Home prices in Australia are crashing. Western Sydney is Ground Zero in the Interest-Only Mortgage Bust.
“Sydney residential property listings are now at the highest level recorded since February 2009, surpassing the peak in listings recorded during the 2010-12 housing downturn,” said Louis Christopher, Managing Director of SQM Research.
Whose Fault is This?
Whose fault is it that people ridiculously over-paid for houses with variable interest rates?
I suggest it's theirs. Yet, as one might expect from human nature and bubble investing, a Rate Rise Fury Swamps Australia with Many Homeowners Venting their Frustrations Online.
In the last week, many of Australia’s banks, including three of the Big Four, slid up their variable mortgage interest rates. Westpac by 0.14 percentage points, Commonwealth by 0.15 percentage points, and ANZ by 0.16 percentage points.
Australia is furious. Social media is overflowing with people calling banks things we simply cannot reprint in a family website.
It is not just Facebook and Twitter that are on fire. Swiss investment bank UBS has accused the Australian banking sector of being an uncompetitive feather bed where big banks can raise profits with a flick of the wrist.
“Today’s announcements demonstrate the oligopolistic nature of the Australian banks and their ability to pass on additional funding costs and more to their customers,” said UBS analyst Jonathan Mott and colleagues in a note to clients.
What a hoot.
Of course, the Reserve Bank of Australia kept interest rates too low, too long, creating a bubble. Yet, presumably Australians can read.
They totally ignored what happened in the US. Australia was supposedly different. It wasn't. Home prices are now crashing, finally, so it's time to place the blame. Elsewhere. People seldom self-assess.
Mike "Mish" Shedlock