Banks get audited as well....unlike share margin loans that you get instant reconcilliation...property does not operate the same way... However in saying that how do you think we would be in australia if interest rates went to 10%??
That would add 50% or more to mortgage repayments....
Now if a home owner could rent a similar house for say $500 a week, but repayments are $1000 a week and you dont have the money what happens, they sell and rent...more that sell price goes down...now an investor who has to pay 10% interest has a lower borrowing capacity, therefore cannot pay the high prices asked...if no-one ca pay the high prices then the prices fall...It starts the downtrend...
I hope it never happens , but i am a realist and watching what is happenening around the world and how quickly things can and do change i at the moment dont want investments that i cant offload instantly...everyone to their own...but remember banks protect themselves and no-one else... homeowners are just numbers on there books...
