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22:53
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Originally posted by Barg
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Exactly, kingpin. Forrest Gump can see this future even if some can't. In the early 70s we were all use to the standard 13% home loans, but were not over-leveraged. Then we had the boom and we leveraged ourselves up to the neck with investment properties, me included. The good times would never end, we youngsters thought - Huh! Then by the late 70s interest had risen to circa 17% and the house of cards fell in a heap. The same dynamic repeated itself in the late 80s/early 90s. Todays dynamic is little different, but with one glaring change. Due to record lows in interest rates the leverage equation has been magnified by a factor of >X. Inflationary pressure will follow, and with it interest rates. The inevitable result will be a rise in interest rates of circa 2% at some stage down the track, which will increase mortgage repayments by circa 30%. Mortgage stress will morph into mortgage catastrophe. From a retired estate agent with 50 years experience I have no doubt that 'Ground Hog Day' cometh. The only question is when?
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People have been saying this and that for years even in gfc savings interest was 8 percent how good was that....which expert believe a few points will cause massive problems...now people paying rent will have to pay more as half of australia has chinese landlords...looking into past is great
