks would have to raise interest rates quicker and more aggressively than they were publically acknowledging.

The current debt to income ratio of Australian housing in fact most of the western world is at an all time high as is the mortgage payments as a percentage of income.

With rising fuel and food costs there is no margin for error so say a typical 1 million dollar mortgage at 3 percent representing $30,000 per annum interest only, if that moves to 5 percent the impost on housed budget is an additional $20,000 per year so where is that additional $20.000 going to come from, and you end up with a legion of forced sellers that are not easily replaced as potential buyers don't have the additional income either to sustain the mortgage.

So sellers end up chasing the market down until it reaches a level where the mortgage is sustainable.

Typically many sellers refuse to accept reality and are eventually foreclosed on and we see increases of mortgagee in possession sales further depressing the market.

All of the manoeuvring by governments now is because they cannot afford to meet existing pension commitments and want to introduce Universal Basic Income removing a complete cohort from housing market.

BNPL is dead in the water